Editorial
The Gist
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Data protection advantage. A strong cybersecurity strategy helps companies turn data protection into a competitive advantage.
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Regulatory compliance importance. Complying with regulations like GDPR and CCPA strengthens brand reputation by demonstrating responsible data handling.
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Transparency drives trust. Promoting transparent data protection policies and practices helps businesses gain consumer confidence and safeguard their brand from security breaches.
For a very long time, part of a cybersecurity strategy included using data protection technologies to protect customer and organizational data and mitigate unauthorized access and improper use of sensitive data.
The advantages of having a proper cybersecurity strategy in the event of a data breach remain obvious. But while these activities are important, organizations have started pivoting in a new direction and using data protection as a competitive advantage to establish trust between business and customer.
Amid a rise of digital threats, companies have touted slogans such as “We’re Safe” and “Your Data Is Secure.” These words have, in some way, become marketing jargon for organizations looking to provide customers with more peace of mind, but they also build a more credible reputation among competitors.
'Data Protection' Comes in all Forms
Still, this doesn’t detract from the fact that the definition of data protection remains extensive. More than this, the term “data protection” within an organizational setting often takes varying forms. It could be a marketing tactic, or it could refer to something more technical like securing customer information or maintaining regulatory compliance.
Those companies without the necessary cybersecurity strategy or data protection infrastructure are at a disadvantage compared to their competitors. Implementing the necessary systems and sharing this information on the company website isn’t enough anymore. Customers want to have more transparency, and prioritizing these needs could help improve brand authority and increase customer loyalty.
Building Brand Trust Through Data Protection
Now more than ever before, customers want to know what the companies they buy from are doing with their data. According to PwC’s “Voice of the Consumer Survey 2024,” 83% of consumers said that they now value brands that prioritize their personal data and purchase information.
This year in particular has seen multiple big-box retailers changing their data protection policies in reaction to regulatory pressures and a series of breaches.
Companies of any size have become the target of malicious threats. For instance, in May 2024, more than 560 million customer records — including order history, payment information, addresses, names and email data —- were leaked following a breach of Ticketmaster’s systems.
Another instance includes mobile network provider AT&T. It experienced a breach in January 2023, which exposed 7.6 million current customers, and it saw an additional 65.4 million former customers impacted.
The breach saw the company suffer major financial losses, including a $130 million drop in market capitalization and a decline in company stock performance in the days following the breach.
B2B Companies Need to Protect Customer Data, too
It’s not just consumer-focused companies that have fallen victim to these security breaches. In 2021, a cybersecurity breach of the Colonial Pipeline, an oil pipeline system consisting of more than 5,500 miles of pipeline, was hacked by the criminal group DarkSide. The ransomware attack affected fuel distribution across the U.S. East Coast and led to shortages and price spikes.
Non-renewables aren’t the only pocket of the energy sector targeted by hacking groups. Solar energy systems, including inverters and battery storage units, are vulnerable to digital security risks once connected to the internet. In 2024, the Dutch Authority for Digital Infrastructure (RDI) found that none of the inverters they tested met the agency’s cybersecurity standards, with some susceptible to causing serious disruption to the grid.
Brand Reputation on Line With Cybersecurity Strategy
These instances, big or small, have an impact on a company’s brand reputation. Research shows that a data breach-related instance could cost a company up to 66% of its clientele. Consumers want to know that companies are making use of high-end cybersecurity infrastructure. More than this, they want to know that companies have a contingency plan in place should a data breach occur.
Taking into account how consumer sentiment regarding cybersecurity data protection has changed over the last few years shows how much driving force these activities have in terms of upholding a company’s competitive advantage. This is especially important in a fast-changing consumer environment, where customers have more than one option to choose from.
Related Article: 6 Ways to Balance Customer Data Security and CX
Using Data Protection as a Competitive Advantage
Customer relationships require that companies take a focused interest in gaining support through compliant data practices and operational efficiencies.
Data protection, in this instance, is seen as an umbrella term and should be viewed as a way to gain a competitive advantage in the marketplace, improve customer loyalty and promote more proactive data protection policies.
How do you get better in your cybersecurity customer data protection game? Here are five ways:
Create a Clear and Transparent Data Collection Policy
A well-formed customer data collection policy is more than a framework that upholds compliance with regulatory laws. Data collection policies should take into account customer best practices and be designed to allow a business to build a relationship with customers throughout their interactions.
Knowing that a data collection policy is needed may only be the first step in a seemingly complex process. Beyond establishing policies, businesses must also account for regulatory and compliance laws, know which types of data to collect and determine how data will be collected and used, all of which should be included in the action plan.
The data protection policy is more than a website copy that boasts that customer information is protected. Many companies are already doing this, and there are instances where a brand may tout such lofty promises only to turn around and reveal that the necessary protection measures were never in place.
There are plenty of moving parts that form the foundation of a data collection policy. Being clear about the type of data you want to collect, how you will collect this data and where you will use it will help you make sure you are on the right track toward building a more transparent customer experience.
Comply With Regulatory Guidance
Any business that is collecting customer data will have a legal obligation to comply with various data protection and privacy regulations. Depending on the local jurisdiction, there are a few major regulations that dictate how much and how frequent data harvesting is allowed.
