Managing your bottom line is an essential component of running a successful business. Increasing revenue and decreasing expenses are critical to your company’s profitability. However, the hidden costs of cyber attacks can eat away at your bottom line. Remediation expenses and other hard and soft costs add up quickly, often outpacing a ransomware payment.
Downtime
The most obvious cost associated with any downtime is lost revenue. Whether it’s an unplanned disruption to production or a data breach, companies can quickly rack up expenses as they focus on containing the incident and recovering from it. Cyberattacks often require companies to divert resources away from normal operations and into responding to the threat. Even if an outage is short-lived, businesses still incur costs, such as lost productivity or the need to reschedule meetings and other events. Depending on the nature of the downtime, it could also impact customer satisfaction and lead to lost sales.
For these reasons, businesses must start measuring micro-downtime frequency and commit to reducing them over time. It can be done by collecting data using observability tools and setting clear KPIs for each domain. It’s also important to consolidate the myriad of tools and vendor solutions used by IT teams, as juggling different interfaces can cause confusion and delays in reporting issues. It can help reduce the number of downtimes and brownouts that go unnoticed or underreported across the organization.
Customer Dissatisfaction
Customer dissatisfaction is a significant hidden cost associated with the different types of malware. Unhappy customers can lead to negative reviews, lost sales, and decreased customer loyalty. Several tools, such as social media monitoring, online analytics, and retention rate tracking, can be used to measure customer satisfaction, an essential factor. Providing exceptional customer service is one of the best ways to reduce customer dissatisfaction and boost brand loyalty. Putting money into training your staff to offer first-rate customer service can equip them with the knowledge and skills to handle problems promptly and effectively. For example, if your business experiences an attack and your customer support team cannot respond promptly, it can cause frustration. The ability to respond quickly and accurately shows that your business values its customers and is committed to resolving issues promptly.
Unsatisfied customers may also take their business elsewhere, which can have even more costly implications for your company. About 86% of consumers are willing to pay more for better customer service. In addition, customers who feel a positive relationship with a company are more likely to make future impulsive purchases. To keep your customer base happy, offer personalized and comprehensive services that exceed their expectations. It can help increase feelings of loyalty and improve the bottom line.
Reputational Damage
If you’ve been paying attention to the news, it’s hard not to have heard about the recent ransomware attacks. These attacks wreaked havoc on companies with their threat to destroy data unless a ransom was paid. The average ransomware payment is $230,000, according to cybersecurity company Webroot. But the damage caused by these attacks extends far beyond just the financial costs. Reputational damage is a significant cost for any business. When reputation is damaged, customers and clients lose faith in the brand, which can translate into a drop in revenue.
Reputation damage can occur for various reasons, including but not limited to ethical violations, safety issues, employee or customer injuries, employee misbehavior, criminal charges, data leaks, scathing customer reviews, and more. Because of the power of social media, it’s easy for negative news to quickly go viral and cause serious harm to a company’s reputation. Despite the importance of reputational damage, many companies don’t monitor their reputation as closely as other operational and financial risks. The most common monitoring tools include customer or client feedback, computer software or IT system audits, and social media and employee monitoring.
Legal Costs
Malware is software that exploits and harms any programmable device, network, or server. It can steal or destroy data, encrypt or delete files, alter or hijack core computing functions, and monitor end-user activity. It is deployed by cyber criminals with various goals, from monetary theft to spying and discrediting competitors or adversaries. The most notorious malware of the 21st century is ransomware, which encrypts file systems and displays a message demanding online payment in exchange for a decryption key. Ransomware attacks have hit businesses and public institutions worldwide, crippling them with costly downtime and requiring a refocus on customer services, such as credit monitoring and identity protection, which can add up to significant monetary costs.
Many of the hidden costs associated with a ransomware attack can be tied to the time it takes for a company to detect an attack and respond. For example, a recent IBM study found that participants who didn’t involve law enforcement in a ransomware attack experienced breach lifecycles that were 33 days longer on average than those of studied organizations that did involve law enforcement. In the case of a significant attack that exposes sensitive data, a company may also face fines for failing to meet compliance standards like GDPR or HIPAA. It imposes additional monetary obligations that can be difficult to calculate.