Online brand impersonation is an insidious threat compared to more straightforward attacks. Ransomware, for example, is simply extortion. A cybercriminal encrypts your data, holds it hostage, and demands payment in exchange for encryption keys. The consequences of the attack are either the loss of data or the cost of the ransom (and associated downtime).

Online brand impersonation, on the other hand, hijacks the brand awareness and brand integrity of a company to dupe trusting customers into downloading malware or divulging sensitive information. It preys upon the trusted relationship between the company and customer, and as a result, erodes that trust. The reputation of a brand and its connection with its customers underpins many aspects of a flourishing company. Take it away, and you will find areas impacted that you did not expect.

In part one of this three-part blog series, we looked at the financial impact of online brand impersonation. For our second part, we will explore specifically how it disrupts customer acquisition efforts, including marketing and public relations, and increases customer abandonment.

Experiences Determine Brand Integrity — and Integrity is Everything

Companies acquire new and retain repeat customers by delivering a valuable service at a reasonable price as part of a satisfactory experience. Execute on value, price, and experience enough times, and the company will achieve positive brand integrity in the market. This is critical to both retaining the customers you have and acquiring new ones. 

According to data from PwC, 87% of customers will take their business to a competitor if they do not trust a company to handle their data responsibly. Further, 63% of customers targeted by a website spoof will hold the brand, not the fraudster, responsible. Finally, 81% of consumers need to trust a brand to do what is right in order to remain loyal to it.

This paints a stark picture. Trust is everything. If it is lost, customers will be lost with it.

Online Brand Impersonation Impedes Customer Acquisition

Once a customer churns, it is very difficult and expensive to replace them, and business owners will find their efforts to acquire new customers hampered by their damaged reputation. It is five-times more expensive to acquire a new customer than retain an existing one under normal circumstances. That ratio could widen as a company’s reputation continues to decline.

Let’s look at some of the impact of online brand impersonation on customer acquisition efforts as well as some reactionary costs:

• Marketing Becomes Less Effective: Like direct sales, the effectiveness of marketing relies on the willingness of the audience to engage with marketing content. Without a strong reputation, the cost-per-lead will increase as key metrics like open rates, click rates, and form submits are curbed.
• Public Relations Campaign Expenses: To counteract the reputational damage caused by online brand impersonation, you may need to launch a public relations campaign. The campaign could focus on enhanced brand protection efforts, strategies to avoid future phishing, and reaffirming your commitment to the customer. These campaigns require significant resources as well as a time investment from the team.
• Increased Effort Needed from Sales: A declining reputation makes it harder for the sales team to book meetings and initiate conversations with new prospects. Leads may be less likely to reply or ultimately choose a competitor at the end of the evaluation process.
• Increased Customer Service Workloads: In the wake of online brand impersonation attacks, customer service teams will face an influx of support requests from customers who were targeted in the campaign. This requires additional customer service support resources as well as placing added strain on the existing team.
• Opportunity Costs: Every dollar you spend on a public relations campaign to repair your brand image is a dollar not spent on warming leads. Every extra minute your sales team needs to remain on the phone allots less time for the next call.

WHAT YOU SHOULD DO NEXT

The damage caused by online brand impersonation makes everything else in the business harder to accomplish. Leads cost more to acquire and more still to convert. Your teams are trying to repair the business instead of grow it. There’s no straight path forward once enough customers have been targeted.

Learn more about how online brand impersonation can impact your business in our white paper, The Damaging Effects of Online Impersonation on Your Brand’s Identity.