Business Continuity: The Difference between Customer Turnover and Loyalty
Business downtime can occur in a moment’s notice, in any form—natural disaster, security breaches, network outages, or something as simple as the power or water going off in the building. While some of these disruptions are easier to anticipate, all of them are equally difficult to address. These precarious risks, although detrimental to all stakeholders, are most fatal to the organization. Why? Well, there are several reasons.
1. Only 25 percent of companies with business continuity plans have a good chance of surviving the aftermath (Open Access).
2. 75 percent of companies without business continuity plans fail within three years after facing disaster (Open Access).
3. 40 percent to 60 percent of businesses disrupted by a disaster without a continuity plan, never reopen (Open Access).
Given these sobering facts, it is curious that so few organizations take the route less traveled—the “better safe than sorry” path. In fact, a majority of companies take the “it will not happen to us” approach. And while this mentality may have worked up until now, there is nothing separating these organizations from customer attrition and a significant impact to the overall business and brand (i.e., your customers switching to your competitors).
A well thought out business continuity plan and its subsequent management, however, is a key differentiator and a must have component for business prosperity.
Three Tips to Ensure Business Continuity and Operational Uptime
Events do not always go as planned. A hurricane may hit a company’s northeastern facility, causing customer demand spikes to reach unprecedented levels. In addition, its northeastern contact centers go offline without any known resolution time. Companies need to be able to adapt to change and remain flexible on a daily basis. The key to flexibility is to not rely on one single center or one single system. Rather, identify possible points of failure and create redundancies for those operations. For example, in the scenario above it is important to ensure that there are redundancies in place that reroute customer inquiries to different geographical locations that can handle such demand.
As I mentioned, unplanned events can and often do include security breaches. And security breaches can be the worst type of business disruption. Even if your employees are safe, operations are running and customer demand is being met, security breaches cause distrust between your company and your customers. In fact, according to a study sponsored by IBM, data breaches cause high customer attrition rates and lower customer acquisition rates (2014 Cost of Data Breach Study). To prevent these types of breaches, it is pivotal to implement proper management of your business continuity efforts (can save an average of $8.98 for each compromised record) and consider including a third party to ensure data security and operational resiliency (2014 Cost of Data Breach Study).
3. Business Continuity Measurement
Without a measurement system it is hard to identify whether or not your business continuity plan is effective in achieving its goals. Measurement systems make it much easier to understand the resiliency of your organization with the business continuity plan in place. In fact, according to a Continuity Central survey, only 15 percent of respondents were happy with the current business continuity measurement systems in their organizations.
In short, business continuity and disaster recovery plans are essential to all businesses. The lack of such a plan is the difference between customer loyalty and customer turnover.