Cited by 786Privacy, Security, and Data ProtectionCustomer Service Quality and LoyaltyInformation and Cyber Security

Data Privacy: Effects on Customer and Firm Performance

Martin, Kelly D., Borah, Abhishek, Palmatier, Robert W.·2017·Journal of Marketing

Abstract

Although marketers increasingly rely on customer data, firms have little insight into the ramifications of such data use and do not know how to prevent negative effects. Data management efforts may heighten customers’ vulnerability worries or create real vulnerability. Using a conceptual framework grounded in gossip theory, the authors link customer vulnerability to negative performance effects. Three studies show that transparency and control in firms’ data management practices can suppress the negative effects of customer data vulnerability. Experimental manipulations reveal that mere access to personal data inflates feelings of violation and reduces trust. An event study of data security breaches affecting 414 public companies also confirms negative effects, as well as spillover vulnerabilities from rival firms’ breaches, on firm performance. Severity of the breach hurts the focal firm but helps the rival firm, which provides some insight into mixed findings in prior research. Finally, a field study with actual customers of 15 companies across three industries demonstrates consistent effects across four types of customer data vulnerability and confirms that violation and trust mediate the effects of data vulnerabilities on outcomes.

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Crossref · 10.1509/jm.15.0497

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Authors
Martin, K. D., Borah, A., & Palmatier, R. W.
Affiliations
  • Colorado State University (US)
  • University of Washington (US)
Venue
Journal of Marketing
Published
2017-01
Volume
81
Issue
1
Pages
36-58
ISSN
  • 0022-2429 (ISSN-L)
  • 1547-7185
OpenAlex
W2495772237
Cited by
786
References
0
Citations by year
2026: 123 · 2025: 132 · 2024: 92 · 2023: 99 · 2022: 97 · 2021: 67 · 2020: 82 · 2019: 54 · 2018: 26 · 2017: 13 · 2016: 1
FWCI
89.60
Type
journal article
Language
en
Open access
closed
Locations
  • Journal of Marketing (publishedVersion)
  • Griffith Research Online (submittedVersion)
Funders
  • Colorado State University
  • Marketing Science Institute
Topics
  • Social Sciences › Sociology and Political Science › Privacy, Security, and Data Protection
  • Social Sciences › Business, Management and Accounting › Organizational Behavior and Human Resource Management › Customer Service Quality and Loyalty
  • Physical Sciences › Computer Science › Information Systems › Information and Cyber Security
Keywords
data privacy, data management practices, consumer trust, data breaches, firm performance, customer performance, transparency, data control, spillover effects, rival firms

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