For instance, the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the United States are two robust regulatory laws that help to protect consumers and minimize potential threats against individuals and businesses.
Complying with local regulations is more than a legal obligation. In some instances, it highlights a company’s ability to handle data responsibly and demonstrates how they use these best practices to build trust with customers, stakeholders and investors.
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These legal frameworks are designed to help companies manage risks, enhance cybersecurity compliance and identify potential threats associated with data collecting, handling and storage.
More than this, data protection laws can support more effective decision-making among business leaders. By making sure resources are allocated appropriately within daily operations, these laws contribute to greater operational efficiency.
Related Article: The Data Privacy Toolkit: First Steps Toward a Privacy-Centric Future
Promote Transparent Data Practices
Build Trust and Enhance Cybersecurity Strategy
A business or organization that exhibits strong data protection and compliance could see a better competitive advantage, especially among customers who prioritize their data privacy and cautiously measure their online activities.
Making customers more aware of data collection, updates and changes to policies is part of the obligation that a brand has in upholding data compliance. If a company chooses to collect customer data, it is important to have a transparent approach that makes it possible to conduct routine audits, complete vulnerability assessments and make updates or changes to policies.
Employee Training Is Paramount
Having transparent business practices is an approach that needs to be applied throughout the entire organization, starting with employee training. Making sure that employees are well-trained and informed about data protection measures will give a brand more leverage to overcome digital vulnerabilities.
Completing regular training sessions, updating company firmware and software, and protecting systems with passwords are all part of the broader approach that will form the foundation of a company’s data protection.
Brands that want to show customers that they value their privacy will need to first make sure that their teams understand their role in protecting data and effectively communicate these efforts to customers.
Partner With Trusted Digital Providers for Data Security
Most of these protection activities are only possible with reliable technical support. From the get-go, companies should make sure they have invested in the appropriate systems to collect and store customer information.
Having the right digital partners is not a one-size-fits-all approach. There are various links in the value chain that a business will need to consider before making a final decision.
For instance, newer and smaller companies might want to hire a team of IT professionals to help build their customer data portals, while larger corporations might invest in new ventures that provide greater flexibility in using customer data to enhance the online experience.
Recognize Your Customer Data Strategy
There are multiple factors that play a role in choosing which type of digital partner to use. The most important consideration is whether the one that you choose has a reliable reputation and whether they meet the needs of your business.
Using appropriate systems allows businesses to blend personalization within their digital experiences. Creating more tailored experiences shouldn’t mean infringing on customer’s privacy or online activity. Instead, it’s important to find a balance that meets business needs and allows customers to willingly share personal information in exchange for more tailored perks.
Again, this draws to the importance of using a reliable source to collaborate with. Partnering with a trusted provider to develop these systems allows businesses to uphold legal compliance while staying competitive in a dynamic consumer market.
Invest in Effective Data Collection Strategies
Throughout all this, it’s important to remember why the business is looking to collect customer data. For starters, many companies collect data to navigate market trends or better understand customer preferences. Other times, data helps businesses evaluate customer purchasing habits and understand how people interact with various products or services.
Data collection can serve as a basis for market targeting by collecting various demographics, preferences and behaviors related to both customers and competitor markets.
Align Customer Data Collection With Customer Data Policy
Depending on what the data will be used for, brands need to decide how they will invest resources to make sure the appropriate targets are reached. For instance, a company looking to make more informed decisions regarding product development should consider how their data collecting strategies and the overarching customer data policy align with one another.
Having these mechanisms move in opposite directions can create friction and leave a lot of room for error. Data collection should serve a brand’s primary purpose, whether that’s for understanding customer behaviors, dividing the market into segments or overcoming competitor strategies.
The outcomes will speak for themselves. Data collection needs to form part of the broader business strategy. More than this, data collection is only possible through effective security implementation and investing in the right tools to help safeguard customer information.
Related Article: Protecting Enterprise Data: Advanced Malware Scanning Strategies
Innovative Approaches to Cybersecurity Strategy and Data Protection
Companies are pivoting beyond traditional data protection strategies and instead looking at how they can use these activities to improve their competitive advantage.
Breaking through the mold will help companies overcome possible cybersecurity challenges. More than this, it can help them find a balance between using data for personalized customer experiences and building greater brand loyalty.
Data protection is a key to building trust and loyalty with consumers. As more consumers begin to prioritize data privacy and as companies look to use these advantages against one another, using effective data collection throughout the business will become an important part of standing out in the crowd.
Core Questions Around Cybersecurity and Data Protection
Editor's note: Here are two important questions to ask around cybersecurity and data protection.
Why is data protection important for a company's brand reputation?
Data protection builds consumer trust. As cybersecurity threats rise, customers increasingly expect businesses to prioritize their data security. A breach can lead to significant financial losses, customer churn and a damaged reputation. Companies that demonstrate robust data protection practices improve customer loyalty and differentiate themselves.
How can companies use data protection as a competitive advantage?
Companies can implement clear data collection policies, comply with regulatory standards and promote transparency in how customer data is handled. A solid cybersecurity strategy that supports data privacy helps build trust with customers and enhances brand authority.
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