9 Reasons Why an Organization’s Reputation is So Important
“The hours, days, weeks and even months after your organization has been the target of a data breach can feel like the company’s darkest time,” writes Russell Roering in a forbes.com article. “The most trusted brand names have experienced lost customer trust, damaged employee morale and concerned stockholders.”
Reputation really is everything, here are all the reasons why an organization’s reputation is so important and needs to be protected.
It takes time. "It takes 20 years to build a reputation and five minutes to ruin it," said business magnate Warren Buffett. "If you think about that, you'll do things differently."
It can take years to restore business reputation. The Reputation Impact of a Data Breach research report published by Ponemon showed that 54% of companies believe it can take 10 months to more than two years to restore a company’s reputation following a breach of customer data.
It’s a calling card. Industry experts say that reputation can attract resources and business and support long-term profitability. An untarnished reputation will also show customers, employees and partners that you can be trusted.
Stakeholders are more understanding. “If a company has good information security policies and practices in place and a breach occurred as a result of a malicious attack,” said Bruce Andrew, Executive Vice President, Marketing and Customer Experience at Shred-it, in the 2014 State of the Industry Information Security report, “a reasonable person would recognize that the proper steps were taken and trust in the organization will remain.”
Reputation loss is costly. The Ponemon research calculated the average value of brand and reputation was approximately $1.5 billion. Depending upon the type of information lost as a result of the breach, the average loss in the value of the brand ranged from $184 million to more than $330 million.
The bottom line. A recent survey commissioned by secure payment technology provider Semafone showed that more than 86% of those polled were “not very likely” or “not at all likely” to do business with a company that experienced a data breach involving credit or debit cards. Also, a Radius Global survey showed that many consumers would pay more for products and services from firms that went the extra mile to protect their data privacy.
Data breach connection. According to a Forbes Insights study, The Reputational Impact of IT Risk, a data breach has the potential to do the most damage to a firm’s reputation out of all the common threats; 46% of organizations suffered damage to their reputations and brand value as a result of a cyber security breach.
Happier employees. According to a fastcompany.com article, employees prefer to work for a company with a good reputation. Some research shows they tend to work harder and for lower wages.
It can be so easy to damage. Shred-it’s ‘Don’t Throw Your Reputation in the Waste Bin’ white paper reported that the following practices increase the risk of a data breach:
Throwing confidential information into waste or recycling bins;
Losing or mishandling emails or internal communications;
Using unsecured networks;
Malicious or disgruntled employees (may steal info);
Losing mobile devices;
Not correctly destroying hard drives containing confidential information.
Information security policies and procedures can help prevent a data breach that can do long-term damage to a company’s reputation. This video shows how to protect it.