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 a dditional services is also an important aspect of customer relationship man agement. 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 the se factors. Our results show that the effect of satisfaction differs betwee n customers with lengthy and short relationships. It also shows that paymen t equity negatively affects cross-buying for customers with long relationsh ips, However, if the prices of the supplier are perceived as fairer than th e prices of the competitor, the customers' probability of cross-buying incr eases. (C) 2001 by New York University. All rights reserved.