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

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Data Privacy: Effects on Customer and Firm Performance

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

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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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Ziller, C., & Helbling, M. (2020) · European Journal of Political Research · doi:10.2139/ssrn.3556953 · Cited by 26
“Previous data breaches and leaks have compromised the trustworthiness of companies and political authorities and stimulated public debates about citizens’ privacy rights (Martin et al. 2017).”
Background
Beyond concern: socio-demographic and attitudinal influences on privacy and disclosure choices
Pomfret, L., Previte, J., & Coote, L. V. (2020) · Journal of Marketing Management · doi:10.1080/0267257x.2020.1715465 · Cited by 33
“with respect to maintaining consumer trust (Martin, 2018; Martin et al., 2017).”
Background
Social media privacy concerns: trusting beliefs and risk beliefs
Koohang, A. A., Paliszkiewicz, J. O., & Gołuchowski, J. (2018) · Industrial Management & Data Systems · doi:10.1108/imds-12-2017-0558 · Cited by 33
Quantifying the effect of ESG-related news on Chinese stock movements.
Chen, Y., Zheng, Y., Lv, G., Gu, Y., & Zhang, W. (2024) · Journal of Environmental Management · doi:10.1016/j.jenvman.2024.120301 · Cited by 25
Thriving through turbulence
Hoekstra, J. C., & Leeflang, P. S. H. (2022) · European Management Journal · doi:10.1016/j.emj.2022.04.007 · Cited by 24
Will the Volume-Based Procurement Policy Promote Pharmaceutical Firms’ R&D Investment in China? An Event Study Approach
Hu, Y.-Y., Chen, S.-M., Qiu, F., Chen, P.-Y., & Chen, S.-X. (2021) · International Journal of Environmental Research and Public Health · doi:10.3390/ijerph182212037 · Cited by 25
The dark side of AI in professional services
Trincado-Munoz, F. J., Cordasco, C. L., & Vorley, T. (2024) · Service Industries Journal · doi:10.1080/02642069.2024.2336208 · Cited by 31
“Failing to protect customers’ personal information will, in fact, also affect a company’s financial performance and decrease its market value (Martin et al., 2017).”
Tracking technologies in eHealth: Revisiting the personalization-privacy paradox through the transparency-control framework
Cloarec, J., Cadieu, C., & Alrabie, N. (2023) · Technological Forecasting and Social Change · doi:10.1016/j.techfore.2023.123101 · Cited by 35
Field experiments in marketing research: a systematic methodological review
Malodia, S., Dhir, A., Hasni, M. J. S., & Srivastava, S. (2023) · European Journal of Marketing · doi:10.1108/ejm-03-2022-0240 · Cited by 38
How privacy practices affect customer commitment in the sharing economy: A study of Airbnb through an institutional perspective
Chen, S., Tamilmani, K., Tran, K. T., Waseem, D., & Weerakkody, V. (2022) · Industrial Marketing Management · doi:10.1016/j.indmarman.2022.08.020 · Cited by 28
Intransitivity of Consumer Preferences for Privacy
Tomaino, G., Wertenbroch, K., & Walters, D. J. (2022) · Journal of Marketing Research · doi:10.1177/00222437221122994 · Cited by 34
Customer participation in firm-initiated activities via social media: Understanding the role of experiential value
Quach, S., Shao, W., Ross, M., & Thaichon, P. (2020) · Australasian Marketing Journal (AMJ) · doi:10.1016/j.ausmj.2020.05.006 · Cited by 44
“These popular practices have been associated with negative consequences such as unauthorised access to information and privacy violation (Martin et al., 2017).”
BackgroundResultInfluential
Customer data security and theft: a Malaysian organization’s experience
Abidin, M. A. Z., Nawawi, A., & Salin, A. S. A. P. (2019) · Information and Computer Security · doi:10.1108/ics-04-2018-0043 · Cited by 32
