Understanding how banking channels grow and share customers

Purpose Banks provide multiple channels for customers to use, but little is known about how these channels grow or share customers. This study investigates this by testing patterns known to empirically describe brand competition—Double Jeopardy (DJ), duplication of usage (DoU) and user profile homogeneity (UPH)—across banking channel contexts. Design/methodology/approach 427 Australian customers self-reported their banking channel usage at each purchase process stage (i.e. information, acquisition and usage). DJ analysis examined the relationship between channel penetration and average usage frequency. DoU analysis examined the relationship between channel penetration and customer multichannel usage. Mean Absolute Deviation analysis measured UPH across channels. Findings DJ is observed at the usage stage and aggregate level: larger channels have more customers, and those customers use the larger channels more frequently. DJ is not seen at the information or acquisition stages. DoU is observed across stages: channels share more customers with larger channels and fewer customers with smaller channels. UPH across channels was observed at the aggregate level: profiles of customers who use different channels are similar. There was lower homogeneity at the individual stages. Practical implications DJ patterns imply that channel growth results from customer acquisition, rather than increasing usage frequency. DoU results imply that customer co-usage across channels is in line with channel size and any deviations should be investigated further to better understand and service customers. UPH suggests that category reach is a better-suited strategy over segmentation for channel growth. Originality/value DJ, DoU and UPH patterns provide novel insights of banking channel growth and customer sharing. This informs more effective channel management strategies.