Personalized online promotions : long-term Impacts on customer behavior

Abstract

Personalization is widely used by marketers in today's world. It is not only a competitive advantage but is becoming a necessity for companies. Recent information technology advances have helped a lot to improve personalization methods. Companies could collect data about their customers through the Internet more easily and quickly. In return, companies create more values for their customers through personalization in performance as well as personalization in relationship. However, personalization may also bring new problems if customers are concerned about issues such as privacy, choice overload, and perceived fairness. This thesis examines the advantages and disadvantages of personalization from both customers' and companies' perspectives. It also studies how customer reactions to personalization change over time, and suggests a conceptual framework that shows how customer behavior affects companies' profitability. It concludes with recommendations about how companies should act in order to have successful online personalization strategies.