Where is the Security Blanket? Developing Social Media Marketing Capability as a Shield from Perceived Cybersecurity Risk
Mathur, M. (2019) · Journal of Promotion Management · doi:10.1080/10496491.2018.1443310 · Cited by 24
“On the other hand, perceived cybersecurity risk undermines the ability of the ﬁ rm to deliver ﬁ rm value (Martin, Borah, & Palmatier, 2017).”
Background
Triggers and motivators of privacy protection behavior on Facebook
Alkire, L., Pohlmann, J., & Barnett, W. (2019) · Journal of Services Marketing · doi:10.1108/jsm-10-2018-0287 · Cited by 31
Wibson: A Case Study of a Decentralized, Privacy-Preserving Data Marketplace
Travizano, M., Sarraute, C., Dolata, M., French, A. M., & Treiblmaier, H. (2020) · Progress in IS · doi:10.1007/978-3-030-44337-5_8 · Cited by 23
A decade of cybersecurity research in business, management, and accounting: bibliometric analyses and future research directions
Al-Shattarat, W., Benameur, K. B., Mostafa, M. M., Hassanein, A., & Hamed, R. (2025) · Cogent Business & Management · doi:10.1080/23311975.2025.2544230 · Cited by 25
“…systems, design and innovation, data science, cybersecurity, organizational studies, and economics. another highly influential article, authored by Martin et al. (2017) and published in the Journal of Marketing, has been cited 258 times between 2017 and 2022. this study analyzed data breaches…”
Public enemies? The differential effects of reputation and celebrity on corporate misconduct scandalization
Han, J., Pollock, T. G., & Paruchuri, S. (2024) · Strategic Management Journal · doi:10.1002/smj.3638 · Cited by 29
Does privacy breach affect firm performance? An analysis incorporating event-induced changes and event clustering
Tripathi, M., & Mukhopadhyay, A. (2022) · Information Manager (The) · doi:10.1016/j.im.2022.103707 · Cited by 23
Feeling Lucky: How Framing the Target Product as a Free Gift Enhances Purchase Intention
Liu, M. W., Chuang, W., Lu, Y., & Keh, H. T. (2021) · International Journal of Research in Marketing · doi:10.1016/j.ijresmar.2021.07.001 · Cited by 23
The Impact of the General Data Protection Regulation (GDPR) on Online Usage BehaviorPreprint
Schmitt, J., Miller, K. M., & Skiera, B. (2021) · SSRN Electronic Journal · doi:10.2139/ssrn.3774110 · Cited by 29
Employee encouragement of self-disclosure in the service encounter and its impact on customer satisfaction
Söderlund, M. (2019) · Journal of Retailing and Consumer Services · doi:10.1016/j.jretconser.2019.102001 · Cited by 25
Privacy concerns and justice perceptions with the disclosure of biometric versus behavioral data for personalized pricing tell me who you are, I’ll tell you how much you pay. Consumers’ fairness and privacy perceptions with personalized pricing
Pizzi, G., Vannucci, V., Shukla, Y. S., & Aiello, G. (2022) · Journal of Business Research · doi:10.1016/j.jbusres.2022.04.072 · Cited by 30
Strategic alliances, exploration and exploitation and their impact on innovation and new product development: the effect of knowledge sharing
Ferreira, J., Coelho, A., & Moutinho, L. (2020) · Management Decision · doi:10.1108/md-09-2019-1239 · Cited by 120
Investigating place solidarity and consumer boycotting in threatening times: A study on the Ukraine-Russia conflict
Josiassen, A., Lang, E., Nørfelt, A., Köck, F., & Assaf, A. G. (2024) · Journal of Business Research · doi:10.1016/j.jbusres.2024.114796 · Cited by 31
The double-edged effects of data privacy practices on customer responses
Chen, S., Tran, K. T., Xia, Z., Waseem, D., Zhang, J. A., & Potdar, B. (2023) · International Journal of Information Management · doi:10.1016/j.ijinfomgt.2022.102600 · Cited by 22
Dealing with privacy concerns in product-service system selling: Value-based selling as fair treatment practice
Nijssen, E. J., van der Borgh, M., & Totzek, D. (2022) · Industrial Marketing Management · doi:10.1016/j.indmarman.2022.05.017 · Cited by 26
