Not Promoting Uptime Can Cost You up to $240,000+
On those rare occasions when Marketing reaches out to IT for product performance information, ideally your company’s 99%+ uptime is the subject of conversation (rather than instances of application downtime). However, it’s inevitable that your application will go down at some point and at that point, the conversation—from the Marketing perspective, at least—is necessarily one of communications damage control.
Application downtime crises look something like this:
• Marketing is frantic to prevent negative press from bubbling up and “spilling out” everywhere about the disruption in service.
• IT is frantic to resolve the issue that caused the disruption.
• Customer Service/Support is frantically trying to stay on top of the exploding volume of call, email, and live chat inquiries and/or complaints.
• At least one member of the Executive staff is checking in perhaps more frequently than they need to for an updated status on everything.
So how do you prevent such crises?
To be honest, you can’t 100% prevent service disruptions. It’s unreasonable to expect that of your IT team—even giants like Facebook and Google have experienced downtime.
What you CAN prevent is the crisis part of the service disruption, and that’s where Marketing comes in to support IT. But before diving into the How, more of the Why.
Why Marketing Should Care About Uptime
A study released last year on application downtime and uptime (more specifically: data center outages) by Emerson Network Power and the Ponemon Institute estimated that application downtime costs an average of nearly $690,000 for each single instance of system downtime. The largest portion of these costs—37%, or $239k—are due to reputation damages and customer churn. Instances in the study lasted anywhere from 15 minutes to well over 6 hours, with the average falling just under 90 minutes in length (more on these cost stats at the end of this post).
Regardless of how many hundreds of thousands of dollars in reputation damages and lost customers application downtime represents (again, see stats at the end for why it would be $170k vs. $240k), it’s clear that Marketing has a stake in preventing the severe unhappiness that results from a service disruption.
Not only is it stressful and unpleasant to deal with in the thick of a crisis, but the long-term consequences to customer retention and referenceability (not to mention overall company growth and profitability) are truly painful. The solution is providing an accessible, customer-facing communications tool that promotes uptime.
Reducing Dissatisfaction by Promoting Uptime
There are two important priorities when effectively handling customer dissatisfaction: expectations and professionalism.
Expectations need to be understood and managed—while it’s not unheard of for customers to have unreasonable expectations, generally their expectations are reasonable given what they were told during the sales process. As such, when it comes to application downtime, setting expectations early and often is critical to minimizing costly customer dissatisfaction.
Professionalism is the level of competence and courtesy you demonstrate to your customers that conveys to them that you know what you are doing and that you care about serving them well.
By providing an application status page—the aforementioned “accessible, customer-facing communications tool”—that promotes uptime, you are managing expectations and demonstrating professionalism by:
1) Acknowledging that there is a problem and that your team is working diligently to resolve it
In addition to demonstrating professionalism, this conveys transparency and accountability, which helps reinforce trust in your company.
2) Reminding customers and end users of the long history of uptime
This also helps reinforce trust, but perhaps more importantly it adjusts expectations by putting the current, inconvenient disruption in the greater context of 99%+ uptime.
3) Assuring end users that they will receive notification immediately, via their preferred communication method (e.g. email, text message, etc.), once the tool is up and running again
This is a pretty fundamental feature of hosted status pages. It helps set expectations in the minds of your customers and, as a side benefit, it can also serve to inform internal stakeholders (e.g. Executive staff) about progress in resolving the issue without distracting IT from doing the work required to actually resolve the issue.
Marketing needs to be aware of and actively promoting uptime as preparation for the infrequent but inevitable and costly instances of application downtime. An application status page that integrates automatically with your application monitoring tool (e.g. New Relic) is the easiest way to communicate with your end users and customers about uptime. Failure to communicate about uptime effectively amounts to failure to mitigate any of the hundreds of thousands of dollars in reputation damages and customer churn described in the Ponemon research report(s).
More on the Cost Stats Used
As of earlier this year, Gartner put the average cost of application downtime at closer to $500k than $700k. You can read more about the cost of downtime here. It’s worth noting that Gartner’s July article uses $5,600/min as its figure for calculating losses (the same used in our own earlier blog post about the cost of downtime), and that the Ponemon Institute’s research report released last year uses $7,900/min, a 41% increase from their 2010 estimate of $5,600. Again, this amounts to reputation damages and lost customer costs of either $170,000 or of $240,000 for each “average” instance of downtime—neither of which is acceptable, especially considering the cost of a solution that can address customer dissatisfaction.