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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Background
Classification of Personal Data Used by Personalised Robot Companions Based on Concern of Exposure
Riches, L., Koay, K., & Holthaus, P. (2022) · International Conference on Software Reuse · doi:10.1007/978-3-031-24667-8_21 · Cited by 2
“Martin et al. [13] found a relationship between trust and data privacy, identifying that even a small data breach has negative effects on trust.”
Brand Capital upon CyberattackPreprint
Hsu, P., Kao, W.-C., & Wang, Y. (2021) · SSRN Electronic Journal · doi:10.2139/ssrn.3907923 · Cited by 2
“Therefore, the weakened firm performance confirms the real effect of cybersecurity breaches (Martin, Borah, and Palmatier, 2017; Berkman, Jona, Lee, and Soderstrom, 2018) and justifies the extent to which reduced brand value may hurt firms’ performance.”
Background
STRATEGIC MARKETING AND CYBERSECURITY: THE CASE OF DATA BREACHES
Kirk, G. (2019) · Issues in Information Systems · doi:10.48009/3_iis_2019_165-174 · Cited by 2
“Martin, Borah, and Palmatier (2017) also found evidence of what they called a spillover effect in which a data breach on one firm negatively impacted other firms.”
Background
Feeling Watched: A Phenomenological Exploration of Consumer Discomfort and Data Privacy Concerns in E-Commerce Personalized Email Marketing
Rahayu, T. A., Purnamasari, V. F. W., Rizky, M. A., Rahyadi, I., & Mani, L. (2025) · PaperASIA · doi:10.59953/paperasia.v41i1b.313 · Cited by 1
“Privacy concerns also play significant role; if emails feel invasive, customer trust can drop and poor data practices can harm brand’s reputation, making transparency in data usage essential for long-term success (Acquisti & Gross, 2006; Martin et al., 2017).”
Do life events always lead to change in purchase? The mediating role of change in consumer innovativeness, the variety seeking tendency, and price consciousness
Koschate‐Fischer, N., Hoyer, W. D., Stokburger-Sauer, N. E., & Engling, J. (2017) · Journal of the Academy of Marketing Science · doi:10.1007/s11747-017-0548-3 · Cited by 113
Talking the Walk: ESG Discourse as Strategic Dynamic Capability
Luisi, F., & Cucaro, O. M. S. (2026) · Business Strategy and the Environment · doi:10.1002/bse.71266 · Cited by 1
Digital technology risk disclosures and corporate bond risk premium
Wang, C., Zhang, X., Qian, L., & Xie, T. (2026) · Research in International Business and Finance · doi:10.1016/j.ribaf.2026.103419 · Cited by 1
Generative Artificial Intelligence in Marketing Communication: A Stakeholder Effects Model
Eisend, M., & Hermann, E. (2026) · Journal of Advertising · doi:10.1080/00913367.2026.2686658 · Cited by 1
Where to now with privacy? a systematic literature review with human–artificial intelligence synthesis (SLR-HAIS)
Zaveri, M. M., Pandit, A., Wilk, V., & D'Alessandro, S. P. (2026) · Journal of Consumer Marketing · doi:10.1108/jcm-01-2025-7545 · Cited by 1
MWIN (Measure What Is Needed): a strategic framework for privacy-first, AI-ready, and data-driven marketing analytics
Esquerdeiro, I. G., Buján-Carballal, D., & Oyarbide-Zubillaga, A. (2026) · Journal of Marketing Analytics · doi:10.1057/s41270-026-00471-5 · Cited by 1
Impact d’un label de confidentialité sur la vulnérabilité perçue des consommateurs et leur intention d’achat vis-à-vis des objets connectés
Vidal, D., Portes, A., Masson, J., & Cases, A. (2026) · Recherche et Applications en Marketing (French Edition) · doi:10.1177/07673701261444519 · Cited by 1
“Nous avons ensuite mesuré la vulnérabilité perçue (Martin et al., 2017) et l’intention d’achat (Malhotra et al., 2004) et terminé en collectant les caractéristiques démographiques.”
