For small businesses, the most common competitive advantage is their proximity to customers, which allows them to deliver a more personalized customer service experience.
But there’s another often-overlooked source of a competitive advantage that small businesses can use to retain existing customers and attract new ones: cybersecurity compliance.
CYBERSECURITY COMPLIANCE HELPS BUILD CONSUMER TRUST
In 2018, the Center for Strategic and International Studies (CSIS) and cybersecurity company McAfee jointly published a report that estimated the annual global cost of cybercrime at approximately $600 billion. In the 2020 edition of the same report, the estimation increased to $1 trillion.
It’s no wonder then that cybersecurity is a growing concern for consumers, who now understand better than ever before how far-reaching the consequences of a single data breach can be. Especially when it affects a business that they have shared their credit card numbers and personally identifiable information (PII) with.
Acting in their own best interest, the same consumers actively avoid businesses that have been breached in the past. This causes the businesses that they avoid significant long-term negative impacts related to trust and revenue.
Fortunately for businesses that meet various controls enacted by a regulatory authority, law, or industry group to protect sensitive data, the opposite is increasingly true as well: consumers gravitate toward small businesses that take cybersecurity compliance seriously.
CYBERSECURITY COMPLIANCE IS ESSENTIAL FOR CLOSING LARGE B2B DEALS
Cybersecurity due diligence has become an integral part of large business to business (B2B) deals. Because of how fierce today’s threats are, companies need to be wary of hiring a vendor unless the vendor is able to meet their cybersecurity compliance expectations.
Those expectations can be a list of controls, such as active threat monitoring, cybersecurity awareness training, or encryption. Or they can be specific cybersecurity compliance frameworks, like the NIST Cybersecurity Framework (CSF) or ISO/IEC 27001.
Cybersecurity compliance expectations can also be tied to a specific industry. For example, businesses that would like to bid on U.S. Department of Defense contracts will soon be required to comply with the Cybersecurity Maturity Model Certification (CMMC) assessment framework, which divides cybersecurity compliance requirements into three tiers based on their complexity.
Since government contracts and large deals with established corporations can be some of the most lucrative sources of revenue for small businesses, being excluded from them due to poor cybersecurity practices is a huge disadvantage.
CYBERSECURITY COMPLIANCE CAN REDUCE COSTS
When many small business owners and decision-makers are confronted with the topic of cybersecurity compliance, they immediately start thinking about the costs. What they don’t realize is that a strong cybersecurity posture can actually significantly reduce long-term costs the same way regular dental check-ups reduce the need for large and costly dental procedures.
According to cybersecurity company Kaspersky, small businesses lose on average $108,000 per data breach incident due to direct revenue losses caused by downtime, reputational harm, and non-compliance fines imposed by regulations like the California Consumer Privacy Act (CCPA).
The CCPA is intended to enhance privacy rights and consumer protection for residents of California by giving them more control over the personal information that companies collect about them. Businesses that violate them can be fined up to $2,500 for each violation and $7,500 for each intentional violation.
Cybersecurity compliance also directly influences the cost of cybersecurity insurance premiums, which have increased upwards of 50 percent in recent years in response to growing demand. Insurers may even turn down businesses with weak cybersecurity measures since insuring them wouldn’t be a financially wise decision.
IT’S TIME TO MOVE BEYOND DAMAGE CONTROL
As you can see, there are several important reasons why small businesses need to see cybersecurity compliance as a competitive advantage—not just damage control. To get started, each business needs to consider its industry, customers, partners, employees, and data to determine which international, government-imposed, and industry-specific compliance standards to focus on.
That’s just one of many things that we would be thrilled to help you with. Reach out to us for more information on our security methods, practices, and services.