Data Breaches hurt Businesses’ Brand
That very newsworthy data breach that’s still in the news struck 110 million customers, not the more commonly reported 40 million; that’s one-third of the U.S. population.
There was also another, but less publicized, breach of huge proportions that occurred to a major retailer in mid-December of 2013. And some reports say another 6 or more retailers may be affected in a similar breach.
The major-news retailer that got kicked in the butt by cyber criminals has run full page newspaper ads apologizing for not effectively protecting customers’ data, and hoping to win back consumers’ trust and loyalty. Kind of sounds like the Tylenol poisoning scare in the 1980s when the drug maker went on a massive ad campaign to win back consumers’ trust.
But with each new revelation of more data being compromised and growing concern of additional fraud, has come more media and customer scrutiny resulting in compounded brand damage.
Trust and Security
Feeling secure and trusting the brand is a major force behind consumer loyalty. Prior to that massive December breach, the retailer was right up there with its huge competitors as far as meeting reasonable consumer expectations.
That data breach has severely tainted the retailer’s customers’ trust. The 2014 Customer Loyalty Engagement Index accesses the retailer’s brand engagement level to be about 6 percent.
Sales have plummeted since the breach hit the news. Recovery is expected to be slow and arduous, and social media is fueling the sensationalism. It can take years to build up trust, but just a few hours of news “going viral” to crush it.
All is not lost.
The adage “What doesn’t kill us makes us stronger” plays a vital role when companies embrace their failures, learn from them and do right by their customers. The next few months will have a serious impact on the future of the breached companies and every retailer who accepts credit cards for payment.
Now is the time to beat the drum of customer security and bring awareness to how your company protects customer data.
Robert Siciliano is an Identity Theft Expert to AllClearID. He is the author of 99 Things You Wish You Knew Before Your Identity Was Stolen See him knock’em dead in this identity theft prevention video. Disclosures.