Research Note: Customer Intimacy and Cross-Selling Strategy

Abstract

B etter targeting opportunities and the increasing role of information-intensive environments have created new challenges for firms in obtaining customer information. Such information can help firms increase their profits through cross-selling opportunities. However, revealing personal preferences and contact information can raise the risks for customers when dealing with a firm. Consequently, some customers trade off the benefit and risks of revealing information. As the opportunity to obtain a higher level of information increases, customers incur a higher level of risk when dealing with a firm. This increases the firm's incentive to commit on a crossselling level. By such a commitment, a firm can obtain customer intimacy and benefit from detailed customer information. As a result, profits increase while prices decrease. Thus, legal regulations that explicitly require firms to spell out the extent of cross-selling may actually improve the profits of the firm.

Targeted Advertising and Advertising Avoidance

“…A number of recent papers look at targeted advertising more particularly, again in the context of how it influences strategic pricing behavior; see Akçura and Srinivasan (2005), Iyer, Soberman, and Villas-Boas (2005), Gal-Or, Gal-Or, May, and Spangler (2006), and Esteban and Hernandez (2007).…”

Competing with Privacy

“…See for instance`Everything we know about what data brokers know about you', ProPublica, March 7 2013. information provision on the quality of services rather than on prices. Our approach relates to that of Akçura and Srinivasan (2005), who rst examined the tradeo faced by the monopolist deriving both sales revenues and disclosure revenues. They analyze the case where the monopolist decides the supply of information required of consumers in order for them to participate in the service.…”

“…We next consider the problem of consumer i in the third stage when deciding to sign up for rm j's service or stay out of the market. The consumer evaluates the utility derived from the service given by u i,j in (1), anticipating optimal information provision given by (2), and signs up only if u i,j ≥ 0. We proceed by identifying the valuation of the indierent consumer v f who is strictly indierent between signing up or not.…”

“…Our monopoly analysis is closely related to that of Akçura and Srinivasan (2005), who rst analyzed the problem of the monopolist facing a tradeo between sales revenues and disclosure revenues. In both cases, higher levels of information disclosure in equilibrium command lower prices for consumers.…”

Customer Intimacy Adoption and its impact on Organisational Performance

“…Customer intimacy is one of the identified paradigms, which helps organisations to manage relationships with customers for mutual benefits (Treacy and Wiersema, 1993[77]; Hoffman, 2001 [37]; Ackura and Srinivasan, 2005) [4]. In marketing, the first commandment is to 'know thy customer'.…”