Users' Perceptions of Benefits and Costs of Personalization

Companies collect a wealth of personal data about their customers to be able to target their promotional messages to customers' interests and demographics. Information technology and the Internet in particular have created new opportunities for data collection, storage and processing. While technology enables companies to address customers directly and therefore to increase sales and customer retention, this form of personalization may infringe upon users' desire for privacy. To examine this trade-off, we first identified benefits and costs of personalization based on the findings of qualitative interviews. Next, we conducted a quantitative survey to assess the risks people perceive for various data types and illustrate how people's general attitudes toward personal data sharing determines their perceptions of benefits and costs of personalization.