Hard Cost of Website Outages

If as a information publisher, web hosting services provider, or technical services company you may think outages are no big deal, then you’ll want to read every word of todays post. I don’t mean to be dramatic over this, but outages are some serious as serious as a heart attack …

Early in a client relationship, here’s what I might hear:

“We’ve had a whole bunch of blackouts here and there over the past 4-5 months. That’s another story unto itself. Never longer than 5-15 minutes on an average.” — John

While I’m very upfront stating you WILL have outages, I’ll never tell you that they are acceptable. I know both first hand and through supporting tough highly-available environmental. In fact, plan to have outages, but NEVER be unavailable to your end users without advance notice.
Think about it. Today there is NO excuse for content and even some business applications websites ever going down completely. With content delivery, reverse proxy, adpative DNS failover, and so many other load balancing technologies, it’s cheaper to keep a site active.
Let’s say you have 22,000 uniques a day, a simple 5 to 15 minute outages means 76 to 229 individuals who may never come back to your website. An outage during peaks times could mean losing thousands of visitors. Can you afford to lose even a single visitor you paid to attract?
As a services provider, problems can compound quickly costing you direct billing and client loyalty worth thousand an hour. But even not considering the client, visitor or end-user, website outages cost you money.
Think about it, you invest time, content, and money in visitors. Visitors find your site through an obscure link, but get an even more obscure error when they try to visit your site. Almost immediately most visitors will just go to another site and forget you ever existed.
That’s time spend with no hope for return!
Next imagine you were sending paid traffic to a landing page, perhaps a partnership with a strategic partner. Not only will you lose the money on paid visitors, you’ll lose face with a partnership and the potiential revenue those names bring to the table. Outages hurt future opportunities.
That’s future opportunity lost beyond measure!
Here’s quick and easy way to calculate simple costs of a website outage. It starts with knowing the number of leads generated, unique visitors gained, and profit/loss for period of measure.

  1. Determine Costs per Lead and Unique Visitor,
  2. Determine NET Earnings per Lead and Unique,
  3. Determine Leads and Unique Lost in Outage,
  4. Know an Aproximate Cost of Website Outage,

For this example, 174 full-address leads were captured, plus 7,225 unique visitors added to Site-T over a one week period. For clients, I measure weekly because I bill on a weekly basis, higher volume sites may measure daily.
This means, for every 41 new unique visitors, they captured 1 full-address lead. With the total costs of $4,200 in services; including editors, webmaster, hosting, and software licenses; that’s a cost of $24.1379 per lead and $0.5813 per unique visitors.
Let’s look at NET revenues: Site-T has 5 banner positions each averaging $8.65 cost per thousand (CPM), with a back-end revenue of $1.15 per lead per month and earning of $0.71 per unique visitor per month from direct revenue (i.e. purchases, subscriptions, and affiliate links.)
With each unique visitor producing 3.6 impressions and an average stay of 4 minutes and 20 second, you are looking 22k unique visitors producing 79,200 page views a day.
With these factors now determine how many visitors you would lose in a 5 to 15 minute outage. As mentioned ealier, it’s 79 to 229 unique visitors. Let’s assume you have very loyal visitors and look at only a 5 minute outage.
At the current conversion of unique visitor to lead, you’ve lost an average 1.9268 leads with 79 visitor. According to impressions per visitor you’ve lost 284.4 impressions. This assumes visitors are evenly distributed across your site in a 24 hour period.
Now simply multiple lost leads, visitors, and impressions against monetary factors. This will tell you costs and net earnings lost — worse, because during an outage your bounce rate is 100% your costs DOUBLE because you’ll need to pay to recapture these visitors.
That’s hard costs of $93 for the lost leads, $112.18 for lost visitors. Estimated revenue losses are $12 from banners, $2.22 a month from leads lost, $56.09 in direct revenue. Total one-time losses equal $217, recurring loses equal $58 a month.
Remember, these are just simple estimates, more accurate numbers would come from considering bounce rate, life-time customer value, and other factors unique to your business website. Unfortunately the truth about the hard costs of website failure is worse.
Because visitors are NOT distributed evenly over 24-hour periods, a website outage during peek times could be between 10 and 1,000 times these losses for a single 5-minute outage.
While these numbers may not seem significant (and the math behind this example is grossly simplified), a single 5-minute outage once a week sucks more than $138,000 from your bottom line each year. You’ll undoubtably agree that website outages, however small, are unacceptable and need to be prevented.
How is this problem compounded? Remember, this example is for 22,000 unique visitors, now imagine your loses if you had double this in traffic, how about triple. Plus, when you look at the losses to your entire team and the long-term value of a regular reader, then outages hurt that much more.
Because website outages are serious business, You have my permission to FIRE my entire team if any ONE of them causes an outage. You should expect the same of any provider who supports your business website, the same as you’d have an issue with any other professional who literally shutsdown your business and criples your earnings.
© 2010 B2B Website Profits, All rights reserved.

About Justin Hitt

Justin Hitt is a business analyst who specializing in sales generating marketing copy. Author, copywriter, and publisher of newsletters that help clients transform business relationships into profits guaranteed. Reach him by Fax through this resource, or http://www.JustinHitt.com/

About The Author

Justin Hitt

Justin Hitt is a business analyst who specializing in sales generating marketing copy. Author, copywriter, and publisher of newsletters that help clients transform business relationships into profits guaranteed. Reach him by Fax through this resource, or http://www.JustinHitt.com/