As a follow-up to a blog that was posted a few days ago, we decided to go back into the field to measure Equifax’s reputation among the US general public. In the wake of the data breach and subsequent events, what we have found is that Equifax’s reputation has plummeted. In February 2017, Equifax’s reputation was in the mid-average range at 66.5. Based on the most recent US RepTrak® study wave, Equifax’s reputation fell precipitously to a score of 52.5, putting it in the weak to vulnerable range. In credit bureau parlance, that’s equivalent to having a sub-prime reputation. (Related blog: The Equifax Data Privacy Crisis is a Major Reputation Black-Eye)
Equifax’s pre- and post-Crisis reputation
Why did Equifax’s reputation decline so much?
Consistent with the overall decline in reputation (as a measure of the emotional connection associated with Equifax), the organization also experienced a significant drop on six out of the seven rational dimensions of reputation. In particular, Equifax was negatively impacted on the dimensions of Products/Services, Citizenship, and Governance, which are considered as being highly important in representing over 50% of the total weight of reputation for a financial services company. In addition, Equifax was majorly impacted on the merits of Leadership, Innovation and Financial Performance. Perceptions of Equifax’s Workplace was the only facet on reputation that did not significantly decline – Workplace scores held relatively firm with a measure in the mid-range average of 64.7 on this dimension.
Financial services industry reputation scores
Loss of reputation leads to loss of support
With the overall fall in the level of reputation, the levels of behavioral support on behalf of Equifax also declined, with major losses across the board. Of note, the measure of willingness to recommend Equifax fell to 40%, say something positive dropped to 36%, and likelihood to give Equifax the benefit of the doubt dropped to only 35% — falling from levels of behavioral intent that were already low. In short, it means the majority of the US General Public are either on the fence or negatively biased towards Equifax. This puts the organization at further reputation risk – and underlines concerns about the short-term implications for the business.
Equifax pre- and post-crisis supportive behavior
Five reasons why this happened
- Response paralysis and opacity
Equifax was slow to reveal the data breach, and sat on the ticking time bomb of a potential risk to members of the General Public before revealing the problem about a month after the incident – it should have been more transparent and open in revealing the issue.
- No post-crisis management strategy
Equifax did not have a game plan to deal with the data breach – it’s not that it happened, but ultimately the poor way in which Equifax handled the data breach that ultimately hurt it.
- Compounded “Bad News” made things worse
Beyond the data breach, the actions of senior executives within the organization and timing of the sale of company stock has been called into question and has led to investigations that serve to perpetuate the bad news cycle associated with Equifax.
- CEO departure points to senior executive responsibility
In the eye of the crisis, public, board level, and investor pressure ultimately led to the CEO stepping down, which in turn has cast a shadow over the role of senior executives — in the unpreparedness of Equifax’s ability to defend against and then manage the data breach.
- Workplace culture of Equifax is now at risk
The one redeeming feature of how the news cycle has played out is that the finger has not been pointed at the actions of any employees within the organization – but the data breach crisis will undermine Equifax’s Workplace and compromise its ability to attract and retain the best talent.
A tough road ahead for Equifax
In not being able to pivot its story to how it was effectively dealing with the crisis and the prevention of future data breaches, Equifax is likely to continue to be in the penalty box until thorough investigations of events leading to and associated with the crisis are completed. It all suggests that Equifax is likely to experience more than a reputation black-eye and could be in for an extended period of prolonged negative scrutiny that could keep it in the vortex of a bad news cycle — and yield more serious and lasting damage to its reputation.
Executive Partner, Chief Research Officer