How Data Breaches Affect Your Brand Value

Blog Post created by ckirsch on Apr 19, 2012

A company’s reputation, represented by its brand, can take a huge hit in a data breach, but it’s also one of the hardest things to calculate in hard dollars. Imagine that all buildings of the Coca-Cola company burn down today. Someone is offering you to buy the rights to use the brand Coca-Cola in the future to sell beverages. What would this right be worth to you? Although the entire enterprise has ceased to exist, the brand still has a certain value.


Many companies invest a lot of money for advertising, especially when products are generic, for example bank accounts. Unless your best buddy works as a customer representative in one of the banks, your perception of the company and your trust relationship with the brand are probably the biggest factors in making a decision.


What happens when the trusted relationship to “your brand” is damaged by a data breach? As a consumer, your privacy has been violated when your online bookshop inadvertently publishes your purchasing history of the past three years. Maybe you even have to cancel your credit card. If the competitor’s product is virtually identical with the one you’re using now, the emotional decision is simple: You’re switching. This has direct impact on the revenue of the organization that made the error.


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