Lasting impacts of software failure and poor application performance

If a company builds its success on technology, software failure and application downtime can have far reaching consequences. For example, a popular dating app recently experienced unexpected downtime and temporarily deleted user matches. This event caused uproar among consumers. In a time when user experience is of paramount importance and short attention spans make the average person impatient and unforgiving, the consequences of delivering a sub-optimal level of service can be dire.

Even when an issue is corrected quickly and disruption in the overall scheme of things is minor, the long-term cost can be significant. Perfecto Mobile’s CMO, Christopher Willis, offered a perspective on some of the potential fallout of widespread app failure for businesses. Companies that build an app as the core of their brand—and all organizations that rely on apps to engage and keep customers—should pay heed. Here are the top seven ways businesses end up paying for an app failure.

1. Loss of usage

If a company is hearing about their app outage on the news, things have already gone way too far.

Christopher Willis
Perfecto Mobile CMO

If an app isn’t usable, it’s not driving revenue for the business. "Whether it’s about paying customers or pay per click advertisers, most software-based businesses know how many dollars they should be deriving from app usage per hour. It’s pretty easy to do a calculation of average revenue per hour times the length of the outage to determine this cost of an app failure. But that’s just scratching the surface. There’s much more to lose."

2. Making it right

This cost can vary depending on the perceived loss of use and loss of revenue for users and clients. In reality, it’s about recompensing them for pain and suffering. Businesses that want a shot at retaining loyalty must be prepared to shell out refunds, freebies, discounts, and other perks to bring angry customers back to the fold.

3. Bad reviews in app store

A faulty rollout or upgrade can easily scare potential customers away from downloading even a well-respected app. In some cases, the bigger they are, the harder they fall. A popular app might be hit with thousands of negative reviews in a short time period, leaving a black mark on their reputation for a long time.

4. Losses to competitors

The vultures are definitely circling whenever a brand leader gets a black eye due to an app outage. They are eager to capture market share by enticing customers away from the "faulty" app to their own solution and by positioning themselves more strongly to attract the undecided user base.

5. Brand damage and bad press

Not all press is good press. It doesn’t take much to link a negative term to a particular product or service. For example, many people associate a particular model of automobile with the word "explosion"—even if they weren’t around in the seventies. In the same way, an app can be labeled as "buggy" or "unreliable" based on a shared experience that touches the popular consciousness.

6. Stock dip

This is where things can really start getting dicey. Once user trust erodes, shareholders begin to feel the pain as well. Just when a business needs to spend more on marketing and consumer relations to rebuild that trust, they may find themselves in financial free fall.

7. Loss of faith in IT

Perhaps the most harmful impact for a business is one that the outside world rarely sees. This is the attitude of the organization toward the team that is responsible for developing and delivering the app on which the business is built. "If there is a feeling that the internal team can’t handle the job, that leads to outsourcing of app projects." For a company that is built on software, outsourcing this core aspect of the business may be a huge blow to the brand.

How to avoid these performance pitfalls

How can hidden issues be brought to light in time to avoid disaster? Willis offered several suggestions for businesses that want to sidestep user backlash and the domino effect of negative consequences. First, they must implement monitoring so that they can spot a problem and address it sooner rather than later. "If a company is hearing about their app outage on the news, things have already gone way too far." This monitoring should cover everything that affects the user experience, including data calls and connectivity. Anomalies should raise a red flag immediately.

Second, companies must be willing to communicate with users early, often, and with great transparency. If users know what to expect, they may grumble but are much less likely to become irate. Finally, organizations should look to their development, testing, and marketing teams to identify new areas of testing based on user personas.

Knowing who typical users are, what devices they use, how and where they use the apps, and what aspects of the experience are most important to them should inform testing to ensure quality. Deploying additional testing measures may well deliver ROI by preventing the next PR disaster. That’s a hidden savings, but a real one.

What has your organization done to ensure performance and reliablity? Let us know.