Damaging Your Brand with a Data Breach

damaging your brand Building and maintaining your brand is crucial in business.  If you ask someone to name the brands they trust the most, names like Coca Cola, Mercedes, FedEx and Amazon.com come to mind.  These brands have spent a lot of time and money to earn a reputation.  But most importantly, they have earned your Trust.  When I think of the experience behind the brand, I know that I can trust it. 

Some of these brands have become substitute names for products or services within their market.  A lot of people say “I will FedEx a package to you”, whether they intend to use the company’s service or not.  It’s become a verb.  The FedEx brand represents a trust between you and the company.  I know that when I use that service, they will deliver exactly what they say.  I trust them implicitly with my packages and business.

Imagine the consequences if a trusted brand has a data breach and loses sensitive customer information or trade secrets?  The recipe for Coca Cola is probably one of the most guarded secrets in the world.  The company uses that as part of its marketing strategy.  Whether it’s fact or mythology, part of the reputation of Coke is it’s history and secretive formula.  Supposedly no one knows the entire formula and what is known is only trusted to a few key executives.  If someone were to walk out the door with the recipe on a USB drive, Coke’s reputation and brand could be damaged irreparably.  Everything they built could vanish overnight.  

When you lose sensitive data, your customers will question the trust you worked so hard to build.  If they could lose a trade secret, what else could they lose?  Should I worry that my personal information is compromised?  Should I stop doing business with this company because I no longer trust them?

With high profile data breaches, like the Heartland Payment Systems incident last year, the company’s brand and trust were surely questioned.  Whether this ultimately led to business and stock loses is hard to say.  Their financial difficulty may be a result of the economy or their data breach.  Surely all the media publicity couldn’t have helped.  Either way, their brand is damaged. 

Many organizations worry about outside hackers getting access to sensitive information, but a lot of times you need to look inside first.  If an employee or contractor walks out the door with a trade secret or sensitive information, at best you look complacent and at worst you appear negligent.  You may have violated federal or state privacy regulations.  You may be liable for large financial damages, including fines, notification costs, credit monitoring services and lost sales.  Wrap all that up with a damaged brand and you are in a world of hurt.

Many organizations bounce back from brand problems, but I would rather have an ounce of prevention than a pound of pain (my apologies to Ben Franklin).  It’s better to put programs into place now to prevent the problems before they occur.  I think BP and Toyota can learn a few lessons from this.

Comments 3

  1. Great article highlighting the need for everyone to have a much higher computer/data security awareness. What is being done in the name of your domain? Check a (free) blog, “The Business-Technology Weave” (can Google to it) – it reflects what this article is saying. The majority of breaches are due to human error, therefore awareness and common sense are key, in supporting all necessary best practices. The blog author also has a book we use at work, “I.T. WARS” (you can Google that too). It has a great Security chapter, and others that treat security. Highly recommended. Great stuff.

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