What factors influence customers' disclosure of private data?

Details

Supervisors

Simon Hazée

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion, à finalité spécialisée

Abstract

Recent years have witnessed the rise of digital technologies that enabled a shift in consumer power from the companies to consumers, who have taken a more active role in value exchanges, as well as changed customers’ expectations and behaviors. Nowadays, consumers expect organizations to anticipate their needs and provide consistent, good quality, and personalized services. In this context, companies increasingly collect and use consumers’ individual data to get to know their customers, develop personalized offerings, and improve customer experience. Consumers, however, may experience discomfort when asked to share their personal data. Although the use of data for personalization offers several potential advantages for both customers and companies, convincing customers to disclose their personal data remains challenging. Therefore, this thesis aims to answer the following research question: “What factors influence customers’ disclosure of private data?” In order to answer this question, we first set the conceptual background of the thesis by reviewing relevant academic literature. We reviewed the evolution of digital marketing, big data and consumer behavior, before discussing common data collection practices and challenges as well as key concepts including self-disclosure and the “privacy paradox”. We then reviewed the literature on the factors that could influence the degree of disclosure of consumers. Combining this literature review with ten in depth interviews, we developed seven hypotheses. A quantitative study was then conducted to test our hypothesis. Several results emerged from this study. In general, consumers are concerned about how companies use their private data and this concern plays a role in their decision to disclose. The analysis confirmed the existence of a "privacy paradox" in the context of data disclosure. More precisely, consumers value the benefits of disclosure (such as a discount) more than the possible future risks of it. Moreover, a preference for small companies –rather than international ones – was highlighted when disclosing their data. Trust, as opposed to control and transparency, is a key influential factor in consumers' decisions making. These results show the importance for companies to find a balance between respecting the privacy of their customers and providing a personalized experience that will make them satisfied and loyal. We find this highly necessary because we are convinced that this ethical, social, political and environmental challenge of collecting private data will remain a major issue in the near future.