Influential
Customer–Robot Interaction Beyond the First Encounter: A Reciprocal Framework and Quadrant Model for Value Co‐Creation
Pham, L., Raza‐Ullah, T., & Shaker, H. (2026) · International Journal of Consumer Studies · doi:10.1111/ijcs.70208 · Cited by 1
Information Support for Socio-Economic Policy in Ukraine: From Fragmented Data to Evidence-Based Decisions in the Context of European Approaches
Sarioglo, V., & Korzhunova, N. (2026) · Demography and social economy · doi:10.15407/dse2026.01.061 · Cited by 1
Ethical and legal aspects of digital marketing, information technology, and their influence on corporate governance and sustainable development
Al-Ababneh, H. A., Alyami, N. M., Badawood, S., Alomari, K. M., Adwan, M. N. A., Khader, J. A., & Zawaideh, F. H. (2026) · Corporate Law & Governance Review · doi:10.22495/clgrv8i2p6 · Cited by 2
“Corporate governance, in turn, should ensure robust security technologies, employee training, and consumer awareness mechanisms (Martin et al., 2017).”
Messaging brand experience: Brand ethicality, brand trust, brand attitudes
Ozsacmaci, B., Dursun, T., Celik, S., & Kiliç, T. (2026) · Journal of Marketing Communications · doi:10.1080/13527266.2026.2638785 · Cited by 1
Impact Evaluation of the Transparency on the Perceived Trust: The Case of Moroccan Commercial Banks
DIKAOUI, O. (2026) · Management Science Advances. · doi:10.31181/msa31202632 · Cited by 1
The impact of privacy data utilization and protection on user continuance intention: a structural equation modeling approach
Chen, M., Agarwal, A., & Park, K. (2026) · Asia Pacific Journal of Marketing and Logistics · doi:10.1108/apjml-02-2025-0264 · Cited by 1
Drivers of cybersecurity adoption in developing countries: a data-driven approach
López, F. A., Alvarado, M. Y., Araya, S., & Gatica, G. (2026) · Academia Revista Latinoamericana de Administración · doi:10.1108/arla-12-2024-0358 · Cited by 1
Cyberattacks and business performance: Sectoral evidence from stock market reactions
Tiutiunyk, I., Pozovna, I., & Semenog, A. (2026) · Business Performance Review · doi:10.22495/bprv4i1p6 · Cited by 1
“This effect extends beyond equity markets: successive incidents erode trust not only among investors but also across broader stakeholder networks, including clients, suppliers, and business partners (Hovav & Gray, 2014; Martin et al., 2017).”
Reactions by Actual Data Breach Victims over Time: Evidence from Facebook’s Cambridge Analytica Breach
Schlackl, F., Pethig, F., Hoehle, H., & Sabherwal, R. (2026) · Information systems research · doi:10.1287/isre.2023.0391 · Cited by 1
Quantitative Assessment on the Misuse Risk of Intelligent Connected Vehicle Data
Lu, Y., Li, H., Tu, H., Liu, J., Yuan, Y., & van Lint, H. (2026) · Journal of Transportation Engineering Part A Systems · doi:10.1061/jtepbs.teeng-9361 · Cited by 1
Coping strategies and corrective actions to address digital consumer vulnerability: a multistakeholder perspective
Capone, V., Maggiore, G., & Presti, L. L. (2026) · Journal of Strategic Marketing · doi:10.1080/0965254x.2026.2618066 · Cited by 1
A holistic performance evaluation framework of enterprise product service innovation based on intelligent collaborative
Peng, D.-H., & Zhang, K.-Y. (2026) · Advanced Engineering Informatics · doi:10.1016/j.aei.2025.103944 · Cited by 1
The role of AI-powered chatbots in enhancing customer experience: systematic literature review
Muhammad, T., & Stukalina, Y. (2025) · Business and management · doi:10.3846/bm.2025.1482 · Cited by 3
“Additionally, AI bias and ethical concerns regarding data privacy remain major challenges in chatbot deployment (Martin et al., 2016).”
The Impact of IT Penetration on Employee Stability: Evidence from China
Ji, P., Li, Y., & Yu, L. (2025) · SAGE Open · doi:10.1177/21582440251377309 · Cited by 1
“(Gwebu et al., 2018; Hui et al., 2019; Liu et al., 2020; Martin et al., 2017; Paramita & Winata, 2023; Zhang et al., 2022).”
