In recent blog posts, we explored fault resolution using 3-GIS tools (such as OTDR Trace and Single Point of Failure) and discussed common reasons customers may dial up their service providers for assistance. While addressing individual issues is crucial, it’s also important to understand the broader implications of network outages. Today, we’ll dive into the larger impacts of network outages, including the financial, operational, and customer service challenges they pose.
The financial impact of a network outage
According to PC Magazine1, a worldwide internet outage lasting just one minute could cost the global economy over $20 million, with the US, China, and the UK bearing the brunt of the losses. For individual companies, the stakes are equally high. For instance, Amazon could lose nearly $1 million per minute during an outage, and other companies like Netflix, PayPal, and Salesforce would also face significant losses.1 Factor in missed marketing opportunities, and the number grows even more significantly for companies of all sizes.
Beyond the immediate financial hit, outages also result in productivity losses, as teams may be forced to pivot from their primary activities to focus on outage restoration. This shift not only disrupts planned projects and initiatives but also diverts valuable resources and manpower away from growth-oriented tasks, such as product development and sales.
Additionally, there’s an increased demand for customer service as support teams are inundated with inquiries and complaints from affected customers. These teams, which usually handle routine support tasks, must now manage a higher volume of calls and messages related to the outage. This surge in demand can overwhelm the support infrastructure, leading to longer wait times and potentially unsatisfactory customer experiences. And, in some cases, overtime hours may be required to handle the increased workload, further escalating operational costs.
Customer churn
Frequent outages and prolonged downtime have been identified as leading causes of increased customer dissatisfaction and attrition. According to Statista2, the telecom industry experienced a customer churn rate of 21% in 2020. Allconnect3 further indicates that reliability, second only to price, is a major factor influencing a customer’s decision to switch providers. Ensuring reliable service not only differentiates providers in a market with similar price points but also helps retain both residential and business clients who depend on consistent connectivity.
Navigating the Net Promoter Score
Not surprisingly, an outage, whether prolonged or not, can damage a service provider’s Net Promoter Score (NPS)—a measure of customer loyalty and satisfaction. A low NPS indicates dissatisfied customers, who may be more likely to switch to a competitor, while a high NPS reflects strong customer loyalty. Maintaining a high NPS can mitigate negative impacts and help retain customer trust during an outage.
Despite the scrutiny service providers face, internet software and services on average receives a score of 16.4 Though this may seem low, a score of 0 to 30 is considered good, above 30 is excellent, and below 0 indicates room for improvement. But, given the growing competitive landscape, it’s not surprising that many service providers are prioritizing the improvement of their NPS.
Accelerating fault resolution
Maintaining a digital record of network assets within an advanced system, like 3-GIS | Web, can significantly enhance fault detection and resolution processes by identifying the root cause of issues quickly, allowing for faster repairs. For example, 3-GIS | Web allows users to pinpoint common infrastructure points between multiple customers, while inputting OTDR trace readings and running signal reports to help identify and prioritize affected areas. By investing in such technologies, service providers can minimize the duration and impact of outages.
Clear and timely communication is also paramount during an outage. Customers need to be informed about the issue, its impact, and the expected resolution time. Transparent communication helps manage customer expectations and reduces frustration. Regular updates through various channels, such as email, social media, and SMS, keep customers informed and reassured.
Network outages are an unavoidable reality, but the way service providers handle them can significantly impact outcomes. By prioritizing rapid fault resolution, service providers can optimize network performance and maintain a strong brand reputation even during disruptions—not only mitigating the financial repercussions of outages but also fostering enhanced customer loyalty and trust.
Want to see ways you can expedite fault detection in 3-GIS | Web? Check out our recent webinar, Tools and techniques for rapid fault resolution.
Citations:
1 In a Catastrophic Internet Outage, This Is How Much Money Big Tech Would Lose Every Minute. PCMag. https://www.pcmag.com/news/internet-outage-how-much-money-big-tech-would-lose
2 Customer churn rate in the United States in 2020, by industry. Statista. https://www.statista.com/statistics/816735/customer-churn-rate-by-industry-us/
3 Price pushes people to switch internet providers. Allconnect. https://www.allconnect.com/blog/reasons-people-switch-providers
4 2024 NPS Benchmarks for B2C. Relently. https://www.retently.com/blog/good-net-promoter-score/
