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Satisfaction Spillovers Across Categories

Author

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  • Xiaojing Dong

    (Leavey School of Business, Santa Clara University, Santa Clara, California 95053)

  • Pradeep K. Chintagunta

    (Booth School of Business, University of Chicago, Chicago, Illinois 60637)

Abstract

We provide a descriptive study of the cross-category effects of satisfaction with financial services on retention behavior. Behavioral contrast and learning theories provide the bases for our understanding of these effects. Our empirical results reveal the following: (i) Across banking and investment categories, when customers have different providers, satisfaction with one lowers the retention probability in the other service. (ii) A customer who is dissatisfied with the investment service is more likely to stay with the current banking service. (iii) Significantly, we find that when the same firm is involved in both categories, dissatisfaction with the firm in the investment category spills over into the banking category thereby lowering its retention probability. We also find that: (a) among customers who are satisfied with banking (investment), more exposure to media increases retention probability; (b) although switching costs and order of acquisition affect retention, they do not show cross-category interactions with satisfaction. We then obtain implications for customer lifetime value (CLV) and show that it can increase satisfaction by leveraging both the within and across category effects. Bottom line: It is important for a company providing multiple services to measure satisfaction at the category level but to manage customers across categories.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0941 .

Suggested Citation

  • Xiaojing Dong & Pradeep K. Chintagunta, 2016. "Satisfaction Spillovers Across Categories," Marketing Science, INFORMS, vol. 35(2), pages 275-283, March.
    • Handle: RePEc:inm:ormksc:v:35:y:2016:i:2:p:275-283
    DOI: 10.1287/mksc.2015.0941
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    References listed on IDEAS

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