Neuroethics and neurorights applied in neural manipulation in tourism and hospitality: towards an ethical framework
McCartney, G., & Chark, R. (2025) · Current Issues in Tourism · doi:10.1080/13683500.2025.2556986 · Cited by 1
Activating consumer privacy concerns: the role of benign data threats and regulatory environments in shaping privacy protection responses
Taylor, J. A., Roberto, K. J., & Johnson, A. (2025) · European Journal of Marketing · doi:10.1108/ejm-12-2023-0888 · Cited by 2
The Impact of Regulatory Mechanisms in the Sharing Economy on Perceived Privacy Risk, Consumer Trust, and Continued Sharing Intention
Wen, H.-Q. (2025) · Journal of Modern Social Sciences · doi:10.71113/jmss.v2i4.368 · Cited by 1
Balancing Ethics and Earnings: Corporate Digital Responsibility and Jordanian Banks’ Performance Mediating for Bank Size
Khalaf, B. A., Alqahtani, M., Al-Naimi, M., & Ktit, M. (2025) · FinTech · doi:10.3390/fintech4030029 · Cited by 1
From Standardization to Personalization: Rethinking International Branding and Pricing Strategies
Mammassis, C. (2025) · British journal of marketing studies · doi:10.37745/bjms.2013/vol13n66271 · Cited by 1
The phantom push: a reevaluation of necessity entrepreneurship
Solomon, S. J., Slepchuk, A. N., Davis, J., & Bendickson, J. S. (2025) · Journal of Small Business Management · doi:10.1080/00472778.2025.2480847 · Cited by 1
“Vulnerability is an increasingly important construct in consumer (Hill & Sharma, 2020; Martin et al., 2017) and public policy (Bublitz et al., 2019; Lacko & Pappalardo, 2010) contexts, yet the entrepreneurship literature has largely limited discussion of vulnerability to NEs who are motivated by…”
Examining the Marketing Practices of Street Food Vendors; A Case Study of Rotunda Vendors
Dano, C., Bernante, F. B. P., Mayola, F. R. J., & Batingal, A. V. (2025) · International Journal of Innovative Science and Research Technology · doi:10.38124/ijisrt/25mar1957 · Cited by 1
The Impact of Perceived Personalization of AI Chatbot on Customer Citizenship Behavior: The Moderated-Mediation Effect of Perceived Empathy and Privacy Concern*
Won, J. Y., & Kim, Y. C. (2025) · Journal of Channel and Retailing · doi:10.17657/jcr.2025.4.30.3 · Cited by 2
Key Drivers of Privacy Protection Behavior in Social Networking Sites: A Motivational Perspective
Sedek, M., Raus, T. Z. M., & Othman, N. F. (2025) · International Journal of Academic Research in Business and Social Sciences · doi:10.6007/ijarbss/v15-i3/25164 · Cited by 1
“At the heart of privacy protection is information privacy concern, which reflects how much individuals worry about how organizations collect and use their personal data (Martin, Borah & Palmatier, 2017).”
LEGAL IMPLICATIONS OF DATA BREACH CASES IN INDONESIA: CHALLENGES AND SOLUTIONS IN THE ERA OF PERSONAL DATA PROTECTION
Khudori, A., & Lala, A. (2024) · Indonesian Cyber Law Review · doi:10.59261/iclr.v1i1.1 · Cited by 1
Impact of Branding on Consumer Behaviour at Himalayan Java Coffee Shops in Kathmandu Valley
Karanjit, S., Agrawal, P., & Tamang, S. (2024) · Journal of Business and Social Sciences Research · doi:10.3126/jbssr.v9i1.67995 · Cited by 1
“Brand trust influences buyers buy conduct when occasions are unchangeable as far as they might be concerned, causing them to feel powerless (Martin et al., 2017).”
Background
The Moderation Effect of Information Security Orientation on the Relationship Between Information Technology Enablement and Supply Chains Agility Performance
Elsaleiby, A. (2024) · IEEE Engineering Management Review · doi:10.1109/emr.2024.3389557 · Cited by 1
Information Collection and Personalized Service Strategy of Monopoly under Consumer Misrepresentation
Zhong, M.-Y., Cheng, Y., Mei, S., & Zhong, W.-J. (2024) · Journal of Theoretical and Applied Electronic Commerce Research · doi:10.3390/jtaer19020067 · Cited by 1
“Martin et al. [39] found that the transparency and control of a firm’s data management practices can mitigate consumer privacy concerns.”
Background
СУЧАСНІ ТЕНДЕНЦІЇ РОЗВИТКУ ЦИФРОВОГО МАРКЕТИНГУ
Нейман, Є., Dubovenko, M., & Кайлюк, О. Г. (2024) · Економіка та суспільство · doi:10.32782/2524-0072/2024-63-86 · Cited by 7

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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