Insights

Marketers Need to Push CIOs to Protect Customer Data

I have been a marketing person multiple times in my career. However, to be honest, I have struggled to sell my marketing brethren on the value of investing in customer data, including protecting the sensitive data contained within it. And this has not been for a lack of great reasons from my CIO friends.

Stephen Landry, CIO of Seton Hall University:
“Information security is an essential part of customer experience, as Target now knows.”

David Chou, CIO of Childrens Mercy Hospital:
“Once the trust is gone, forget about all of the digital and innovative experiences you have put forth.”

Isaac Sacolick, former CIO of Greenwich Associates:
“You can compete on overall customer experience, innovation, performance, service, design – and a big yes to security and trust.”

Cynthia Stoddard, CIO of Adobe:
“Data is the new currency for organizations driving insights, customer engagement, and ultimately, financials.”

My question has been, how do I relay these great arguments in the language of marketing? The answer became obvious recently as I was teaching a marketing class. During a discussion about David A. Aaker’s "Managing Brand Equity", one my students asked about United Airlines and if this PR disaster could reduce the value of a firm’s brand. Of course, the answer is yes! So, I asked the class to consider, what about a hack that led to the loss of customer data? I heard another yes here.

What is brand equity?

“Brand equity is a set of brand assets and liabilities linked to a brand, its name and symbol that add or subtract from the value provided by a product or service to a firm and/or to a firm’s customers.” ("Managing Brand Equity", Dave Aaker, page 19)

The elements that drive brand equity on the asset or liability side of the equation include:

  • Brand loyalty – are existing customers satisfied with the brand?
  • Brand awareness – are customers familiar in a positive way with the brand?
  • Quality perception – how do customers perceive the overall quality of the brand?
  • Brand association – what values do customers associate with the brand?

How would a customer information loss impact brand equity?

We would all consider a major loss of customer data as a major business disaster. Aaker covers business disasters under the topic of brand associations saying that a disaster affects image, and thus, brand equity.

Aaker says that the best approach is for brand managers to ensure that a disaster is avoided; where one does occur, detect the disaster early and do something about it before it blows up. Aaker goes even further saying that the remedy should be as convincing as possible.

This is clearly the tactic taken now by Target. When asked a few weeks ago about the elephant in the room for digital disruption, digital trust, Target’s CIO said, “We have to prove to our customers every day that their data is secure, it can never leave us again.” Another major loss of customer data would have disastrous consequences for the Target brand.

With 10 percent of revenues spent on marketing, how much of a hit can brands take before this investment becomes a wash? I would suggest that brand managers can no longer allow their organizations to plead ignorance to the possibility that customers will walk or stay away from a failure to protect customer data.

Financial penalties for failure to comply can erode the value achieved by brand investment. Should a portion of the marketing budget be put into customer data protection programs? Personally, I think the answer should be yes here, too.

Parting thoughts

It is time for marketing to provide better cover for CIOs trying to invest in protecting customer data. A sensitive data loss means losing brand equity; this is the justification that can meet any CFO in cost cutting mode.

Further reading

Article written by Myles Suer
Image credit by Getty Images, Corbis, Larry Williams
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