Building consumer trust critical to online marketing success, researchers find

Feb 29, 2012

(PhysOrg.com) -- With identity fraud and the increasingly open Internet growing, consumers seem less likely to give out personal information online. For e-commerce and online marketers, this is a roadblock to the customer service and market research on which they thrive.

So what makes more willing to give out their personal information? A paper just published in the Journal of Service Research by professors at The University of Alabama, Troy University and Loyola Marymount examined the factors that affect a consumer’s willingness to reveal basic and sensitive personal information online.

The researchers found four basic factors that individually, or in combination, affect the likelihood that consumers will divulge personal information. Specifically, their study suggests that (a) sensitive information is riskier to divulge and therefore less likely to be disclosed, (b) giving consumers control over how their information will be used by the firm can increase disclosure, particularly if that information is sensitive in nature, (c) customizing the web experience to provide enhanced web benefits can increase disclosure particularly if the firm also enhances consumer control and lowers consumer specific to their website, and (d) web strategies that lower privacy concerns can increase disclosure particularly when the requested information is sensitive.

“While the acquisition of sensitive information is often the goal of online marketers, our research suggests that control, customization and trust-building activities to reduce privacy concerns are critical to convincing consumers that it is in their best interest to divulge such information,” said Dr. David Mothersbaugh, professor of marketing at the Culverhouse College of Commerce at The University of Alabama and one of the authors of the study.

“Given consumers’ reluctance to provide sensitive information, firms should be vigilant in obtaining the least amount of possible, while still effectively marketing to their customers,” said Dr. Sharon Beatty, professor of marketing at Culverhouse and another author of paper. “They also should note the importance of building trust in their firm, as well as providing consumers control to the use of the information, before attempting to obtain this information.”

Some firms are already changing their websites to conform to what the research has found. Google recently changed its privacy policy to emphasize both a consumer’s control over the personal information they share, as well as the perceived benefits of Google using such information.

A section called “privacy tools” gives consumers, according to Google, “meaningful choices to protect your privacy” through features like encrypted searches, incognito mode in Chrome, off-the-record chatting, and general personalization opt outs. As Google states on the website, “our new policy simply makes it clear that we use data to refine and improve your experience” by getting consumers “better search results, ads and other content” (google.com).

This is, or should be, the goal of any website, the researchers said.

“New privacy policies and features to help users control will help make such goals transparent and, in theory, easier to achieve,” said Dr. Katherine Lemon, Accenture Professor at Boston College and editor of the journal. “More firms can follow Google’s lead to redesign their websites and privacy polices so they can encourage customers to willingly disclose additional information.”

In recognizing the burdens of disclosure and the difficulty of overcoming consumer concerns, firms should consider, the researchers said, matching their information requests to the specific needs at hand.

“A one-size-fits-all strategy to information gathering is not appropriate,” Mothersbaugh said. “Firms must consider both their information needs and the privacy concerns of their various consumer segments and request the least sensitive possible for effectively marketing to each of those segments.”

Additionally, according to the article, firms can mitigate customer privacy concerns if they improve their website perceptions through factors that increase consumer trust, such as obtaining privacy seals and strengthening corporate reputation. By tweaking websites to increase consumer trust and control, and by making the benefits of customization salient, online marketers can more easily gather essential consumer data.

Explore further: Performance measures for CEOs vary greatly, study finds

More information: A copy of the article, “Disclosure Antecedents in an Online Service Context: The Role of Sensitivity of Information,” by Mothersbaugh, William Foxx II, Beatty and Sijun Wang, can be viewed at the Journal of Service Research website:jsr.sagepub.com/content/early/recent .

add to favorites email to friend print save as pdf

Related Stories

Study: Consumers, Marketers Differ on Electronic Privacy

Jul 09, 2010

A new study by researchers at the University of Massachusetts Amherst shows that consumers and marketers have different expectations for privacy boundaries when new technology is used, and consumers most often prefer an opt-in ...

US senators introduce online privacy 'bill of rights'

Apr 12, 2011

US senators John Kerry and John McCain introduced an online privacy bill Tuesday that seeks to strike a balance between protecting the personal information of Web users and the needs of businesses to conduct ...

Recommended for you

Performance measures for CEOs vary greatly, study finds

4 hours ago

As companies file their annual proxy statements with the U.S. Securities and Exchange Commission (SEC) this spring, a new study by Rice University and Cornell University shows just how S&P 500 companies have ...

Investment helps keep transport up to speed

9 hours ago

Greater investment in education and training for employees will be required to meet the future needs of the transport and logistics industry, according to recent reports by Monash University researchers.

Sharing = Stealing: Busting a copyright myth

Apr 11, 2014

Consumers copy and share digital files. This has been blamed for a potentially catastrophic decline in certain markets. But why do consumers copy? And is it as economically harmful as often thought?

User comments : 0

More news stories

Down's chromosome cause genome-wide disruption

The extra copy of Chromosome 21 that causes Down's syndrome throws a spanner into the workings of all the other chromosomes as well, said a study published Wednesday that surprised its authors.

Researchers see hospitalization records as additional tool

Comparing hospitalization records with data reported to local boards of health presents a more accurate way to monitor how well communities track disease outbreaks, according to a paper published April 16 in the journal PLOS ON ...

Ebola virus in Africa outbreak is a new strain

The Ebola virus that has killed scores of people in Guinea this year is a new strain—evidence that the disease did not spread there from outbreaks in some other African nations, scientists report.