How Security Lapses can Impact the Value of your Brand
It is often talked about the "value" of a brand - but what does it actually consist of? The value of a brand does not only consist of the financial ratios and valuations. Brand Value can bestbe described as the sum of how much people will choose one brand over the alternatives. People are willing to pay over the odds for a desirable product, such as Apple's Iphone, even if the alternatives have an identical performance. Strong brands can command a premium, resultingin high profits for the owner.
It takes time to build up a strong brand; however the value of a brand can disappear very rapidly if the positive perception of the product or service is put into doubt. In the past brandslost value due to such events as product recall, product failure or lack of reliability, as onecould see impressively with Volkswagen, whose market value had fallen by more than 50% after the acquaintance of the exhaust gas scandal, and the worldwide slide of reputation of the VW brand.
The age of Internet has added a further dimension to the issue of protecting brand value. Today websites and web applications are the most visible and increasingly vulnerable part of acompany`s infrastructure. It is no surprise that cyber criminals scan thousands of websites insearch of vulnerabilities.
When a security breach occurs, it`s not just consumer data that is compromised. If it becomes known that a breach has occurred, consumer confidence and trust in the brand alsofalls resulting in falling sales and loss of revenue. This can translate into long-term declines inrevenues and subsequently massive investments to regain consumer confidence. Such breaches make big headlines when big brands are involved. As an example, the security vulnerabilities discovered on Samsung Smart-TV a few days ago, which will possibly again have a negative effect on the sales figures as well as on the image of the brand Samsung.
This leads many SME`s to think that just because they are small this makes them immune to such threats. Such companies should assume that they too are equally under threat from cyber criminals. Given that such companies do not have the financial resources large companies can muster, the threat to SME`s financial existence is in fact larger.
This makes it crucial for SME`s to take the problem seriously and act proactively to deter cyber criminals. This means that the work force needs to be made aware of the importance of following clear rules when handling sensitive client data. Adopting BSI basic protection conceptor the ISO 27001 as a bench mark are sensible first steps; they do, however, need to belived by all in the company. Establishing a clear protocol is crucial as is a constant monitoring of new scams and methods employed to breach your company's cyber defenses. Technology helps, but don`t forget that it is the employee who is the weakest link in the defense ofyour data. Make sure that only suitably vetted and screened personnel can access sensitive data and above all, adjust the level of data security to the threat level.
Disclaimer: Assessments of security situations are based on the information available at the time specified and assessed as trustworthy by German Business Protection (GBP). Although the compilation of the information was handled with extreme care, GBP cannot be made responsible for the timeliness, accuracy or completeness of the article. In no event GBP can be held responsible for any damage of any kind a rising from the use of the information provided here, whether direct or indirect or consequential damages, including lost profits. Hazardous situations are often confusing and can change rapidly.