The Deeper Cost of a One-Hour Outage

After a single hour outage on your business website, you may have a higher cost than you think. Just one hour of downtime could cost your business thousands of dollars–and could lead to catastrophe. In fact, the average cost of downtime hovers around $5,600 per minute, with the low end costing around $140,000 per hour. That doesn’t just include the cost of getting your business up and running again, either. In fact, there are several common costs of downtime that you might not anticipate as you create your disaster response plan and consider the cost of downtime to your business.

How much is a single-hour outage costing you?

1. The Cost of Lost Sales

How many sales, on average, does your business make per hour? Suppose that you have an estimated monthly revenue of $150,000 in sales. That’s an average of $5,000 in sales per day. In a single hour, you could lose $208 in sales–and that number could climb significantly higher during peak shopping hours, around 10 to 11 am and around 8 to 9 pm, when shoppers are most likely to log in during that time. If your website does go down during those hours, it could mean a substantial loss of revenue, including as much as half of your daily profits. 

2. The Cost of Lost Support Tickets

Customer service is a critical part of providing the support your customers need when they interact with your business. 96% of customers note that customer service is one of the most important elements in determining brand loyalty. Your website is the ideal place to connect with your customers–and in fact, a high percentage of them prefer live chat, email, and other virtual support options to making a phone call or visiting your business in person when they have a problem. 

If your website is down, however, customers may not be able to put in those support tickets–or, worse, those tickets may not go through, even though customers think that they have. As a result, you do not know about customer problems, cannot address them, and may have more dissatisfied customers. 39% of customers will avoid your business for at least two years after a bad customer service experience–and in the meantime, many customers may find a new favorite business to take care of their needs. 

How much could those lost support tickets cost you? Suppose that, on average, you have three support tickets that come in over the course of an hour. One of those customers, after experiencing poor customer service and support from your business, probably won’t return. That means you will lose the entire lifetime value of that customer. 

Calculate the average lifetime value of a customer: their usual purchase amount, their purchasing frequency, and the length of time they’ll usually stay with your business. Suppose, for example, that your customer lifetime is usually about five years. Customer typically make a purchase every other month totaling around $200. Each year, that customer is worth an estimated $1,200, which means that, if you lose a customer early in that lifecycle, you may lose an estimated $6,000 for each lost customer. 

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3. Potential Reputational Costs

Your reputation is everything in ecommerce. Now, more than ever, consumers look for social proof when they’re ready to enter into a relationship with a company. If you have a poor online reputation–such as, for example, a reputation for failing to answer customer service queries, or a reputation for a website that regularly goes down–you may find that customers are less likely to come to your website in general. 87% of customers check out reviews for businesses, particularly local businesses, online. If a dissatisfied customer posts information about their poor experience with your company after a website outage, it may be the first thing those customers see when they look for reviews of your website.

It can take time to repair the damage to your reputation after an outage. If a poor review chases off just 10 customers with a lifetime value of $5,000, your business could lose an estimated $50,000 due to that downtime. If it chases off 100, you could lose as much as $500,000. In the meantime, you may find yourself launching more marketing campaigns, social media campaigns, or email series in an effort to decrease the blow to your reputation, which may further raise your costs. 

4. Internal Delays and Inefficiencies

It’s not just your customers that rely on your website. Your employees do, too–and when your website goes down, they can’t do their jobs efficiently. Suppose that you have 10 employees in the warehouse, relying on your online ordering system to keep them busy. Each of them gets paid $20 an hour. If your website goes down for an hour, and your employees have nothing to do during that time, you’ve effectively lost $200 more due to inefficiency or inability to reasonably use their time. 

5. Lost Customers

Many of the users who come to your website are interested in making an immediate purchase. If your website is down, they don’t want to have to come back later to see if it’s come back up–especially if they’re in a hurry. They may go to a competitor instead. Suppose that 10 visitors come to your website over the course of that hour, each planning to make a $50 purchase. If five of them go elsewhere, you’ve lost $250. Unfortunately, your losses may go much higher than that: if just two of those customers choose to stick with your competitor, rather than coming back to you in the future, you may have lost their lifetime value, as well. If their lifetime alum is the $5,000 estimated above, then you’ve lost $10,000 in that hour-long outage.

Having your website down for just an hour can mean substantial cost to your business in more ways than you think. Working with an effective IT provider, however, can help keep your website up and running and avoid many of those costs. Contact us today to learn more about our solutions and how they can benefit your business.

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