Since the Enron disaster in 2001, the utilities industry has been plagued by multiple scandals. While utility companies have the advantage of providing necessary services to the public, the competitive nature of the market means that consumers usually still have choices in which providers they pick. With smaller companies constantly emerging and with price comparison sites becoming more and more prevalent, winning customers is tougher than ever, and a strong reputation can be a key competitive advantage.

While reputation is a somewhat intangible concept, it’s safe to say that one bad incident can cause lasting damage. For example, TalkTalk, a British telecommunications company, has been struggling in terms of share price since it suffered a data breach in 2015.

The problems with a bad reputation

The loss of customers is an obvious cost of a scandal, although this can be somewhat difficult to quantify. Beyond customers that are directly impacted by a scandal, other customers might walk due to security concerns or fears of service interruptions. A company’s ability to attract new customers can also be inhibited if the public deems that company to be untrustworthy.

An immediate cost for discredited organizations is that they often need to compensate customers for loss of products or services—or offer some form of apology by way of free products and services. This can amount to steep financial losses for a company if customer complaints come in large numbers.

Just having to deal with more complaints can increase costs for a business. For NPower, one of the U.K.’s largest energy firms, the number of incoming complaints— along with the results of a 2014 survey ranking it the lowest in customer service among the top 100 brands that year—led to the hiring of 250 additional call handling staff and an extension to the company’s opening hours to address customer service issues.

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According to a survey from Populus, only 16% of the British public views the energy sector in a positive light. Since 2011, the ‘big six’ energy companies have lost about 15% of their market share as a result of customers switching to newer, smaller suppliers. While pricing certainly comes into play, there is certainly a case for negative reputations among established providers driving shifts in consumer confidence.

How reputations can be damaged

Security concerns

A breach of corporate data and assets can be one of the most damaging incidents for a company’s reputation. More often than not, customer data is compromised in a breach and this can wreak havoc for a company’s image.

The utilities industry is the second most likely to be targeted by cyber attacks after the financial sector, according to a 2016 report from Cambridge University’s Centre for Risk Studies, and the effects of a compromised system could be catastrophic.

In 2018, a vulnerability in Comcast’s website used for activating Xfinity routers was identified. The site is meant to help customers set up their home internet without going through a customer service call, but it was found that the site could be tricked into showing a customer’s home address and even a user’s Wi-Fi name and password.

Comcast remedied the issue soon after becoming aware, and while the company is still considered ‘too big to fail,’ stories like this could cause complications in an increasingly competitive broadband market.

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Throughout 2016 and 2017, Russian hackers obtained access to the U.S. electrical grid by penetrating the networks of key vendors that service power companies, claiming hundreds of victims. Homeland security officials said the hackers could have caused blackouts in a long-running campaign to gain access to U.S. electric utility control rooms.

This was a clear wake-up call for the utilities industry. Many companies that were infiltrated were likely unaware that they had even experienced breaches, since the credentials of actual employees were used to break into their networks. Hackers obtained these credentials using tactics like phishing.

As systems become more connected with increasingly mobile workforces, enterprise-grade mobile security is a key component for any utility company to keep its information, employees and customers safe from the surging range of threats targeting mobile devices.

For more on security in the utilities industry, read this article.

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Employee behavior

It’s more important than ever for companies to rely on their employees to act as brand representatives at all times, as well as train them to be digitally savvy.

All it takes is one employee caught accessing illicit content on their phone to create an all-out scandal. As the number of employees armed with mobile devices grows, so too does the potential of misuse with these devices.

Cases of employees streaming inappropriate content at work are surprisingly common. Recently, a British lawyer was filmed watching porn at work—by a lawyer in a neighboring office. The case went viral and the employee, who was a partner at the firm, was suspended.

Most companies enforce some form of content filtering policy for their desktop computers. When it comes to mobile devices, however, companies are often leaving usage unprotected and unmonitored.

Protecting your reputation from mobile risks

A mobile data policy allows admins to block dangerous categories like adult, gambling and illegal content, mitigating risks that can ultimately harm a company’s reputation. Wandera’s mobile data policy solutions are fully customizable, enabling security teams to set the right parameters to keep their users and devices safe and productive.

Are you are a security professional in the utilities industry? We’d love to hear from you.