The TalkTalk hack shows why every brand must take customer data seriously

With brands from TalkTalk to M&S hit by security flaws with their customer data over the past couple of weeks, it is more important than ever for brands to put data and protecting that information at the heart of their brand strategy.

Data breaches seem to be occurring increasingly frequently, often leading to a public outcry and explosive customer outbursts on social media.

TalkTalk was attacked last week (21 October) by hackers who claimed to have stolen private customer data, including bank details, while a security flaw in M&S website led to customers being able to see other people’s details when they logged into their own accounts. In July this year Ashley Madison, a dating website for people who are seeking an affair, had its database hacked and the details of around 33 million people released.

YouGov BrandIndex figures already show a steady decline in consumer perceptions since the TalkTalk news. The brand is currently at the bottom of the overall Index list that includes 29 competitors and which measures a range of metrics including satisfaction, quality and reputation. Its overall score is -17.2, having fallen 12.3 points over the last two weeks.

In light of this news, research by data-driven marketing and loyalty analytics company Aimia shows that people are steadily becoming more informed when it comes to their personal data.

Of the 8,160 survey respondents, 85% want to know more information about the data companies collect, while 86% want to exercise greater control over the data companies hold about them.

Martin Hayward, Aimia’s SVP of global digital strategy and futures, believes that the report is a much needed wake-up call for brands showing they need to take customer data much more seriously.

“It’s been a Wild West two years. Big data arrived, everyone got very excited and aimed to collect as much data as they could. But now it’s starting to mature.”

– Martin Hayward, Aimia’s SVP of global digital strategy and futures

“We’re starting to see the consumer getting fed up with the tidal wave of messaging by everyone who has their details. They’ve become much more aware of the value of their data.”

Trust is key for brands

The research shows that 80% of respondents will only give data to a limited number of companies they trust, while 59% have taken steps to limit companies from tracking and advertising to them.

“It proves that brand trust is right back at the top of the agenda for businesses and consumers alike. Ultimately, you need people to talk to you, which is why brand trust is more important than ever,” says Hayward.

Unfortunately, many industries are lacking in this department. Of Aimia’s survey respondents, only 38% of people are very or somewhat comfortable with how companies handle their data.

When it comes to personal data, British customers are most distrusting of e-commerce retailers (24%), web services (28%) and airlines (37%). They have the most confidence in financial services (53%), retail (43%) and telecoms companies (43%).

To increase trust, brands should ensure that they’re engaging with customers around data usage, Hayward explains.

“If you follow this principle you can’t go far wrong. You have to involve customers, and allow them to tweak their preferences. Permissions will become more important,” he adds.

Have a plan B

Nick Garlick, cyber security company Nebulas’s managing director, says that there is little brands can do to protect themselves from security attacks.

“The main thing brands can learn from the recent security breaches is that no one is safe. It is happening to the biggest organisations that have invested millions of pounds in securing their infrastructures,” he explains.

Besides having a ‘plan A’, which focuses on the prevention of data hacks, more brands should have a ‘plan B’ that can be put in place when security breaches do occur.

“Most companies have now woken up at a board level and understand that these attacks could possibly happen to them at some point in future.”

– Nick Garlick, Nebulas managing director

“As well as a plan A, they need a plan B, which is a method to detect if they have been breached and a fast response plan,” he says.

If a hack is to take place, brands need to be as open as possible with their customers.

“The quicker you can respond, the faster you can limit any damage. The best way for a brand to recover and regain trust is by being decisive and showing that they’re in control as well as review their security policy on an ongoing basis,” Garlick comments.

  • Hear all about the importance of changing from the inside out and managing brand perceptions at this year’s Festival of Marketing. Taking place on 11 and 12 November there will be 12 stages and hundreds of speakers. Click here for information and to book tickets.

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