A single channel used to be all that companies needed to deliver products or services to their customers. But now companies, responding to customer demand for ever more channel choice, reach out through many routes. Multichannel customers spend 20 to 30 percent more money, on average, than single-channel ones do, and channels such as the Internet and overseas call centers promise big cost savings.

Yet multichannel marketing is harder than it might appear. Too often, companies multiply their channels only to face a host of unintended consequences that actually raise costs or cut revenues. In retail banking, for example, less expensive channels such as ATMs and the Internet have helped reduce average transaction costs over the past 15 years by nearly 15 percent. During the same period, however, transaction volumes more than doubled, since customers check their balances and make withdrawals more often than they did in the days when they had to wait in line at a branch. The result has been an increase in the overall cost of serving each customer. Similarly, serving customers over the Internet has saved airlines roughly $10 to $15 per booking. Nonetheless, Web-based channels facilitate the price transparency that, at some airlines, makes...