Blog Post

The cost of inaction: A CIO’s primer on why investing in Internet Performance Monitoring can’t wait

Explore the imperative of Internet Performance Monitoring for CIOs. Delve into ROI calculations, customer retention, and workforce experience.

When John Wanamaker famously declared, “When a customer enters my store, forget me. He is king,” he unknowingly coined a mantra that remains as relevant today as it was in the 1900s. This philosophy, rooted in the customer service ideologies of his time, holds true not just for brick-and-mortar stores but also for eCommerce.  

The customer is still king in the digital age

Let’s break it down. Customers today are completely in control of their buying journey, whether it’s a planned purchase of a home appliance, a car, or an impulse buy online, there is little the merchant can do to influence the journey or the purchase other than remove any digital friction and make the experience as pleasant as possible. It is so easy to simply go to an alternative store online. It only takes a second.  

Consider the following stats:  

Source
  • 53% of mobile users will abandon a website if it takes longer than 3 seconds to load.
  • 82% of consumers say slow page speeds impact their purchasing decisions.
  • Bounce rates skyrocket at the 2-to-3 second mark – 40% of consumers won't wait more than 3 seconds. 

Customer acquisition vs customer retention costs

A Harvard Business Review article states, “Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” How can organizations afford to ignore their digital experience? What is the cost of inaction if you are losing 40% of the consumers on your site because it’s slow? Can you afford to lose 40% of your revenue?  

Employees want great experiences, too

Now, let’s take a quick look at the employee workforce side of the equation, in a recent survey, Gartner stated that 47% of digital workers struggle to find the information needed to effectively perform their job. This seems hard to imagine, given the plethora of tools available to us today.  

Wanamaker’s ethos is equally relevant in today’s hybrid work environment. After all, your employees are your internal customers. If the modern employee doesn’t have the right equipment, the right tools, a great culture, and fair compensation, they won’t wait around for change, they will find something else, and find it quickly.      

The cost of ignoring your employee and customer experience is too high to ignore.

Let’s delve deeper into each area and calculate the customer experience costs for our fictitious organization, Luxurygoods.com

Calculating the ROI of customer experience

Luxurygoods.com is an eCommerce company that generates about $100M in revenue annually, with 80% coming from their site.  

According to a Forrester Consulting report, an organization of this size experiences an average of 76 disruptions a month, including slow performance and down time. The 76 disruptions a month accumulate to 19 hours of slow or down time annually, when we consider the average length of disruption to be 15 minutes.  

These disruptions represent an annual revenue loss of over $2M, along with many other wasted costs totaling almost $200k (see below).    

Luxurygoods.com’s Customer Experience Use Case ROI chart

When calculating the ROI of CX, you must consider more than just disruption costs.  

Included in our analysis are wasted headcount costs for war rooms that would no longer be necessary.  

Additionally, we consider the impact on reputation. As ServiceNow CEO Bill McDermott said, “Trust is the ultimate human currency. It's earned in drops and lost in buckets.”You don’t want to be the CIO of an organization that loses the trust of your customers.  

We also factored in wasted advertising spend. Imagine if our eCommerce company ran an ad during the Superbowl featuring a QR code that directed interested consumers to the website’s landing page, offering a special deal. Now imagine that the performance of that page was so poor that consumers couldn’t complete a transaction. This investment in advertising would then be wasted – actually becoming negative, as it degrades the brand’s reputation. This isn’t just a hypothetical scenario; it happened to Coinbase last year.  

Mini outages with major impact

Of course, not all Internet outages take a website down. Intermittent outages—those almost invisible disruptions, like ‘paper cuts’—may only affect a small group of users or a specific aspect of a site's functionality.  

Despite their subtlety, these frequent interruptions are anything but minor in impact. They lead to user frustration, diminish trust, and indirectly dent revenue. Most concerning is that these problems often remain unreported, leaving IT teams unaware and the brand's integrity to gradually deteriorating.  

