When an organization is hit by a cyberattack, the amalgamation of ransoms, liability expenses, and regulatory fines can result in devastating costs. In 2021, the average cost of a data breach rose to $4.24 million per incident, the highest in history. But financial loss isn’t the only negative consequence of a breach — reputational damage can be just as harmful to businesses. Losing the trust of customers is difficult to recover from, as many will leave and never return; 87% of consumers are willing to take their business elsewhere if a data breach occurs. Future business growth can also be jeopardized, with potential customers driven away by bad press or word-of-mouth. While large companies might be able to absorb a partial loss in customers, losing customers, partners, suppliers, and investors due to reputational damage could be disastrous for small and mid-sized businesses (SMBs).
It doesn’t matter if the target organization is a large corporation with a detailed recovery plan or a small enterprise with fewer resources, downtime is always experienced during and after a cyberattack. In 2021, the average downtime as a result of a ransomware attack was 20 days, often resulting in lost revenue and unproductive, overworked employees.
Particularly in retail, utilities, and critical national infrastructure, the speed of delivering products and services is crucial. Attacks like those on the Colonial Pipeline and Eskenazi Health in 2021 have even led to utility shortages and delayed access to healthcare. Any disruption to these services can be a huge inconvenience to customers, even putting them in danger, affecting public perception of the brand in the long term.
Breaking customer trust
Cybercriminals target customers’ personally identifiable information (PII), including names, addresses, social security numbers, credit card details, and healthcare records, before selling these records in underground digital marketplaces (underground economy). When this personal data is exposed or stolen, customers feel betrayed. A breach is usually seen by the public as a failure on the company’s part in protecting the personal data that they have collected, no matter how sophisticated the cyberattack they suffered.
Compromised PII, therefore, leads to a loss of customer trust and many will simply take their business elsewhere. A notable example is when UK telecommunications firm TalkTalk admitted that the personal details of over 150,000 customers had been exposed. In addition to the financial ramifications, the organization immediately lost over 100,000 customers and around a third of its company value.
The impact on share price
Cyberattacks can also damage a brand’s long-term credibility by lowering its share price. When banking group Capital One suffered a data breach in 2019, in addition to spending $100-150 million on recovery and legal costs, the company’s share price fell by 6%. The impact can be substantial; one report shows companies experiencing a 25% fall in market value over the year following an attack.
Avoid reputational damage with cyber threat intelligence
Facing such huge reputational damage, it’s no surprise that ‘reputation loss after a cyberattack’ was the biggest concern of professionals, with 59% rating it as a major concern. And particularly for startups and SMBs that rely on reputation as the fuel for future business, it’s vital that reputational damage is minimized.
The best way to protect your network and preserve your relationship with customers and partners is to secure your organization before a breach even occurs. Our cyber threat intelligence service, CleanINTERNET, delivers exactly that, shielding 99% of all known threats from entering your network. CleanINTERNET combines and analyzes over 3,500 cyber threat feeds into one service, with our experienced threat hunters working as an extension of your team to monitor the threats that are relevant to your business, no matter its size or industry. This creates a Zero Trust environment within your network, defending your customers and your partners’ data against a barrage of advanced persistent and zero-day threats. With CleanINTERNET, your business can predict and detect emerging cyber threats with no extra effort from your internal team, freeing them up for other business activities and avoiding the additional costs of reputational damage.
Speak to a member of the Centripetal team about how your business can benefit from CleanINTERNET today.