Trust fall: data breach perceptions from loyalty and non-loyalty customers

Due to increased technological development in the service industry, protecting consumers’ personal data has become a critical concern. When companies’ information systems are attacked and customers’ profiles are compromised after data breaches, customers may feel more vulnerable about their information privacy. This study uses hotel data breaches as circumstances and aims to understand whether loyalty and non-loyalty program customers would distinguish differently the perceived severity, vulnerability, trust depletion, and crisis response strategies of an organization in response to a data breach. The results indicated that a data breach does not cause significant differences in perceived vulnerability and perceived severity between the two groups. However, loyalty program customers significantly reduce their trust toward the organization after a data breach crisis. This study provides implications to address the importance of customer data protection and crisis responses as part of customer relationship management.