For an e-commerce retailer, website downtime is analogous to a brick-and-mortar retailer being forced to shut down its store unexpectedly, sometimes during peak business hours, a new product launch, or a major holiday event. In the case of both downtime and store closings, customers are unable to make purchases, and business owners mourn the resulting loss in revenue.
With players as prominent as Target
having lost hundreds of thousands of dollars in sales due to downtime, it is understandable that revenue loss is the primary concern that companies tend to express regarding the threat of downtime. However, for e-commerce retailers, the cost of website downtime transcends revenue loss and extends to various other repercussions that significantly exacerbate the total cost of downtime. Here are 5 costs of downtime that are often forgotten, yet demand retailers’ attention:
1. Competitor Infiltration
72% of web users report abandoning a company website for a competitor’s due to frustrations with the site. When a website goes down, online shoppers are not willing to wait for the unknown time at which the site will be back online to make their purchase. Instead, frustrated visitors simply spend their coveted dollars on a competitor’s functioning site. Downtime is frustrating for online shoppers, but the ability to instantly navigate to a competitor’s site certainly provides some consolation–for them at least.
2. Loss of Repeat Purchasing & Customer Loyalty
Users who experience downtime on your site are less likely to return to your site in the future. A study conducted by 1&1 Internet, Inc. recently revealed that 58% of consumers have chosen not to use a company again due to website errors. Regarding this study, 1&1 Internet, Inc. CEO Oliver Mauss comments, “It is clear that when faced with a faulty or offline website, consumers will turn elsewhere. Perhaps more surprising is the proportion that will be unwilling to return.” This permanent loss of customers means that retailers must consider the loss of potential revenue incurred due to downtime in addition to the revenues lost while the site is offline.
3. Negative Brand Equity
Downtime is often highly publicized via word-of-mouth and social networking sites. According to data released by KISSmetrics, 44% of online shoppers report that they are likely to tell others about a bad online experience. The negative publicity that downtime can catalyze damages your brand’s reputation and significantly decreases the likelihood that customers will recommend your site to others. Businesses spend large sums of time and money building their brands, and the potential for one instance of downtime to counteract these efforts is an imminent threat that many companies fail to plan for.
4. Impaired Employee Productivity
It is unlikely that your business has filled the position of Dedicated Downtime Damage Control Specialist. Rather, when your site goes down, employees with bigger priorities and projects have to spend valuable time working to get your site back online. The opportunity cost of troubleshooting will be especially high if downtime is a frequent occurrence on your site. Moreover, downtime can occur at anytime. If your site happens to go down outside of office hours, you may find it difficult to contact employees who can work to get your site back online quickly. Not to mention, the employees who spend their Saturdays getting your site back online might not be the most pleasant co-workers come Monday morning.
5. 100% Loss of PPC Spending
If your business employs a pay-per-click advertising model, you incur yet another hidden cost when your site goes down. The ROI of PPC spending comes from customers clicking on your ads, navigating to your site, and making purchases. When your site is down, customers can still click on your ads, but they are unable to access your site, never mind make a purchase. Thus, the price you pay for their click is completely wasted due to downtime.
The costs of downtime add up quickly. Investing in downtime prevention and management strategies is a smart choice for any retailer with an online sector looking to maintain its brand’s reputation, retain loyal customers, and maximize ROI. Load testing and performance monitoring provide options for testing your site under heavy traffic to prevent downtime and for receiving instant alerts that pinpoint problem areas in the case that downtime does occur. Employing these services to minimize the impact of downtime will give you a leg up on the competition and ensure that no excessive time or money is expended on downtime damage control.
