CMO Council Report: Without Privacy-First Data Strategy, Brands Risk Losing Customer Trust
As personal digital data — from financial records to facial recognition — floods corporate networks, brands must learn to keep data secure or risk losing customers.
Although 57% of marketers believe that data security, privacy and accountability are the most critical demands for consumers, company executives still struggle with adopting security into their daily focus.
A recent CMO Council report suggests customer trust needs to influence every corporate decision across all digital and physical channels.
John Summers, VP and chief technology officer at Akamai Technologies, calls this approach “Privacy-Assured Marketing,” or the practice of fulfilling the contract of digital trust between customer and business.
The focus for the guideline assures trust is built into each strategy and engagement, following the process that began years ago of gaining one source of customer truth and data, reinforced by taking responsible actions and reactions.
The report — Exceeding the Requirements of the Trust Economy, produced in partnership with Akamai Technologies — calls for marketing, IT, legal and operations to adopt a privacy-first culture.
Attacks on corporate data continue to grow, according to Akamai. From January 2018 through June 2019, Akamai recorded more than 61 billion credential stuffing attempts and more than 4 billion web application attacks.
For example, when Target’s network security failures resulted in some 40 million credit card numbers and 70 million customer records being stolen, the cost of the breach came to more than $320 million after lawsuit settlements, which in reality is just between 2% and 3% of the company’s annual sales.
The cost of the Target brand tied to the breach and the perception of trust in the eyes of customers are much more devastating.
Brand reputation monitors tracked consumer perception of Target post-breach as brand trust plummeted some 26 points within a week after the breach announcement to a 10-year low ranking of -9 of BrandIndex’s ranking where the high is 100 and the low -100.
Ten days later, the brand’s reputation had fallen further to -19. Analysts projected that the blow to reputation could impact the once $25.5 billion-dollar brand valuation by at least $1 billion, according to the CMO Council report.
Emerging technologies aimed at personalizing the customer experience, such as biometric scanners in retail and smart cities, increase the risk of data breaches is among the trends driving the privacy-first culture identified by the data in the report.
Customers are prioritizing data security and privacy, with 87% admitting they will take their business elsewhere if they don’t trust that a company is handling their data responsibly, according to the report, citing a PwC study.
Trust is proven daily, but can be lost in a moment. Summers notes that the first step is making sure that sharing consumer personal data is voluntary all the way through to the transaction. For organizations like Cox Media, this best practice has been implemented, serving as the foundation for all business decisions.