Or Or: TalkTalk, you're on the right track! Don't fail now.
We all get hacked. Hacking is a modern crime that is flourishing. As CNN reported back in September 2014, this is the Age of Hacks. Hacking is something that will affect 1 in 2 of us in our lifetime. With credit card details worth an estimated $102 per card on the dark markets, this is the new crime d’jour – and one that offers a distinct set of challenges for brands.
The True Costs of Hacking
The direct costs are often substantial but hard to define exactly due to lack of direct consequences, in many cases. Blue Coat created this informative infographic detailing several big brand examples. Classic costs include, lost business time, internal costs, security investigations, new IT systems, etc. What’s often left out is the brand impact. In many cases, this is substantial, because hacking is unlike any other brand threat.
Why is Hacking such a Unique Brand Crisis?
As the Sony Pictures CEO himself succinctly said in a WSJ interview “You can’t be caught in the headlights doing nothing.” The hacking of Sony Pictures is a case where maximum damage was inflicted. The hackers didn’t just steal data, they also destroyed the internal systems as they left. Sony’s own email systems were apparently unusable. How would you get out a message that millions of your consumers would trust with no database and organized by phone?
With a string of high-profile cases behind us, we see hacking presents 5 unique challenges:
- You do not control information flow (hackers often announce their crime and are active protagonists)
- Time is of paramount importance (for various reasons – legislated duties, use of data, and the other factors here…)
- Saying nothing, is NOT the best response (which goes against traditional crisis management advice)
- The problem is not yours alone (your customers could experience worse repercussions than you do)
- This is a hot trend: which means media WILL sensationalize it
A Recent Case: TalkTalk
TalkTalk is a UK telecommunications brand with 4 million customers (about 6% market share), who announced they were hacked on Thursday 23rd October. Now, 5 days later we know:
- Data was not encrypted to standards expected
- Credit card and personal data stored together (not to security standards)
- Old customer data was not removed (in breach of UK law)
- Was third (successful) attack on TalkTalk data in one year
- Direct communications to customers appears to have been sparse (advice on phishing scams only appeared on their site on the following Monday afternoon).
The brand impact:
- National media picked this story up immediately – including feature expose by The Daily Mail, a well-known sensationalizer
- Customers have reported TalkTalk phishing attempts
- Share price dropped 23%
TalkTalk’s young brand (formed 2003) is a low-cost challenger and of course exists in a high-churn, highly competitive sector.
For low-cost brands, especially telecommunications, the perceived capability is that they will provide at minimum the service required – making calls, watching TV, etc. Plus being new means it lacks a solid brand reputation and track record. This compounds the impact, especially in relation to perceived quality – the pumping heart of every brand.
As Ryanair found out when three jets ran out of fuel, consumers do not equate low-cost with ‘I value my life less’. The associations of trust, confidence and well-being are essential attributes. Hit these, and you’re running on empty.
Turning it around – TalkTalk taking the right course
From the raft of recent high-value brand hacks, TalkTalk stand out in their most recent action.
Faced with estimates of 75 million GBP (115 mil USD) impact on their brand, TalkTalk have picked up their feet. As sponsors of The X Factor, TalkTalk dropped their idents on the shows for the 20th & 21st October and redirected a proportion of their £90 million-plus ad spend on promoting new content aimed at reassuring existing customers.
This shows a much better response is taking grip in their boardroom than any big brand so far.
So what's next?
It's early days, but here’s my own Super-6 hit-list:
- Brand Impact Audit (associations and positivity / strength): what's the emotional impact, market wide and segment based. How's it changed? Identify the brand gaps.
- Identify exactly which customers were affected and ring-fence these as a unique segment. Create a team dedicated to improving the experience for these guys.
- Turn the hack into your advantage. Surviving adversity breeds strength. This CAN be used as a brand leverage (if corrective actions are taken). Create an open pitch for agencies with the simple question: ‘Show us why we’re better now.’ It can be done.
- Integrated communications campaign targeted on building on brand values identified from audit
- Improve existing customer experience (they’re your brand advocates and you really need them now!)
- Redevelop brand identity and touch-points (both to limit negative recall and support new brand strategy)
Let's see what TalkTalk do next.
Hacking, it’s here to stay – and it’s gonna get bigger. If you don’t have at least some hacking planning or scenarios in place, well, you’re running the gauntlet. There's plenty of big brands to learn from.
Brant Emery is an independent brand strategist.