[ISN] How Companies Can Rebuild Trust After A Security Breach

http://www.forbes.com/sites/katevinton/2014/07/01/how-companies-can-rebuild-trust-after-a-security-breach/ By Kate Vinton Forbes Staff July 1. 2014 “It’s not a question of if you will be hacked, but when,” says cybersecurity expert Joe Adams. This is bad news for companies, not only because of security risks, but also because data breaches have a significant and measurable impact on customers’ trust and spending habits, according to a study released Monday. The good news? Customers, who are generally not concerned about security until a breach happens, are looking for transparency and timely responses to breaches, something companies can provide with enough preparation and foresight. Interactions, a customer experience marketing group, released a study Monday called “Retail’s Reality: Shopping Behavior After Security Breaches.” Using the same sampling as the 2010 U.S. Census, the study looks at how security breaches impact customers’ shopping habits. Forty-four percent of survey respondents had been the victim of a data breach. A higher 60% of Millennials had had their data stolen, likely because these 18 to 24-year-olds are much more likely to share their information online and sign up for retail credit cards, according to DeMeo, Vice President of Global Marketing and Analytics at Interactions. Trust for retail is low, with 45% of shoppers saying they don’t trust retailers to keep their information safe. After a security breach, 12% of loyal shoppers stop shopping at that retailer, and 36% shop at the retailer less frequently. For those who continue to shop, 79% are more likely to use cash instead of credit cards. According to DeMeo, shoppers who use cash statistically spend less money, hurting the company. Indeed, 26% say they will knowingly spend less than before. All this paints a concerning picture for retailers looking to both keep their company secure and minimize the negative impact of a security breach if