Identifying and addressing these ‘mini outages’ is vital for ensuring a smooth digital experience and protecting your organization's reputation.  

The solution: Internet Performance Monitoring (IPM)

The good news is that these losses don’t have to be accepted as inevitable. Internet Performance Monitoring (IPM) is purpose-built to address these very challenges.  

IPM ensures that your IT teams have complete visibility from your users’ perspective so that you can catch issues fast before they become incidents.  

Catchpoint IPM offers comprehensive visibility into users’ online journeys, regardless of their global location. It monitors the global Internet for outages, tracks all key third-party services, and even monitors your key applications. Leveraging AI for autocorrelation, IPM ensures you’re the first to know about any issues.      

Customer experience ROI calculator insights

Let’s take the conservative approach that Catchpoint IPM is only going to boost LuxuryGoods.com’s performance by 15%, which is on the lower end of what our customers realize.  

We see a return on investment in less than 3 months, and revenue gained of almost $350k.  

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This is just looking at a single Customer Experience Use Case, using a very conservative improvement percentage.  

However, as highlighted earlier in this article, once you’ve lost a customer, it’s much harder to regain them. Therefore, it’s crucial to do everything you can now to guarantee the best possible experience for them.    

Calculating the ROI of workforce experience

Now that we have looked at the customer side of the equation, what about your most important asset: your employees.  

Catchpoint IPM can significantly improve employee experience, too. By installing an endpoint agent on each device, you can proactively monitor key workforce apps and network connectivity. For example, you can notify your employees in advance if there is a Microsoft Office 365 or Zoom outage. We also have hop-by-hop network visibility so that any issues become quickly apparent, facilitating swift changes when needed.    

Let’s drill further and look at the form that we collaborated on with our client at Luxurygoods.com for the Workforce ROI calculator.  

Many of these categories are easily completed, such as:  

  • average helpdesk employee loaded cost
  • average of the remote employee loaded cost  

It considers the number of tickets your organization generates per month, and the average time to resolve those tickets. By estimating reductions in ticket numbers and Mean Time to Resolution (MTTR), we can identify improvement potentials.  

Recognizing not all issues are equally impactful, we account for only 50% of the tickets as directly relevant. Moreover, we explore 3 scenarios (best case, worst case and a balanced case), so that you have complete visibility of what is possible for your organization.    

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Workforce experience ROI calculator results: Significant savings

Analyzing the results, we can see significant savings across each of the scenarios:

  • Best-case scenario: $381K
  • Worst-case scenario: $142K
  • Balanced case scenarios: $269K  

Overall, even the worst-case scenario realizes a ROI of roughly 6 months.

Forbes article ‘Five Hidden Costs Of Employee Attrition’ states, “One estimate places the cost to replace an employee at three to four times the position’s salary.”  

These analyses clearly demonstrate that the cost to ensure and improve your employees’ digital experience is a necessary investment towards your overall organizational resilience.    

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Addressing today’s IT leadership challenges

IT leaders today are challenged across the board with resources, budget, talent, technical debt, digital transformation, shift to the cloud, innovation, growth, and organizational reputation. All while the clock is ticking and time to success is measured in minutes, not months or years.  

The pressure to succeed is immense, and I am personally glad I sit on the other side of the fence. In no way are we saying Catchpoint IPM is the silver bullet to solve all these challenges, but based on what our customers are telling us, we are most definitely a key part of the solution.  

In a world where you are not rewarded for using more tools and more platforms, why not simply choose the right ones that can make an immediate material difference for your customers, your workforce, your organizational and personal reputations, and your revenue?  

To learn more about your specific ROI, schedule a chat with Catchpoint today.  

To learn more about Catchpoint IPM and how we can help you achieve similar results to what I shared above, check out our guided product tour.  

Customer Experience
Workforce Experience
Internet Performance Monitoring
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