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Study finds brand reputation costs $200,000 to repair, recommends better solutions

In a competitive environment, successful businesses are built on more than just efficiency and product or service quality. Having the trust of customers and partners can yield higher profits, and a brand reputation plays a key role in establishing that trust. The loss of consumer confidence in a business often leads to lower profits, and sometimes to bankruptcy.

Over half (57%) of companies admit that the information security incidents they experienced in the last year had a negative impact on their reputation. The average cost incurred per incident by small and medium-sized businesses was more than $8,000, while the damage to enterprises exceeded $200,000. These were the findings of a joint study  by Kaspersky Lab and B2B International.

Kaspersky

In a competitive environment, successful businesses are built on more than just efficiency and product or service quality. Having the trust of customers and partners can yield higher profits, and a brand reputation plays a key role in establishing that trust. The loss of consumer confidence in a business often leads to lower profits, and sometimes to bankruptcy.

In a recent study, Kaspersky Lab found that every second company affected by a data leak as a result of an information security incident suffered reputational damage. The average cost of brand damage caused by a single incident was approximately $8,000 for small and medium-sized businesses, and $200,000 for enterprises. Reputational damage depends directly on whether or not the incident becomes public knowledge.

Cost of security2
Cost of security1

Twenty-two percent of respondents stated that information about an incident at their company had leaked to the media and been made public. The extent of reputational damage can be measured by the amount a company has to spend to restore its image. Every fourth company (24%) was forced to seek assistance from external PR consultants.

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Interestingly, over the last three years, businesses have begun to pay more attention to a positive reputation. Compared to 2013, the number of those turning to third-party communication consultants for help has increased by more than 5%.

“It doesn’t matter how big or small your company is – a damaged reputation can harm any business equally,” said Konstantin Voronkov, head of endpoint product management, Kaspersky Lab. “In these circumstances, it is important to take all possible measures to ensure information security. Complex multi-tier protection of every element of the corporate IT infrastructure will help safeguard the company from both information leaks caused internally and hackers penetrating the network.”

To provide multi-level information security, Kaspersky Lab offers solutions and services for every element of the corporate infrastructure. It includes integrated solutions such as Kaspersky Endpoint Security and Kaspersky Small Office Security, and specialized solutions such as Kaspersky Security for Mobile, Kaspersky Fraud Prevention, and Kaspersky Security for Virtualization, while extended support services can make protection even more robust.

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