What is the Cost of Website Downtime?
It’s important to keep your website running at all times because the second it goes down, you begin to lose money. How much, though, are you actually losing? That’s a tough question to answer, but one that business owners need to think about, especially ones that rely heavily on their websites to generate revenue.
In 2013, Amazon’s website went down for one hour, costing the company an estimated $1.86 million in revenue. Now, that’s an extreme example because there are not many companies on the web that make what Amazon makes, but it shows how important reducing downtime can be.
When your website goes down, your business suffers in three primary ways. First, your customers cannot interact with you – whether it’s buying a certain product, using a specific service, or gaining information about your business for another revenue-generating event. Your company must also spend resources to get the site back up and running, which can divert internal resources from growth opportunities.
An outage also hurts your company’s overall brand. No one feels good about a company if its site is down. It looks unprofessional and adds doubt. You likely have competitors in your industry, and your website being down is an invitation for customers to seek them out. Customers may forgive a short outage once, but routine outages compound the problem.
The same is true for search engine optimization. A down website can hurt your SERP (search engine results page), making it harder for customers to find you through an organic search and costing you business.
While all these factors add up, the simplest way to calculate the cost of website downtime is through revenue. Let’s assume that your company’s quarterly revenue is $250,000. Divide that number by 2160, the number of hours in a 90-day quarter. For this scenario, it means that a down website costs approximately $115 per hour. Now, if you work for a bigger company or one that leverages the web more, that number can be significantly higher, as demonstrated by the prior example of Amazon’s website being down for just an hour.
As you can see, there are a lot of factors that impact the cost of website downtime. While our simple equation is slightly crude, it provides a good starting point for internal discussion. It also shows the importance of keeping your website running at peak efficiency, as any downtime equates to a loss for your company.
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