Preference utilitarianism is a particular type of utilitarianism which defines utility in terms of preference satisfaction. So, like any utilitarian theory, preference utilitarians claim that the right thing to do is that which produces the best consequences, but they define the best consequences in terms of preference satisfaction.

Traditionally, utilitarians were hedonists, believing that utility consists in pleasurable mental states. So e.g. Jeremy Bentham thought that the right thing to do was to produce the most pleasure for all affected.

However, one problem with this view is it implies that what you don't know can't hurt you. For example, suppose someone secretly spread rumors behind a person's back and thereby destroys her reputation. But further suppose that she never finds out about this and experiences no ill effects from it. In this case, since she never experiences any displeasure from the act, the act doesn't harm her, according to the hedonist. This is often called "the experience requirement"; hedonism requires that the subject experience something in order for that thing to be good (or bad) for them.

On the other hand, preference utilitarianism rejects the experience requirement. Since the person has a preference (or desire) for a good reputation, spreading rumors behind her back would harm her even if she never experienced any ill effects from it.