IAPP - Trust is Terrible Thing to Waste
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Transcript of IAPP - Trust is Terrible Thing to Waste
TRUST IS A TERRIBLE THING TO WASTE
How to Use Communications to Protect Reputation And Advance Privacy Objectives
The Panel
Joe CarberryPresident, Western RegionThe MS&L Group
Rosetta JonesHead of Issues ManagementVisa Inc.
Dave SteerDirector of MarketingCommon Sense Media
John BerardPrincipalCredible Context
I. THE STATE OF TRUST
John Berard, Credible Context
A formula for success
Security + Privacy + Performance = Trust
What the data say
We spend a lot on security
Businesses are substantially increasing their expenditure on security software, despite the economic slowdown.
Gartner (2008)
Finding #3. Yet far fewer executives areactually “cutting security back”. And amongthe half or less that are taking action, mostare taking the least dramatic response.
Global State of Information Security Survey(PwC, CIO & CSO Magazines 2010)
We talk a lot about the money we spend.
Google “IT security spending” and you get 47 million results.
Bing it and you get 36 million results
We spend a lot on product performance.
Federal research & development totaled $150 billion in 2007.
$225 billion in annual corporate research & development spending in the U.S.
Business Roundtable 2010 CEO Survey
About 200,000 new products introduced globally each year.
We talk a lot about the money we spend.
Bing “new product research and development” and you get 2.2 million results
Google it and you get 73 million results
We spend a lot on privacy.
Significant investment in privacy
Technology Compliance monitoring Data collection & handling procedures Training
We DON’T talk a lot about the money we spend.
We allow our story to be told by failures.
Since 2005, the Privacy Rights Clearinghouse says that 350 million individual records have been breached.
In the last year, according to the Identity Theft Resource Center, 6.3 million records were affected in 218 breaches.
The business effect of misuse
It costs $6.6 million on average when an organization suffers a data breach, and more than $200 per compromised record, according to a survey conducted by the Ponemon Institute.
Just as with security and performance, we can get a return on our privacy investment.
The nature of online privacy
Control, not anonymity
Reflected in the percentages About half of us Google ourselves
That’s twice what it was a few years ago But only about 3 in 100 do it regularly
60 percent of us are not worried about the volume of online information about us
More than half of us Google others Pew Internet &
American Life Project
Microsoft’s Boyd put it this way:
“When they feel as though control has been taken away from then or when they lack the control they need to do the right thing, they scream privacy foul.”
Witness: Facebook, Google
Consumer’s view
We care greatly about privacy We don’t do much about it
Pew, too
This is the opening for communications More than managing risk More than damage control
Adding an accelerant to the formula for success Security + Privacy + Performance = Trust
Public value of the investment
Communications is the key to unlocking a market return on the investment already
made.
The first question to ask is:Who are you?
II. WHEN TRUST IS BROKEN
Joe Carberry, The MS&L Group
What we’re talking about
How should I respond if/when data is misused or stolen?
1. Current Public Environment
2. Managing Through Crisis
3. Case Study Exercise
The Environment
What we’re up against…
The Risk
• Electronic data widespread in every industry
• Hundreds of publicly reported breaches; many more not disclosed
• The number of breaches continues to increase year-over-year
• Only 36% of C-suite confident they won’t suffer breach *
• Cost of breach now $6.6 million *
As more and more business is conducted and recorded via electronic means, risks related to data and privacy will
increase. *Ponemon Institute
The Point?
Data misuse/theft not question of “if” but “when”
Crises often happen in full view, in real time – with significant impact
More at risk in a data breach than just data
Bottom Line
“A promise must never
be broken.”- Alexander Hamilton
Managing a Breach of Trust
What Makes a Crisis?
Can be triggered by various kinds of events: Operational failures Malfeasance Human error Natural disasters Business set-backs Competitor or third-party attacks
An issue becomes a “crisis” when the organization’s business prospects are threatened in the eyes of its stakeholders
You do not define “crisis” – someone else does Crisis rule #1: somebody always find out. Always.
A Crisis Subtracts Value
Crises undermine stakeholder confidence in an organization:
Short- and long-term growth potential
Sustainable return on capital
Quality (focus) of management
Ability to manage risk to the business
Source: Adapted from McKinsey
Managing Risk
Legal Risk Patchwork quilt of state and federal regulations Litigation exposure
Protection: Sound legal counsel
Operational Risk Validate and comply with industry standards (i.e., PCI DSS) Work with appropriate vendors, technology
Protection: Ongoing diligence, best practices
Reputational Risk Reputation impacts business (customers, employees, suppliers, investors,
etc.) Reputational risk often overlooked
Protection: Preparation, established crisis protocols*Ponemon Institute
** Harris Interactive Poll
Who Cares?43
Local Community
Policymakers
Investors
Employees
Customers
SalesChannel
Supply Chain
Organization
On which stakeholders do you rely for success? What do they think?
What Can You Do?
