The effect of acquisition channels on customer loyalty and cross-buying

Acquisition channels are important predictors of customer loyalty in the first stages of a business-consumer relationship. Although some researchers have provided examples of the differences in the value of the customers businesses acquire via different channels, they have not considered the impact of acquisition channels on loyalty and cross-buying. Using probitmodels we explored how retention rates and cross-selling opportunities differ among the various acquisition channels a financial-services provider uses. Our results indicate that the direct-mail acquisition channel performs poorly on retention and cross-selling, while radio and TV perform poorly for retention only. The firm's Web site seems to perform well for retention. The theoretical and practical implications of our results are discussed.

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