Online buyers value privacy, but not much

Behavioral study shows price people put on privacy is lower than they say

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When both sites charged the same for a ticket, but one said it would send ads to customers via email, 62 percent of customers bought from the site that promised no follow-up email ads.

When the site promising no email ads raised the price half a euro, it lost all but 13 percent of the available customers.

Privacy is valuable, but not as valuable as cash

The conclusion of all the experiments was that consumers do actually value their own privacy, to the point of putting a different price on different bits of data.

Consumers also value promises that a vendor won't bother them with follow-up advertisements after a purchase and on the need to receive those pitches later in exchange for a lower price.

Neither one is nearly as valuable as cash, however; a very small difference in cost justifies fairly large changes in behavior that would protect consumers' privacy.

The EISA report was designed to produce policy recommendations for the EU, so it's worth looking at just to get a heads-up on potential changes in EU rules on customer data.

Assuming Europeans are a similar-enough species to Americans that behavioral patterns are similar, the study's conclusions offer some good guidelines for U.S.-based commercial web sites as well:

 

Consumer behavior and the economics of privacy:


Consumers view their data as having value, and will conserve it where possible in the same way they do their money. When the product is the same but the price is different, however, the vast majority choose the lower priced option, demonstrating they value money more than privacy.

Photo Credit: 

Reuters

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