PRIVACY = CUSTOMER TRUST
Trust economics is about customers trusting you to safeguard their personal data. As it is a customer expectation, privacy should be a functional requirement of every new or enhanced product, service, process, systems, software, and technology your company uses to safeguard customer privacy and information. In addition to establishing and maintaining trust with your customers, research also shows that when your customer prospects ask your current customers about their experience with your company, your future customers receive positive feedback that your products and services are to be trusted.
Privacy is sometimes mistakenly thought to be an obstacle, a cost sink for a business, when really it creates and maintains brand trust and loyalty.
A privacy breach can have a huge impact on your organization's reputation and bottom-line. The Ponemon Institute's annual data breach cost studies find the average breach cost is about $200+ per compromised record across all industries. If 33,000 records were compromised, the total cost would be $6.6 million.
Breaches have wide-reaching, disruptive, and costly impacts:
Lost business opportunity, including customer churn and higher acquisition losses
Fines and penalties, including restitution costs if customers harmed
Lawsuits, including class-action law suits if customers harmed
Direct operational costs, including legal, notifications, credit monitoring, consultants, call center, forensics, system repair, marketing, public relations
Lost productivity dealing with customer concerns, the press and legal responsibilities
Increased regulatory oversight and costs, including regular independent audits
Director and officer liability
The biggest surprise realized by CEOs after a breach is the ongoing (often a year or more) adverse impact on productivity, including the CEO, dealing with the media, customers and other stakeholders in crisis management mode to restore company reputation and customer trust.
COST TO PROTECT
The Gartner Group found the total cost of encryption, intrusion protection, and auditing solutions averages $16 per record. In other words, the cost to protect data is only 8% of the cost of just a single privacy breach on a per record basis.
The good news is that Verizon Business' annual data breach investigations reports generally indicate that 96-99% of breaches year-to-year are preventable by reasonable controls.
SoCal Privacy's Lean, Sustainable, and Legally Defensible privacy and security programs reduce the likelihood of breaches occurring and the impact of breaches if they do occur.