
- Customer trust
- Leadership effectiveness
- Involvement of third parties
- Preparedness
Customer Trust
If you’re thinking you’d fall into the 1 percent category, don’t be so sure. The average abnormal churn rate is 3.4 percent, and it goes up in industries where customers have high expectations for data protection and can easily take their business elsewhere. The highest abnormal churn rates are in healthcare (6.7 percent) and financial (6.1 percent).
To earn and protect customer trust, it’s important to have programs in place to encourage customer loyalty before a breach occurs. Ponemon also found that organizations were able to reduce churn by having a senior-level officer in charge of directing initiatives to improve customers’ trust in the organization’s ability to guard personal data — which leads us to our next point.
Leadership Effectiveness
Unfortunately, having leadership involvement is easier said than done — 24 percent of Deloitte’s survey respondents said one of their greatest crisis management challenges was leaders’ effectiveness and decision making.
To address these challenges, Deloitte recommends establishing crisis management roles ahead of time, taking leadership styles into consideration (e.g., speed of decision making under pressure). To keep leaders involved in the crisis management strategy, focus on “what keeps them awake at night.” This post has some pointers for appealing to various executive roles. While it is specific to business continuity, a lot of the same principles apply to crisis management.
Involvement of Third Parties
But while third parties are part of the problem, Deloitte points out that they’re also part of the solution. Fifty-nine percent of survey respondents perform exercises including critical service providers, joint venture partners, resellers, distributors, etc. By involving third parties, you can pinpoint problem areas and address them before a crisis.
Preparedness
It’s also important to exercise the plan to make sure it works (and, as we mention above, be sure to involve third parties). It’s noteworthy that Deloitte found that 92 percent of respondents believe IT departments are prepared for a crisis. Only 77 percent think supply chain functions are prepared. The reason? Most IT functions (nearly 70 percent) have participated in a crisis simulation or exercise during the past two years. Deloitte’s study offers guidance for building a crisis simulation, and we’ve compiled a few tips for integrating disaster recovery and crisis communications.
In addition to having a plan and practicing it, Ponemon reports that you can reduce a data breach’s cost per record by having certain measures in place (this list isn’t exhaustive, of course):
- Incident response team — saves $14 per record
- Extensive use of encryption — saves $13 per record
- Business continuity involvement — saves $9.30 per record
- Employee training — saves $9.30 per record
- Insurance protection — saves $4.80 per record
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