The Value of Customer Loyalty
At a time when it seems more people are distrustful of institutions that are nominally supposed to look after their interests, it’s not surprising to find this trend extending to the realm of information security. According to a recent Ponemon report, which polled consumers from several countries including the US, UK and Germany, 62% of respondents had received notifications from a business or government agency that their data had been compromised via data breach. Concurrently, 69% say that an organization’s security practices are an integral component of maintaining their trust, with some even severing ties with a breached organization. All of which is to say that 2016’s 40% increase in reported data breaches should have businesses alerted to customer loyalty.
Troublingly, however, not all of those in the C-Suite seem to place sufficient value on this. While the study reveals that 80% of consumers believe organizations to be responsible for taking strong preventative measures to protect their data, only around 65% of CMOs and IT professionals concur.
Customer loyalty ought to be a substantial area of interest for any business. A recent Gallup poll adds emphasis here, in which over 60% of Americans worry more about cybercrime, such as data and identity theft, than they do about other types. Coming in second was the fear of having one’s car broken into or stolen, with a point differential of 28%. That is a pretty substantial gap; even I’m surprised, and I cover this topic. Gallup cites as cause of this spike the recent slew of massive data breaches making headlines. The Equifax breach, the Yahoo incidents, all have contributed to this new state of awareness among consumers. Also interesting is the fact that this question, on a poll that Gallup has conducted annually since 2000, was just added this year.
Clearly, even if customer loyalty isn’t exactly going at a premium, organizations should always treat it as though it were.
Both parties will benefit as a result. Research from Forrester shows that organizations that achieve optimal security profiles are 50% less likely to suffer a data breach, while also saving 40% on security costs and millions in breach costs.
Incentive is there; it’s just up to organizations to realize that protecting their reputation and ensuring the loyalty of their customers is a crucial part of the equation, and act accordingly.