Impact of Proactive Postsales Service and Cross-Selling Activities on Customer Churn and Service Calls

Abstract

In recent years, service providers have identified the proactive postsales service (PPS) as a viable measure for preempting service failures and their negative consequences. Due to the high costs associated with PPSs, companies are looking for ways to increase their efficiency. To understand how companies can increase their revenues and lower their costs, this study investigates how cross-selling activities and different media types affect the impact of a PPS on inbound service calls and customer churn. Based on a large-scale field experiment in the telecommunications industry, as well as a controlled lab experiment, the results demonstrate the overall effectiveness of the PPS and indicate two mediating effects. While the effect of cross-selling on customer churn and service calls is mediated by the customers’ uncertainty regarding the company’s motives, it is the customers’ perception of privacy invasion that mediates the influence of the contact medium on the effectiveness of the PPS. Our finding that PPS contacts have to be clear in their message and should not be perceived as invasive is an indication of the importance of service-(post)sales ambidexterity.