Electronic Loyalty In Social Commerce: Scale Development and Validation
Khoa, B. T., & Hà, N. M. (2020) · Gadjah Mada International Journal of Business · doi:10.22146/gamaijb.50683 · Cited by 26
Drivers and barriers of permission-based marketing
Bhatia, V. (2020) · Journal of Research in Interactive Marketing · doi:10.1108/jrim-07-2018-0088 · Cited by 33
Cybersecurity Breaches and the Role of Information Technology Governance in Audit Committee Charters
Lankton, N. K., Price, J., & Karim, M. (2020) · The Journal of Information Systems · doi:10.2308/isys-18-071 · Cited by 22
Identifying the Effect of Data Breach Publicity on Information Security Awareness Using Hierarchical Regression
Chua, H. N., Teh, J. S., & Herbland, A. (2021) · IEEE Access · doi:10.1109/access.2021.3107426 · Cited by 29
“[18] argued that a security breach is capable of immediately developing an individual’s perception of vulnerability and susceptibility to risks and harms.”
BackgroundInfluential
Privacy Considerations for Online Advertising: A Stakeholder’s Perspective to Programmatic Advertising
Cooper, D., Yalcin, T., Nistor, C., Macrini, M., & Pehlivan, E. (2021) · Social Science Research Network · doi:10.2139/ssrn.4012936 · Cited by 22
“Thus, privacy considerations are an important topic for marketers and academic researchers, who focus on online information privacy (Acquisti et al. , 2012; Akhter, 2014; Fehrenbach and Herrando, 2021; Martin et al. , 2017).”
Background
The Inverted U-Shaped Effect of Personalization on Consumer Attitudes in AI-Generated Ads: Striking the Right Balance Between Utility and Threat
Sun, H., Xie, P., & Sun, Y. (2025) · Journal of Advertising Research · doi:10.1080/00218499.2025.2462405 · Cited by 34
Institutional trustworthiness on public attitudes toward facial recognition technology: Evidence from U.S. policing
Li, R. G. (2024) · Government Information Quarterly · doi:10.1016/j.giq.2024.101941 · Cited by 25
RETRACTED ARTICLE: Unlocking the Impact of User Experience on AI-Powered Mobile Advertising Engagement
Xia, Y., Liu, Z., Wang, S., Huang, C., & Zhao, W. (2024) · Journal of the Knowledge Economy · doi:10.1007/s13132-024-02153-y · Cited by 21
“Building upon the interpersonal rumor theory, Martin and colleagues have elucidated that the psychological state of users regarding “privacy issues” essentially constitutes a form of anticipated perception and is considered a cumulative and continuous process of perceived harm (Martin et al., 2017).”
Retracted
A Preemptive and Curative Solution to Mitigate Data Breaches: Corporate Social Responsibility as a Double Layer of Protection
Zhu, J. J., Tuo, L., You, Y., Fei, Q., & Thomson, M. (2023) · Journal of Marketing Research · doi:10.1177/00222437231218969 · Cited by 21
“Such a view seems supported by Martin, Borah, and Palmatier (2017), wherein the authors (Study 3) measure changes in consumer perceptions of data vulnerability as a function of trans-parency and control, with the results showing that higher levels of both factors cause consumers to feel more secure…”
Influential

Authors: Martin, K. D., Borah, A., & Palmatier, R. W.
Affiliations: Colorado State University (US)
University of Washington (US)
ORCID: Martin, Kelly D.
Borah, Abhishek
Palmatier, Robert W.
Venue: Journal of Marketing
Publisher: SAGE Publications
Published: 2017-01
Volume: 81
Issue: 1
Pages: 36-58
ISSN: 0022-2429 (ISSN-L)
1547-7185
DOI: 10.1509/jm.15.0497
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
FWCI: 89.60
Type: journal article
Language: en
Open access: closed
Licence: journals.sagepub.com/page/policies/text-and-data-mining-license (tdm)
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 › Marketing › 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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Data Privacy: Effects on Customer and Firm Performance

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