Just a day after I talked about how it takes sustained failures for consumers to leave a company and go to a competitor, we have an example where switching isn’t really an option.
Over at Dark Reading we learn that Phizer has suffered it’s third employee privacy breach in a row.
At least they’re doing the “right” thing by involving law enforcement and offering credit monitoring. I suspect, since these made the press, they’re also improving security.
That said, you have to feel for the employees who don’t have much of a choice to go anywhere “more” secure.
Actually, neither do you.
The last time my info was breached was at the student healthcare center at the University of Colorado. My SSN was stolen out of old records.
How about you? I suspect every one of you has personal data sitting around old healthcare providers, never mind financial institutions, retail stores, government databases, old utilities providers, and subscriptions to “those” services under fake names, still billed to your real credit card.
You no longer have a relationship with these providers (or one you can’t sever), yet they still represent a real risk to your security.
Market forces can’t fix this one.
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4 Replies to “Infinite Switching Costs: When Market Forces Fail”
We originally talked about this a few weeks ago.
I need to go do a post on how we learned the wrong lessons from Egghead.com and TJX. A lot of material to work with here…
Good thought! There’s some other cases, as I blogged in Why consumers don’‘t flee.
Adam
While I agree that there are several situations where you “can’‘t switch”, and in many cases there are more “soft costs” in switching than the actual costs related to a breach, I don’‘t believe it’s always the case.
Just as people will switch couriers or airlines after a couple of minor screw-ups or even one big one, I think it’s a good bet that unless customer service and perceived value are top notch, a security incident can be just as good a reason to switch suppliers as any other. I’‘m on the verge of switching one of my hosting services, and a breach would precipitate a move pretty quickly.
And there’s a difference between actual security and perceived security that will influence a decision to switch. Did Apple waste its money with its witty TV ads poking Microsoft in the eye about their security? If Apple had the same market share, they might be just as big a target as MS.
However, I absolutely agree that most of us have legacy information lying around in places we don’‘t even know about. Not much we can do about it but keep an eye on the breach tickers to see if we recognize anything (and maybe teach our families not to cough up personal info so easily).