Contact Center Trends
How to Calculate the True Financial Cost of Contact Center Downtime
By Justin Robbins
0 min read
The financial cost of contact center downtime can have a devastating impact on an organization. From lost productivity to customer recovery efforts, it’s important to understand and measure the costs of outages.
In today’s blog, we’ll define the various financial costs that are associated with outages and provide guidance on how to measure each in your contact center.
A contact center outage results in both direct and indirect financial costs. Direct costs can be tied to a specific object (like contact center labor costs or the cost of producing your product), while indirect costs may be shared across departments (like utilities or business development costs). Understanding each of these costs and how they’re affected during an outage will enable contact center leaders to articulate the importance of keeping contact center operations up and running.
The calculations that we’re sharing today are not an exhaustive list but encompass the most common and accessible financial measure of contact center downtime. While your organization may have financial measures that go beyond what we’ve shared, the most accurate calculation of downtime’s financial impact will take all or most of these into consideration.
Revenue-to-contact ratio –This calculates the potential lost revenue costs for contact centers that are revenue-generating or sales-oriented. It is calculated by multiplying the average revenue per contact by the average number of contacts in a given interval.
For example, a contact center has a one and a half-hour outage. They typically average $75 in revenue per contact and receive 1800 contacts per hour.
(1.5-hour outage) X (1800 contacts) X ($75 average revenue per contact) = $202,500 potential lost revenue
Direct lost productivity – This is the dollar amount associated with the costs of staffing the contact center during an outage that prevents employees from doing any work. Lost productivity costs should include wages, benefits or other compensation that employees will receive for being at work during the outage interval.
For example, a contact center has a three-hour outage. 125 agents were clocked in during the three hours, each with an average total compensation of $18 per hour.
(3-hour outage) X (125 agents) X ($18 per hour) = $6,750 direct lost productivity
Discover the Total Cost of Contact Center Downtime
Indirect lost productivity – In some instances, contact center agents are utilized for other types of work during outages. Additionally, there is a nonproductive amount of management time that occurs as a result of downtime. This calculates the cost of lost management time, as well as any agent inefficiencies that may occur.
For example, a contact center has a one-hour outage. During that time, managers were only able to complete half of their scheduled tasks. There were four managers working, each earning an average total compensation of $35 per hour.
(1-hour outage) X (4 managers) X ($35 per hour) X (.5 unproductive time) = $70 indirect lost productivity
Operational expenses – These expenses come in two forms – those which occur during an outage and those which occur as a result of catching up from an outage. The most common type of outage-related operational expense is the cost of overtime or additional staffing that’s required to handle the temporary increase in contacts that occur when the contact center resumes operation.
For example, a contact center has a service level agreement (SLA) to answer 90% of calls within 20 seconds or less. Their typical inbound volume requires them to staff 50 agents on the phone. But, as a result of their outage, their inbound volume is almost double its average. They would need to pay increased staffing costs to ensure that they have the appropriate number of agents to maintain their SLA.
Lost revenue and customer recovery costs – One of the greatest long-term financial risks of an outage is that it could cause potential customers to choose a competitor or cause an existing customer to think twice about their loyalty. Some of these costs can be calculated (such as decreases in monthly revenue or known expenses for compensating customers) while others are largely unknown. It’s virtually impossible to know everyone who tried to contact you and where they ended up going.
At Talkdesk, we understand the real cost of downtime and work hard to prevent outages for our customers. That’s why our enterprise cloud contact center delivers guaranteed reliability and offers an unprecedented 100% uptime SLA. Our voice quality is backed by an industry-leading 4.22 MOS and to ensure the security of your data, Talkdesk maintains security and compliance certifications from all leading global alliances and organizations.
