Unprofitable Cross-Buying by Customers: The Impact of Cross-Buying on Firm's Sales

摘要

Cross-buying is defined as the customer's purchase of additional products or services from the same provider. To date, numerous studies show that cross-buying behavior of customers has a positive effect on firm's financial outcomes. However, it is conceivable that cross-buying may not always be linked to firm profitability. It is implied that cross-buying will exert a negative impact on profitability, thereby calling for further examination of cross-buying behavior. Therefore, our primary objective of this paper is to identify whether high level of cross-buying at period t has a positive impact on increasing firm's sales in the subsequent (t + 1) period. In addition, the second goal of this research is to investigate the cases where cross-buying will not lead to an increase in sales.