It is not surprising that profits have halved in TALKTALK following the cyber attack in October 2015
TALKTALK has lost 101,000 subscribers in this third quarter alone, even with a turnover of £1.83 Billion and 2.4% growth it may be able to ride the impact but never the less its highlights the impact of cyber to business.
This matters because the cost of acquiring customers for companies is 10 to 20 times greater or more with their sales and marketing expenditure than retaining existing customers with occasional incentives or just general good service availability. The loss of a customer is a big deal as it represents not just lost future revenue but in the case of a cyber-attack it is the lost brand reputation and a potentially commercial fatal blow.
This issue is that even with the extra spend that a company would need to recover and win back customers, this becomes three to five times harder as the "cat is out the bag" in terms of the need to repair perception to the brand regardless if you have an improved the security and internal operating disciplines. The impact also spreads across to other company sub-brands that the company may have and onto the sponsorships that are associated with the brand, in the case of TALKTALK and Big Brother and The X Factor.
Customers memories may be fickle and in time TALKTALK will recover subscribers but in the stakes of highly competitive telecoms market TALKTALK may have dodge the "big one" this time but this is a symptom and a bigger threat that is increasingly going to create more risks in business for many organisations.