What's in a ‘Name’? Impact of Use of Customer Information in E-Mail Advertisements

What's in a ‘Name’? Impact of Use of Customer Information in E-Mail Advertisements

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Article ID: iaor20125666
Volume: 23
Issue: 3-Part-1
Start Page Number: 679
End Page Number: 697
Publication Date: Sep 2012
Journal: Information Systems Research
Authors: , , ,
Keywords: management, e-commerce
Abstract:

In this study, we examine how consumers respond to firms' use of two types of information for personalization: product preferences and name. We collect a unique data set of over 10 million e‐mail advertisements sent by a website to over 600,000 customers who could buy the advertised products from the online merchant. We estimate a two‐stage hierarchical model using Bayesian analysis to account for observable and unobservable consumer heterogeneity. Our analysis suggests several interesting results regarding consumers' responses to firms' use of information. When firms use product‐based personalization (where the use of information is not explicitly mentioned), consumers respond positively. On the other hand, consumers respond negatively when firms are explicit in their use of personally identifiable information (i.e., a personalized greeting). We also find that negative responses to personalized greetings are moderated by consumers' familiarity with firms. The main contribution of this study is that it not only indicates the economic benefits of personalization in e‐mails but also highlights consumers' concerns over the use of information in personalization.

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