Reputation loss after a cyberattack can have a major impact on businesses. While large companies may be able to absorb the loss of customers that results, for small to medium businesses, reputation damage and loss of customers can prove devastating.
Cybersecurity consultants and computer forensics firms can be hired to find out how an attack occurred, and new solutions can be implemented to plug the holes through which access to the network was gained. Regaining the trust of customers can be much harder to recover from. Once trust in a brand is lost, some customers will leave and never return.
When personal data has been exposed or stolen, customers feel betrayed. Company privacy policies may not be read, but customers believe that any company that collects their personal data has a responsibility to protect it. A data breach is seen as a breach of the company’s responsibility to keep personal data private and secure, and many customers will take their business elsewhere after such a privacy violation.
Reputation loss after a cyberattack can also make it hard to find new customers. Once information about a breach has been made public, it can be enough to see potential customers avoid a brand.
Extent of Reputation Loss After a Cyberattack
Radware recently conducted a survey to investigate the cost of cyberattacks on businesses. The study revealed 43% of companies that took part in the study said they had experienced negative customer experiences and reputation loss as a result of a successful cyberattack.
Previous studies suggest that as many as one third of customers will stop doing business with a company that has experienced a data breach. A study by Gemalto paints an even bleaker picture. In a global survey of 10,000 individuals, 70% claimed they would stop doing business with a company that had experienced a data breach.
The cyberattack on the telecoms company TalkTalk in 2015 – which cost the firm an estimated £77 million – caused uproar online. Customers turned to social media networks to express their rage about loss of service and the theft of their personal data. The company’s reputation took a massive hit as a result of the attack, not helped by interviews with the hackers who explained how easy it was. The firm claimed it lost around 101,000 customers as a result of the incident. Research from Kantar Worldpanel ComTech suggests 7% of its broadband customers – around 300,000 people – left the firm for another provider.
With such potential losses, it is no surprise that the Marsh and Microsoft Global Cyber Risk Perception Survey in 2018 found that reputation loss after a cyberattack was the biggest concern of companies. 59% of respondents rated it as a major concern.
Steps can naturally be taken to limit customer turnover, repair reputations, and win back customer trust, but repairing damage to a brand and winning back customers can be a long uphill struggle.
Given the high probability of a cyberattack and the potential repercussions, increased investment in cybersecurity defenses to prevent breaches should be given serious consideration.
It is not possible to prevent all cyberattacks, but it is possible to implement security solutions to protect against the most common attack vectors – email and malicious websites – and that is an area where TitanHQ can help.