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When the worst happens – rebuilding trust after a data breach

The data breach suffered by Fortnum & Mason and challenger bank Monzo this month has shown that any business can become the victim of a data hack, from one of the UK’s oldest retailers to a digital (mobile-only) disruptor. 

The breach may not have been on the same scale as the worst data losses we’ve seen in recent years – which have affected billions of records in some cases – but the potential consequences for corporate reputation and the bottom line are no less significant.

The major breach suffered by TalkTalk in 2015 is a salutary lesson. The company is believed to have lost 95,000 customers following the crisis, while shortly after its CEO, Dido Harding, stood down. 

Businesses need to take data risks seriously. Alongside the immediate priority of plugging any potential security gaps, in the event of a breach brands must focus on rebuilding consumer trust quickly and effectively. 

Preparation is everything 
A poorly handled response to a data breach can have far-reaching implications. However, there are steps that brands can take to protect their reputation when the worst happens. 

Good preparation is key. Businesses that have taken the time to build a strong brand and engage with customers meaningfully – and regularly – will be far better placed to cope.

When we talk about trust in brands, we do so in the same way that we talk about trust in people. Customers are more likely to listen to what a business has to say immediately after a crisis if they already know them to be reputable and trustworthy and feel some level of personal engagement. 

To maintain these levels of trust, brands must ensure that they’re satisfying three fundamental tasks when it comes to user data – what we call the data trust fundamentals. This means: 

  • Providing strong and regular reassurances about security
  • Being transparent about how data is being used and what the benefits of these uses are for customers 
  • Delivering on promises in the form of improved products and services based on the data they hold 

Amazon is an example of getting it right: the company addresses all three fundamentals and according to research we have carried out on trust perceptions of the biggest businesses in the UK, the online retailer comes out on top. This is some achievement given that Amazon uses consumer data on a scale unmatched by anyone else in the market. Crucially, the way it uses data provides genuine utility and an improved service for its customers.
 
Time to act 
A data loss shouldn’t be the first time that a customer receives regular communication from an organisation. This is important not only from a brand engagement perspective but also practically speaking. By having established channels in place to update customers, crisis teams can get news out quickly during what is often called the ‘golden hour’ of crisis management. When something goes wrong, customers should hear about it from the company, not the media.  

While it is near impossible to avoid an immediate loss of confidence, brands show real integrity by owning their mistakes and clearly communicating how they’re going to fix the problem. Both of which can help ensure a speedier restoration of faith. However, hollow words and overly stage-managed reassurances should be avoided. Consumers are smart and grow weary of promises that something will ‘never happen again’. 

A post-GDPR world 
Now more than ever businesses need to consider the reputational risks that data losses bring. GDPR regulations have put data management in the spotlight and while businesses will have gone out of their way to comply with the new standards, customer expectations around what good looks like have shifted. 

The good news is that while technology and the data it produces certainly present challenges to business, they also offer plenty of opportunities. If businesses consider their approach and do the right thing, they will be able to use technology and data in a way that fosters more trusting and enduring relationships with consumers for the long term.   

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