1. Be Prepared Success proportionate preparation Activate crisis response at first sign of exposure
2. Move Quickly Early and honest communication Someone else shaping news robs you of control
3. Take Action Work to resolve underlying issue People perceive data as “theirs”, not the company’s -- demonstrate stewardship Individual should remain the “north star”
4. Be Responsible Facing fear and suspicion – respond with transparency and responsibility Consumers will forgive mistakes, but failure to act responsibly.
Keep in Mind
Taking Responsibility
is not the same as
Taking the Blame
The Message
What stakeholders generally want to hear:
1. You’ve stopped the bleeding Make sure the problem is no longer occurring.
2. You’re making amends Take steps to address the impact among affected parties (not the same as admitting guilt).
3. It’ll never happen again Take steps to ensure similar issues don’t happen in the future.
Crisis Protocol
Stage 0: Preparation
• Risk Assessment
• Early Warning System
• Crisis/Situation Protocol
• Monitoring (especially digital)
Objective: Prepare for Action
Stage 1: Crisis Breaks
• Confirm viability of issue, pertinent details
• Assemble a Crisis Response Team
• Put in place tracking tools
Objective: Assessment & Strategy
Stage 2: Rapid Response
• Establish “War Room”
• Identify impacted stakeholders and expectations
• Disseminate info to stakeholders quickly, frequently
• Correct inaccuracies quickly
• Manage digital impact – address contagion
Objective: Take Control
Stage 3: Ongoing Crisis
• Story will evolve
• Plan for additional challenges– New information– Critics
• Catalog business remediation steps
• Countermeasures
Objective: Focus on Solutions
Stage 4: Post-Crisis
• Understand impact on stakeholders
• Explore business changes related to situation
• Examine tactics to rebuild reputation
• Conduct debrief; identify areas for improvement
Objective: Rebuild
Case Study Exercise
The Environment
Trust of large corporations is low
Security is pervasive issue in news media
Lots of online chatter about data breaches
Half of consumers cite privacy/security as a top concern
Legislators eager to protect consumers
The Situation
XYZ.Com is a major online retailer
The company has experienced a data breach Tens of millions of accounts; three years Payment information stored in violation of PCI standards Customers’ names, card numbers and expiry dates involved
Forensic investigation underway; external auditors
US Secret Service investigating
Card companies are aware; spotting fraud patterns
Stakeholders
Shareholders
Policymakers
Customers
Employees
Financial Institutions
Suppliers
Online Community
Law Enforcement
XYZ
Your Challenge
Competing stakeholder needs US Secret Service requesting delay in public disclosure Financial institutions want all available information, ASAP Federal legislators have called for immediate disclosure of all breaches Polling data show consumers want disclosure, but less likely to do
business with breached organization 30 state statutes require immediate disclosure to impacted consumers
High risk associated with disclosure Potential for brand damage with disclosure Litigation risk of disclosing Broad consumer disclosure drives customer services costs – at XYZ and
associated parties (banks)
The Wall Street Journal calls; they have the story...
What do you do?
Your Response
Who is involved? Who is most impacted? Who should be at the table internally? What do you do first? Do you disclose publicly? When and
how? What should you say? What business changes do you
recommend to management? What can you do to restore trust?
Remember…
Misuse/theft of data creates risk Breach reduces trust Lower trust impacts brand/reputation Tarnished brand/reputation harms business
Crisis response should be well planned, aligned
This is not about “spin”
Rahm Emanuel…
“You don’t ever want a crisis to go
to waste.”
QUESTIONS?
BREAK
III. MAKING YOUR CASE
Rosetta Jones, Visa Inc.
What is Visa?
Global payments technology company
Transaction-processing network that connects cardholders, merchants and financial institutions
Credit card issuer Lender Exposed to
consumer credit risk
What We Are What We Are Not
Payments technology company that helps power the global economy.
Statistical Overview
Visa Inc. is the world’s largest retail electronic payments network, with more than $4.4 trillion transacted on our payment products over the four quarters ended Dec. 31, 2009.
Visa Confidential
Statistical data in U.S. dollars; ATMs, financial institutions and cards based on four quarters ended Sept. 30, 2009.Excludes Visa Europe, unless otherwise noted*Based on payments volume, total volume, number of transactions and number of cards in circulation. Figures are rounded.** Includes payments and cash transactions.*** As reported by client financial institutions and therefore may be subject to change; includes merchant outlets and ATMs in the Visa Europe territory.**** Includes payments and cash transactions.
Visa Inc. Operates
the world’s largest retail
electronic payments network*
1.8B
16,100
$2.8T
62B
$4.4T
1.6M
*
Payment Security = Data Privacy Cash Perceived Safest at POS Privacy/no personal information cited as leading reason
69
3.7
7.0
6.2
6.8
7.5
9.1
3.9
6.7
6.7
6.9
7.0
7.4
9.1
Mobile Phone
Debit - Signature
Debit - PIN
Personal Check
Credit Card
Pre-Paid Card
Cash
USA
Canada
I’m going to read you some ways you can pay for things at a store and please tell me how safe you think each form of payment is on a scale from 1 to 10 where 1 is not at all safe and 10 is very safe…
Even those very comfortable with emerging technology only give mobile phones a score of 4.2.
