Personalization vs. Privacy: Optimizing Customer Lifetime Value under Evolving Privacy Regulations

Abstract

The rapid advancement of artificial intelligence (AI), machine learning, and data-driven automation has transformed the landscape of customer relationship management, enabling unprecedented levels of personalization in products, services, and digital interactions. However, these developments have also raised profound concerns about privacy, data protection, and the ethical use of personal information, especially in light of evolving global privacy regulations. Organizations are thus confronted with a fundamental tradeoff: how to optimize customer lifetime value (CLV) through personalization while maintaining compliance and trust under increasingly stringent consent and privacy constraints.