No Privacy, No Purchase

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Let's get right to the point: Consumer worries over privacy can trickle down to the bottom line, finds a working paper published by the Marketing Science Institute (MSI) in Cambridge, Massachusetts. In any given situation, "the more control a person has over their personal information, the more likely they are to make a purchase," says Joe Phelps, coauthor of the paper and an associate professor at the University of Alabama. "We hadn't seen [other research] look at this exact issue before."

Total control over their personal records is not all that consumers demand. They also don't want to be asked nosy questions about their income, Phelps adds. Only 3 percent of respondents in the MSI study say they are always willing to reveal their annual income to marketers, compared to 49 percent who will share their marital status. Not surprisingly, consumer purchase intentions drop significantly when a marketer seeks financial information than when other demographic details are requested.

What else improves the chances that a shopper will open her purse strings? The promise of less junk mail. According to the researchers' analysis, a consumer will be more interested in buying from a particular marketer if she is promised that, in return for revealing personal information, she will get less rather than more advertising in her mailbox. In fact, less may be more: 52 percent of respondents who averaged six or more pieces of direct mail a week say they enjoyed reading most of the catalogs and advertising they received, compared to 65 percent of households who received fewer come-ons each week.

For more information, contact the Marketing Science Institute at (617) 491-2060.

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