"E-Failure" costs UK Business £1billion per year
27 January 2006
This is according to research carried out by messaging security company Cipher Trust on 30 marketing and 30 IT directors in organisations with 200 plus employees.
E-failure was defined as "prolonged disruption or downtime of a company's email system." The average company suffers four per year with the average time the email is down being more than half of the working day. When this happens, respondents cited the following as the major consequences:
- Immediate cost ie. no communication for half a day can cost a business £68,000.
- Lost opportunity ie. when customers cannot place an order they go to the competition.
- Consequential loss ie. e-failures can damage brand perception.
- Internal impact ie. it can affect staff morale.
More specifically, both marketing and IT directors believe that new customers will make only one or two attempts to contact an organisation before looking elsewhere and that a loyal customer may go elsewhere after a third failed attempt.
Stephen Martin, business insight specialist at analyst firm, Market Clarity, comments, "An e-failure raises doubts in the mind of the customer about the fundamental capability of the organisation. If the company can't keep a simple communication such as email up and running, how are they going to handle my business?"
The most common reasons for e-failure are virus attacks and spam, which IT directors expect, will continue to increase.
Of the 30 IT directors surveyed, 70 per cent expect their organisation to increase the amount spent on improving email systems over the next 12 months.
Despite the inherent problems of email, 70 per cent of those marketing directors surveyed expect to increase their use of e-marketing - with the average increase anticipated to be more than 40 per cent.