According to Norton, a data breach is an incident of compromised security where sensitive information is accessed by unauthorised personnel.
A study conducted by the Ponemon Institute states that, data breaches cost companies across the world an average loss of $3.86 million. This cost is made up of a number of factors that include loss of intellectual property, theft of critical information, damage to property, disruption of operations and most importantly, loss of customer loyalty.
Data Breaches and Customer Relationship
Customers share personal information with companies because they trust the organization to keep it safe and secure. No one wants their credit card information, purchasing histories or medical records leaked out to the world. When a cyberattack hits a business and results in a data breach, it leaves a negative impact on the customers’ confidence in the company.
A study conducted by Gemalto on 10,000 global consumers discovered that 62% of people believed businesses that hold their information are responsible for its security. When a company suffers a data breach and customer’s privacy is compromised, more than 70% of users stop using the service.
The Case of Yahoo!
Yahoo! was considered a digital pioneer and an internet giant until it was hit by multiple cyberattacks in 2013 and 2014. The data breaches affected 3 billion accounts and the hackers stole the customer names, phone numbers, email addresses, passwords and dates of birth. The attacks cost the organization a loss of $350 million.
The data breaches caused a loss in customer relationships. What made matters worse was that Yahoo! didn’t inform the public about the attacks for 2 years. Consequently, it lost its position as the internet giant to other search engines like Google.
Data Breach Response Plan
The threat of a cyberattack is always looming over your business, thus, it’s extremely important to keep your brand’s security system updated.
However, if a misfortunate event does happen and your organization suffers from a data breach, here’s how you can mitigate its effects on customer loyalty.
Don’t keep your customers in the dark! Let them know what happened immediately because they have the right to know if their privacy has been compromised. This will show them the integrity of your organization and help can minimise the effects of a data breach on customer loyalty to a great extent.
You should be quick on your feet after your organization has been hit by a cyberattack. Evaluate the damage caused by the breach; identify the vulnerabilities in your system and work to fortify the security of your business.
Let Us Help You!
Lean Security is a managed security and IT solutions company dedicated to providing clients with excellent services to help them keep their businesses safe and secure from data breaches.
Our team of experts can assess the technical vulnerabilities of your security system and identify what might be affecting it negatively.
Through penetration testing, network vulnerability assessment and quality assurance services, we can help you keep your security system up to date.
Call us at +61 (2) 8078 6952 for more information.