In 2013, about 40 million consumers who made purchases at Target had their credit and debit card numbers stolen. Hackers invaded the Target’s payment card readers and stole personal contact information of another 70 million consumers. The consequences of this hack attack were devastating for the company.
After the attack, Target had to spend $61 million on legal fees, credit monitoring, software updates and other costs. Over 140 customers hit Target with lawsuits. The company’s profit dropped almost 50 percent. The customers’ trust was violated.
What we learned from Target’s security breach
- 12% of a retailer’s local customers stopped shopping after a security breach
- 36% said they would shop less frequently after the breach
- 79% said they would more likely use cash instead of credit cards
- 26% of customers who return to the retailer will spend less money than they would before the breach
- Customers who had their data stolen are more likely to spread the word about their experience
- 34% of that group of shoppers would complain on social media
- 20% of that group comment directly on the company’s website
(The survey was carried out by consumer experience marketing company Interactions)
Cybersecurity expert Joe Adams once said that it is not a question of if you will be hacked, but when. In other words, it is important to know how to behave when data breaches occur. In today’s world, we can do a lot to prevent hackers from stealing data. But, cybercriminals also use advanced technology to attack devices we use every day.
There is one thing that you can do when your customers’ data is stolen, and that is complete transparency. Clear communication with your customers will help you regain their trust and loyalty.
Regaining customers’ trust
These numbers are scary, but there is a way to regain your customers’ trust after a security breach. About 22% of customers would return to a retailer after they learn that the retailer resolved the security issue. Also, 52% of customers would sign up for a retailer loyalty card if they believe that security problems are now in the past.
Complete transparency and quick communication seem to be the key to restoring customers’ trust after a hack attack.
It is never pleasant to contact someone with bad news. But, you can prevent a lot of troubles if you contact people earlier rather than later. That’s why you should contact your customers immediately after a security breach happens. This way, you are allowing your customers to take appropriate measures. Also, you are allowing them to trust you because you cared enough to contact them on time.
The thing is, problems will always occur. It is how we react to those problems that really matters.
When it comes to data breaches, people will appreciate your effort to prevent further complications. In this case, they will even understand that your system wasn’t immune to hackers.
Of course, Target is not the only company that had security issues. According to a research, over 50% of data breaches are the result of an accidental data disclosure. This includes theft or even loss of a laptop.
Millennials are more susceptible to data breaches
According to the same survey, Millennials are more susceptible to security breaches than Baby Boomers. The reason is because they are more likely to share personal information online. Millennials were born with the internet. They use retail loyalty cards and maintain multiple accounts more often. That being said, they are a more frequent target for data breaches.
Employee security education
Companies are thus advised to strengthen their security infrastructure. Strong authentication, encryption and network security are also advised. It is important to educate and inform employees of procedures for protecting data on both personal and corporate devices.
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