Arcserve, LLC, has released results from new research that measures how cyber crime influences purchasing activity and brand loyalty. It found that while most consumers are taking necessary security precautions to protect their online accounts, some businesses may not be doing enough to protect their information – inadvertently driving sales to competitors that can.
A survey of nearly 2,000 consumers across North America, the United Kingdom, France, and Germany, found that 70 percent believe that businesses aren’t doing enough to adequately secure their personal information and assume it has been compromised without them knowing it. And, as consumers become more educated and cyber attacks become well-known, perceived trust becomes more influential in their purchasing decisions, with the study also finding that:
- Nearly nine of ten consumers consider the trustworthiness of a business prior to purchasing a product or service; and,
- 59 percent of consumers would probably avoid doing business with an organization that had experienced a cyber attack in the past year.
Consumer tolerance threshold
Cyber attacks have arguably become the largest business threat in normal times, however the quantifiable impact on consumer activity has not been widely understood. The study found that one in four consumers will abandon a product or service to move to a competitor after a single ransomware-related service disruption, failed transaction, or instance of inaccessible information. It also found that tolerance for these events quickly deteriorates, with:
- Over 66 percent of respondents citing they would turn to a competitor if an organization couldn't restore systems and applications within three days following a cyber attack; and,
- Over a third of those would be willing to switch after a mere 24 hours of waiting to access their information or make a transaction.
Moreover, the potential damage doesn’t stop during or shortly thereafter a cyber attack event. More than eight in ten respondents admit to sharing their negative, ransomware-related experiences with family, friends or colleagues, posting about their experiences online, or emailing about the incidents.
While there are many negative ramifications caused by cyber attacks, businesses that take proactive steps and mitigate ransomware quickly will benefit in the long run. Over half of respondents would be willing to pay more for products and services they believe to be more reliable and secure in the banking and securities industries, and over 40 percent would pay more if they believed products and services were more secure from companies in the healthcare, insurance, and retail categories.
“Consumers are clearly already hesitant about working with companies hit by cyber attacks, and they just won’t tolerate disruption as businesses figure out recovery and remediation plans after-the-fact,” said Arcserve CTO Oussama El-Hilali. “The findings represent a stark warning for all organizations given that one in four of their customers will be gone immediately upon disruption, with many more losing patience within 48 hours. Businesses must do more to ensure they’re protecting their data from cyber criminals and mitigating the chance they’ll experience extended downtime. We recommend a two-pronged approach where cyber security, backup and disaster recovery are deeply entwined.”
The survey was executed and completed by Dynata, the world’s largest first-party data and insight platform. 1,998 respondents across North America, the United Kingdom, France, and Germany completed the survey in December 2019.
Read the full report, 'Ransomware’s Stunning Impact on Consumer Loyalty and Purchasing Behavior' here.