When you think of the core focus of every company, it is almost always centered on growing top-line revenue. Revenue growth can be achieved by winning new customers and accounts – and it can also be achieved by incrementally growing current accounts. In addition to growing revenue, companies must also focus on keeping customer attrition rates as low as possible – in other words, growing customer loyalty.
We hear the term constantly throughout our workday, but what exactly defines customer loyalty? Ellen Goodwright, author of the Customer Service Basics blog, states, “Customer loyalty is when an organization receives the ultimate reward for the way it interacts with its customers. Loyal customers buy more, buy longer and tell more people - that's true customer loyalty.”
With this definition in mind, thinking about the way your company interacts with its customers must be a top priority in order to sustain growth. Seemingly mundane tasks such as answering phone calls and resolving billing issues to more high-level activities including on-time delivery of products/services and contract negotiations can play an important role in the way the customer perceives your business. Just as important as the discrete factors are the intangibles such as reputation and trustworthiness. People want to work with companies that they trust, and few things have a more negative impact on trust than news or rumors of a security breach.
From credit applications to billing receipts, chances are your company has access to sensitive, confidential customer information, and keeping it secure is critical. More than just a moral obligation or a sense of “doing the right thing,” leaking confidential information that could lead to identity theft is a business killer. Consider these facts from an annual study conducted by the Ponemon Institute in 2008:
- Breaches are costly events for an organization; the average total cost per reporting company was more than $6.6 million per breach (up from $6.3 million in 2007 and $4.7 million in 2006) and ranged from $613,000 to almost $32 million.
- Cost of lost business continues to carry the highest impact: The cost of lost business continued to be the most costly effect of a breach averaging $4.59 million or $139 per record compromised. Lost business now accounts for 69 percent of data breach costs, up from 65 percent in 2007, compared to 54 percent in the 2006 study.
What’s more, according to CIO magazine, after a breach, 20% of customers sever all ties with the company, 40% say they consider doing the same, and another 5% will be hiring lawyers. Could your business survive if it lost one out of every five customers?
With these sobering statistics in mind, savvy business owners recognize that just one security breach very well could be the demise of an entire business. Therefore, they are taking preventative measures to avoid such an incidence. A simple step such as limiting personnel’s access to confidential information is one way to reduce the risk of such information getting into the wrong hands and potentially becoming compromised.
Another smart preventative measure is to completely destroy all records that contain confidential information as soon as they are no longer needed for record-keeping or compliance purposes. After all, a lesser amount of confidential paperwork lying around the workplace translates to fewer opportunities for a breach. Instead of purchasing a shredder and hoping it is used diligently, some companies choose to partner with an outsourced document shredding solution. In this partnership, the onus of collecting and destroying documents falls to the outsourced provider. Using this model, your customer, and their loyalty, are as protected as your company.