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

Abstract 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.