Consumers are likely to change companies if a company seems insecure, or if a data breach is a result of negligence. Brands rely on loyalty – now customers are demanding security in return.
A survey of consumers by FireEye security shows that 76% would switch retailers if it was demonstrated that the company was negligent with data. 75% would switch if a data breach occurred and it was discovered that the board of the company had not prioritized secure handling of customer data.
Also highlighted in the survey is the long-term potential for financial loss to major brands. 59% of consumers warned they would engage in legal action against a retailer if their credentials were used by criminals as the result of a business data compromise. Of the shoppers surveyed, 72% said that they are now less willing to give so many personal details to the companies the purchase from. This stance could have a big impact on organizations like social media platforms and search engines which rely on collecting consumer data for their customers (advertisers).
“Unfortunately, large cyberattacks and data breaches are becoming more commonly associated with brand names in the United States,” said Grady Summers of FireEye. When breaches have occurred in the past, companies have tried to restore trust through providing services such as free financial monitoring, though this doesn’t wash with the person in the street. Summers explains, “…this research finds that, despite these efforts, the cost of the attacks—both financially and in damaged reputations—remain for long after the breach“.
Other findings of the survey: just over half of respondents would think about buying the same product elsewhere for a higher price (52%); the same number consider security to be either the main – or an important issue when purchasing goods or services; over half (54%) feel negatively toward a brand after a breach; 90% expect to be informed within 24 hours of a potential compromise of their credentials.
Brands must be aware that cyberattacks and data protection are not things to be dismissed lightly. Companies should not think that they can ameliorate or bury a breach with free offers and a new advertising campaign – instead they should look at security as an investment. Summers concludes, “As the results tell us, consumers are more aware and increasingly willing to protect their data—not only by sharing less personal information, but also by taking their business elsewhere“.
