Multichannel Strategies for Managing the Profitability of Business-to-Business Customers

Abstract

As business-to-business customers increasingly use online channels, sellers must reconsider strategic investments in at least two areas: the salesperson channel, which faces the threat of substitution, and customer-specific discounts, which may be more precisely targeted. The authors draw on communication theory to posit that a customer’s search and purchasing in the seller’s online channels interact positively with both salesperson contact and customer-specific discounts to drive the seller’s customer-level sales and profit return on these investments. A multimethod approach using a complex data set from a large industrial seller provides broad support for hypothesized effects. Two post hoc experiments reveal how online and salesperson channels are complementary, together improving customer–seller communication such that the seller is better able to fulfill customer needs and reduce customer perceived risk. This research advances the multichannel and pricing literatures and offers actionable insights for business-to-business marketers, revealing how online channels can complement traditional seller investments in salespeople and customer-specific discounts.

Design and Governance of Multichannel Sales Systems: Financial Performance Consequences in Business-to-Business Markets

“…Significant Sanderson-Windmeijer multivariate F-tests empirically confirm the strength of our instrumental variables ( p < .01). In line with common practice (e.g., Lawrence et al 2019), small and nonsignificant correlations (r < .10) between our instrumental variables with firm performance deliver support for the exclusion criterion.…”

“…Future research could further explore intradesign differences from an internal perspective. We focused on agency conflicts with external sales partners; however, agency conflicts might also arise within direct channels: the direct sales force may perceive substitution threats from direct online channels (Lawrence et al 2019), or employees may question management's ability to cater to the specific interests of their own sales channels while supporting indirect sales channels (Sa Vinhas and Anderson 2005), provoking agency conflicts. Second, our results emphasize the importance of aligning governance mechanisms with multichannel design, an issue that has received limited attention (cf.…”

“…Multichannel sales systems have become the norm in business-to-business (B2B) markets (Lawrence et al 2019; Sa Vinhas and Heide 2015). Of the different sales channels that B2B companies (principal) employ, at least one is an indirect channel (agent) (e.g., dealers, external online shops).…”

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How Business Strategies Enlivens Innovation of Selected Flour Milling Companies in Nigeria

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