Does self-disclosure matter? A dynamic two-stage perspective for the personalization-privacy paradox

Although marketing managers are relying increasingly on customer data, insight into the best approaches for resolving the personalization–privacy paradox remains limited. Specifically, we argue for the success of a personalization involving the integration of two stages: the self-disclosure stage and the personalization stage. Using a conceptual framework grounded in the foot-in-the-door effect, we argue that compliance with commitment to self-disclosure as the initial small request induces greater compliance with the later target request. The results of a large-scale two-stage field experiment based on a combined propensity score matching and difference-in-difference model show positive causal effects of the act of self-disclosure and the positive effect of the intensity of self-disclosure on purchase responses to personalized promotions. The results also indicate that a combination of privacy assurance and personalization declaration drives customers’ act of self-disclosure and increases the intensity of self-disclosure. Findings empower managers to capitalize on new opportunities in personalization.