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Shocking! Yahoo’s data breach

by Colin Shaw on September 29, 2016

How we feel affects how we behave. Understanding the connection between our feelings and our decisions is an essential foundation for creating customer loyalty and retention. If you aren’t sure this is true, then ask yourself: would I open a Yahoo email account today?

Yahoo is in the news all over the world. No longer because of their appointment of an up and coming CEO (that just happened to be female). Not because their user numbers in July were reported to have dropped 30% since the same time in 2014. Not even because Verizon is buying them for $4.8 billion, either (maybe).

Nope. It’s because 500 million of Yahoo’s account users’ names, email addresses, telephone numbers, birth dates, scrambled passwords, and security questions are in the wind. Moreover, 200 million of them are up for sale by a hacker named “Peace.” My guess is that it is anything but peaceful at Yahoo’s headquarters in Sunnyvale, CA.

Yahoo is likely the biggest hack yet:

However, the lapse in time from when the attack occurred and when the account holders were informed is alarming. The breach happened two years ago, and Yahoo didn’t know. Am I the only one that wonders what else we don’t know about the situation?

According to industry experts, today’s hackers are so advanced that it isn’t unusual for no one to detect the breach. Sometimes, you only found out when the information appears with a “For Sale” sign on it. But we don’t know if that was what the case was here; Yahoo didn’t say, citing that it might interfere with the investigation.

They did say this to users on Thursday:

Feeling Vulnerable in a Customer Experience

When it comes to Customer Experience, how we feel is a critical part of it. How customers feel about a brand affects their loyalty to it. People need to feel safe doing business with you. Many of you reading this probably had a Yahoo account, even if you don’t think you do.

How are you feeling now? That your personal contact information is safe and secure? Excited about trying to remember all the places you use that password and those security questions? Probably not.

It should surprise no one that when Econsultancy.com asked in a survey if consumers thought there are enough safeguards on their information, 87% of them said no.  That was over two years ago—ironically around the same time as the Yahoo Data breach.

Negative emotions attach themselves to the brand name in the customer’s mind. Later, when Yahoo account holders think of the brand, they will remember feeling afraid, angry and disappointed that it lost their data to hackers, where it ended up on the black market. Psychologically speaking, it becomes part of the brand and interferes with customer loyalty.

In my new book, The Intuitive Customer: 7 Imperatives For Moving Your Customer Experience To The Next Level, co-written with Professor Ryan Hamilton of Emory University, we talk about the concept of Brand Halos and how they affect your brand. Your halo is, in essence, your reputation; the amount of the “benefit of the doubt” that a customer gives you regarding your product or services. Halos form based on past performance.

So, for example, if you had a Honda in the past and it was a great car, and you know that Honda has an excellent reputation for having great cars, then you assume their latest model will be a good car.  Their halo convinces you before you see it.  They do, though, also work the other way! Just ask the customers that bought a diesel VW because of its excellent fuel efficiency ratings what they think of the Volkswagen brand. Yahoo’s new email account set up is also quiet today.

Whether Yahoo is to blame or mishandled the data is yet unknown. What is known is that about half a million account holders sat at their computers changing passwords and security questions, feeling vulnerable and angry. How this plays out over the next few weeks will reveal if Yahoo can shine up their halo enough to finish the sale to Verizon, or if it will slip down and choke the rest of the life out of a struggling brand.

What do you think? I’d be interested to hear your thoughts in the comments below.

To learn more about Halos and other compelling concepts for business, please read our latest book The Intuitive Customer: 7 Imperatives For Moving Your Customer Experience To The Next Level (Palgrave Macmillan, 2016)

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

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Colin ShawShocking! Yahoo’s data breach