A new report shows a third of U.S. and European consumers would take their business elsewhere if your company experiences a security breach.
In the U.S. last year, over 52 million account records were reportedly stolen or misplaced; in 2006, reports of security breaches continue. The study, "Secure the Trust of Your Brand: Assessing the Security Mindset of Consumers," conducted by the CMO Council and Opinion Research, finds a quarter of consumers are increasingly concerned about the companies they do business with and will go elsewhere if they feel their personal information is at risk.
In the U.S., 30 percent of survey respondents said they have always been concerned about security. In Europe, 38 percent have always been concerned. A combined 60 percent of U.S. consumers are now a little, more, or very concerned about security, compared to 54 percent in Europe. Ten percent of U.S. and 8 percent of European respondents are unconcerned.
When selecting a brand, consumers rank a company's products and services (77 percent in the U.S., 74 percent in Europe); company treatment of customers (77 percent in the U.S., 63 percent in Europe); honesty and ethics (62 percent in the U.S., 48 percent in Europe); security provided to customers (33 percent in the U.S., 39 percent in Europe); employee treatment (28 percent in the U.S., 29 percent in Europe); environmental concerns (11 percent in the U.S., 25 percent in Europe); and social responsibility (11 percent in the U.S., 17 percent in Europe).
Though security ranks fourth, it can immediate affect the brand. Customers will back out of a transaction in progress if they feel threatened. "Security is what I call the 800-pound guerilla of reputation," said Jeffrey Resnick, EVP and global managing director of Opinion Research. Clearly, consumers are very concerned about security and when they have security issues during a transaction, they don't hesitate to stop the transaction. Consumers feel corporations have a responsibility to provide end-to-end security."
Personal experience makes consumers more on edge. A company has lost or compromised the personal, financial, or medical data of 53 percent of U.S. respondents and 47 percent of European respondents. Sixty percent of respondents have experienced computer security breaches, intrusions, hacking, or other disruptions, like viruses and spyware, at home in the U.S. That number is 70 percent in Europe.
"When a large portion of the population is saying they are getting phishing e-mails, it starts to make people wary about when they use the Internet," said Resnick. "It becomes a marketing mandate for companies to make sure their customers understand what security they have in place."
Consumers who feel threatened may look for other brands for products and services. Forty-three percent of U.S. respondents have stopped a transaction online, on the phone, or in the store at a point when they began to question security. In Europe, 37 percent of respondents said the same. If a company does experience a security breach, 36 percent of U.S. respondents and 29 percent European respondents would wait to see how the company or regulators respond. Thirty-four percent U.S. respondents and 37 percent European respondents would consider taking their business elsewhere. If a security breach happens, a company's response is tantamount to retaining its customers' brand loyalty.
"It is in the company's best interest to fully understand what their customer's security concerns are and address those through marketing actions as well as technology," said Resnick.
The report is the first in a series on the impact of security of corporate brands and brand loyalty. Data were compiled in the U.S. and Europe (the U.K., France, Germany, Spain, and Italy) via surveys conducted by Opinion Research from April 25 to May 7. The report was underwritten by Factiva and Symantec. Additional research partners include the Zyman Institute of Brand Science at Emory University.
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