Integrating Security….
Print advertising
Integrating Security….
Brand advertising
Integrating Security….
Client Marketing
Integrating Security….
Corporate Social Responsibility
Debit Breach Response
Visa debit is fastest growing product
An integrated response program that included advertising, PR, pre and post campaign tracking, and data analysis
“Security breaks could curtail debit card use….”March 13, 2006
Security is Visa Asset
By a large margin more cardholders view Visa as a part of the solution on the issue of fraud than believe it is part of the problem.
75
80% 80% 80% 77%70%
8% 8% 9% 7% 12%43%
34% 35%29% 29%
+72 +72 +71 +70+58
CH Payment Protections
Preventing Card Fraud
Financial Privacy Security Innovation On-Line Safety
Thinking specifically about Visa, from the same list of issues please tell me whether you approve or disapprove of the job Visa is doing to handle that issue…Highlighted Data Slides
Part of the solution69%
Part of the problem19%
DK/refused12%
Visa Job Approval
Total Approve Total Disapprove Strongly Approve Net Approve
Top 10 9 List
Listen. Ask questions of key internal influencers about fears, opportunities, internal product development.
Get smart. Know who’s saying what about you outside the company and the vulnerabilities inside the company.
Start with the bottom-line; demonstrate growth opportunity
or barrier to growth that can/should be addressed.
Use reason, not passion. Only the emotion will be heard.
Be the voice of the customer.
Make it objective -- DATA, DATA, DATA.
Bring the company along.
Use the experience of the dead bodies that have forged the privacy path before you.
All else fails, fear works
123456789
IV. BUILDING TRUST
Dave Steer, Common Sense Media
What we’re talking about
How do I market trust and privacy?
1. Why privacy is important to marketers
2. What you can do to make trust and privacy a differentiator
Why is trust so important?
First, a question…
WHAT ARE THEY DOING TO BE MOST TRUSTED IN PRIVACY?
The top 11 most trusted companies for privacy
eBay
Verizon
US Postal Service
Intuit
IBM
Nationwide
USAA
WebMD
Proctor & Gamble
American Express
Hewlett PackardSource: TRUSTe/Ponemon 2009
Sometimes there is tension between marketing and privacy people
“I just want to be able to better target our message to the right consumer”
“This will make for a better customer experience since they’ll only see what’s important to them”
“Telling them about our policies is a distraction. It should be about our product benefits.”
But trust is vital for marketers.
Trust = Brand Advantage
Privacy creates an opportunity for a trusted relationship with consumers which enables companies to differentiate their brands
“The Great Trust Offensive”
“…trust is the number one driver of any brand at the most fundamental level.
We buy what we trust and keep buying; familiarity and trust are big, big drivers of loyalty and brand value.”
Andy Bates, CEO, Interbrand
But with privacy, it’s complicated
Which is why most companies play defense
“I can’t help noticing that more and more technology companies are exposing people’s information publicly and then backpedaling a few weeks out.”
danah boyd, Harvard Berkman Center
Building trust
Brands focus on building credibility
The Credibility Lifecycle
Source: Stanford, B.J. Fogg, 2002
A ‘trust lens’ of messaging & programs
Source: Stanford, B.J. Fogg, 2002
Support: ‘Being there’ when something goes wrong.
Reassurance: Show the protections that are in place, the company, what others say, etc.
Education: Enable people to protect themselves, show what you are doing
89
So, how can you build trust?
1. LISTEN TO your customers and embrace two-way communication
The proposed Facebook privacy policy received thousands of comments
2. Have a clear, compelling message
Start by answering these questions… Who is the target audience? What is your single key message? What is the benefit of your privacy program? Why should they care? What are the barriers to them understanding
your message
The toughest part is balancing simplicity with
transparency
3. BUILD privacy messaging into the EXPERIENCE
Ads & PR & WOM
Home page
Registration
Transaction
Post transaction
Ongoing loyalty
A typical customer experience
What privacy questions will they ask?When will they ask?
How can you reassure, support, and educate?
4. Educate, educate, educate About safe, responsible BEHAVIOR About safe uses of your PRODUCT
4. Safe, responsible behaviors…
4. PRODUCT safety
5. Tell people what you’re doing to protect them
Summing it up
1. Listen to your customers – and embrace 2-way communication
2. Develop a clear, compelling message3. Build privacy messaging and support
into the brand experience4. Educate, educate, educate5. Tell them how you are protecting them
Remember
Trust = Brand AdvantagePrivacy creates an opportunity for a trusted relationship with consumers which enables companies to differentiate their brands
V. PUTTING IT ALL TOGETHER
John Berard, Credible Context
Bringing it all together
Security + Privacy + Performance = TrustTrust = Brand Advantage
THANK YOU.
The Panel
Joe CarberryPresidentWestern U.S. [email protected]
Rosetta JonesHead of Issues ManagementVisa [email protected]
Dave SteerDirector of MarketingCommon Sense Media415.845.5110dsteer@commonsensemedia.orgwww.steermarketing.netwww.twitter.com/steerdave
John BerardPrincipleCredible [email protected]