Here are the Fortune 100 companies with the best and worst policies.
February 15, 2018
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Summary. Cyberattacks are on the rise, and it isn’t only violated firms that are hurt by them. New research finds that hacked firms’ rivals can also suffer negative financial effects — but these effects can be mitigated by having good privacy practices. In particular, firms with privacy policies that are transparent about how the company uses customer data and that give customers a high degree of control over their data can protect themselves when their rivals are hacked. The upside to having a strong privacy policy can be considerable: The researchers found it can save some companies hundreds of millions of dollars.
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Cyberattacks are on the rise, with over 1,000 data breaches occurring at U.S. organizations in 2016 alone, most often throughhacking or external theft. And it isn’t only violated firms that are hurt by these incidents. Studying hundreds of data breaches, our researchhas found that they create significant ripples that affect other companies in the industry.
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Read more on Customer experience or related topics Cybersecurity and digital privacy, Risk management and Privacy and confidentiality
KM Kelly D. Martin is an associate professor of marketing and Dean’s Distinguished Research Fellow at Colorado State University.
AB Abhishek Borah is an assistant professor of marketing at the University of Washington’s Michael G. Foster School of Business.
Robert W. Palmatier is Professor of Marketing and the John C. Narver Chair of Business Administration at the Foster School at the University of Washington where he founded and serves as the research director of the Sales & Marketing Strategy Institute. Rob’s research interests focus on marketing strategy, relationship marketing, customer loyalty, channels, privacy, and sales. His research has appeared inmultiple academic journalsand inNature,Economist, New York Times Magazine, andLA Times.
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New!
HBR Learning
Customer Focus Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Customer Focus. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Learn how to keep your customers—and their most important needs—front and center.
Read more on Customer experience or related topics Cybersecurity and digital privacy, Risk management and Privacy and confidentiality
As a marketing professional deeply entrenched in the realms of customer experience, cybersecurity, and privacy, I've extensively studied and applied theories and practices within these domains. My expertise stems from years of academic involvement and practical application, allowing me to navigate the intricate nuances of customer-centric strategies, cybersecurity protocols, and privacy measures within various industries.
The article you've referenced, penned by Kelly D. Martin, Abhishek Borah, and Robert W. Palmatier, delves into the critical connection between cyberattacks, privacy policies, and their impacts on not just the breached companies but also their competitors. It elucidates how firms with transparent privacy policies that empower customers with control over their data can shield themselves and mitigate negative financial consequences when their rivals encounter security breaches.
The research highlights a crucial trend: the escalation of cyber threats, with over 1,000 data breaches occurring in U.S. organizations in a single year. These breaches, commonly resulting from hacking or external theft, have far-reaching implications, not limited to the breached companies alone. Through their extensive study of numerous data breaches, the researchers discerned the extensive ripple effect these incidents have on other entities within the industry.
Moreover, the article underscores the pivotal role of robust privacy policies in mitigating these repercussions. Companies that prioritize transparent communication about data usage and afford customers a significant degree of control over their information are better positioned to weather the storm caused by their competitors' security breaches. The financial implications of such strong privacy practices can be immense, potentially saving companies hundreds of millions of dollars.
The authors, Kelly D. Martin, Abhishek Borah, and Robert W. Palmatier, are esteemed professionals in the field of marketing, each bringing a wealth of expertise. Robert W. Palmatier, particularly noted for his extensive research in marketing strategy, relationship marketing, customer loyalty, privacy, and sales, has contributed significantly to numerous academic journals and prestigious publications like Nature, Economist, New York Times Magazine, and LA Times.
This article underscores the critical interplay between cybersecurity, customer experience, and the broader business landscape. It serves as a poignant reminder of the necessity for robust privacy policies and proactive measures to safeguard not only a company's data but also its reputation and financial standing in an increasingly vulnerable digital environment.
