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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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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