The impact of satisfaction and payment equity on cross-buying: A dynamic model for a multi-service provider

In the last decade, marketers have primarily focused on keeping customers. Only recently have they become aware that creating value by cross-selling additional services is also an important aspect of customer relationship management. In this article we investigate how satisfaction and payment equity, defined as the perceived fairness of the price, affect cross-buying at a multiservice provider. We also consider its competitors' performance on these factors. Our results show that the effect of satisfaction differs between customers with lengthy and short relationships. It also shows that payment equity negatively affects cross-buying for customers with long relationships, However, if the prices of the supplier are perceived as fairer than the prices of the competitor, the customers' probability of cross-buying increases. (C) 2001 by New York University. All rights reserved.