If there’s one certainty in these volatile times, it is that the threat of large-scale, disruptive cyber-attacks is here to stay. From US school districts to major brands like Marks & Spencer (M&S), Cartier and Adidas, organisations across multiple industries and regions have experienced severe cybersecurity breaches – with fallout lasting weeks and sometimes months.
The attackers don’t seem to differentiate by size, industry, or age – indeed, even ransomware extortion group Lockbit suffered a breach of their own in May. Any organisation is a potential target and there’s no room for complacency. This is now an everyday reality for modern businesses.
If there’s one certainty in these volatile times, it is that the threat of large-scale, disruptive … More
Long-term reputational damage
The immediate disruption for companies and customers can be severe, ranging from empty supermarket shelves to payment outages and long delays in online orders. Attacks can also result in serious data breaches, potentially heightening the onward risk of fraud attacks against their customers.
In the UK, Deutsche Bank estimated that the recent cyberattack and resulting outages have been costing M&S £15m a week in lost profits, and the issue looks set to continue through the summer.
And in the long term, disruptions of this scale can often erode consumer trust. Earlier this year, we conducted extensive research into the key factors influencing perceptions of an organisation’s reputation, as well as the impact of customer service failures on long-term reputation and customer engagement. Our data shows that 61% of customers who experienced a major customer service failure feel it has eroded their trust in the organisation.
What’s even more concerning is that 24% of customers have avoided using an organisation after experiencing a major customer service failure, and a further 30% say they will avoid using the business if they can. This highlights the impact on customer confidence that cyber-attacks and other forms of service disruption can have, leading to longstanding reputational damage.
Earning goodwill
However, organisations that focus on the right things can mitigate these impacts in significant ways. What we have seen from the M&S case is, even while suffering catastrophic financial damages, brands who have achieved consistently high levels of customer satisfaction retain goodwill, loyalty, and even sympathy from their customers. This ultimately should lead to a faster, smoother recovery once things come back online, with – most importantly – a reduced reputational impact.
So, what lessons can be learned?
For me, it’s about building a strong reputation for excellent service, showing that you genuinely care about your customers, and communicating with authenticity and honesty during times of crisis.
Embedding a culture of service from the boardroom right down through the business will also better connect your organisation with your customers, which creates a bank of goodwill to fall back on when disaster strikes.
The importance of communication
Today’s consumers are used to receiving constant information and updates. Our risk and reputation research, which I referenced earlier, shows that customers who have experienced a major customer service failure look to their phones, live websites and apps for information and want updates to reach them there.
Companies need to meet this demand to retain their support, demonstrate transparency and honesty about the scale of disruption to their services, be clear about the consequences that may have occurred and issue apologies and updates to customers across all available touchpoints to ensure they are kept informed.
Additionally, a consistent, human approach to crises can reduce negative responses from many customers and, in many cases, inspires warmth and sympathy for the brand or organisation. And if the disruption is large-scale and likely to create severe negative backlash, having the head of your organisation remain visible and publicly acknowledge the issue adds a personal face to your organisation, which can be critical.
Customers who have experienced a major customer service failure look to their phones, live websites … More
No room for complacency
All of this being said, brands with a good record of customer service shouldn’t be complacent. Consumer patience and understanding will only go so far.
Recent developments have served as a wake-up call to many business leaders about the importance of ongoing investment in sophisticated cybersecurity systems and the risks associated with overreliance on technology. Businesses with well-trained service and operational people can adapt in the face of systems failures to ensure the show goes on.
Crises are inevitable, whether due to cyber-attacks, power outages or something else unexpected. Brands can’t afford to be reactive. How would your organisation respond to a high-profile operational challenge, and will your customers support your recovery or jump ship to a rival given the opportunity?
