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Spending too much on upkeep for your website and applications?

How to Calculate Maintenance and Support ROI

Headshot photo of Marty Balkema, Co-founder of LOFT - the digital property management company for website and application management.

Some incredible quote from a customer who was able to free their team for higher value work that moved the company forward.

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Few leaders can afford to waste money...

Your website, responsive web app, or mobile application is a critical digital asset.

If you’ve invested in building one that powers your business, there’s a good chance you (or your boss!) are paying close attention to it.

What if you could re-invest the time and effort you’re spending to make backups, applying patches, and making updates into something even more valuable?

We can help!

If you’d like to think about ways to calculate your own ROI, read on. There’s a simple calculation and, a slightly more advanced one.

A simple way to calculate application or website support and maintenance cost ROI

Calculate how much you’ll spend each month and subtract it from how much you’ll save because you did.

  • If you currently spend $1,000 and you gain $1,000, your ROI is 0.
  • If you spend that same $1,000 on something different and it brings you $2,000, your ROI is 1. It’s a 100% return on your investment.

A real world example of thinking about ROI

LOFT provides three different subscription levels:

  • The Core Plan – for basic disaster preparedness and recovery, starting at $155 per month.
  • The Plus Plan – the Core Plan and ongoing patches and maintenance, starting at $295 per month.
  • The Pro Plan – The Plus Plan and up to Help Desk 12 tickets each month, starting at $395 per month.

If you decide on a Pro plan, you’ll multiply $395 * 12 to get a yearly cost of $3,660.00

Next, think through these questions:

  • what will it cost to get my site or application back online if it goes down?
  • how much user traffic will I lose if it is not online?
  • how skilled am I (or my team) at handling all of the backend, front-end, and dependent systems that make everything work?
  • what could I have my team do instead of making backups, patches, and updates?

If you hire and manage someone, what would that cost you? On the low end, it’s probably around $25,000. A LOFT subscription could give you as much as a 850% return on your investment because you’d avoid spending more than $21,000 to support your application or website.

More realistically, website maintenance and support usually takes higher paid people away from more important work that generates income. 

In the course of a year, how much money could you and your team make if you spent that same time generating revenue and not worrying about maintaining your company’s digital assets?

 

For less than the annual cost of another full-time employee or contractor, you can hire LOFT’s entire team of digital property managers to care for your company’s most important digital assets.

Free your team for higher value work…

Risk-free 14-day trial

Here’s a slightly more advanced way to calculate your support and maintenance ROI.

Follow these 3 steps:

  1. Calculate your current website support and maintenance costs
  2. Calculate your opportunity costs
  3. Calculate how much revenue or expense saving a subscription service will provide

Step 1 – Calculate Your Current Website Support and Maintenance Costs

Website support and maintenance costs are usually in three main areas:
  • Marketing Maintenance
  • IT Support
  • Management Oversight

We’ll calculate each of these separately and then add them together to get the total labor cost for support and maintenance.

Marketing Maintenance Costs

  1.  Write down the amount of time your marketing team spends making content updates to existing pages.
  2. Divide the average yearly salary of your marketing content manager by 2080 to get an hourly rate.
  3. Multiply the hourly rate by the amount of time you wrote down.

For example, if the marketing content manager spends 2 hours each week making adjustments to individual pages, your calculation might look like this:

Annual Base Salary / Hours per year = Hourly Salary

$50,000.00

2080 hours

$24.00 per hour

Time Spent * Hourly Salary

2 hours

$24.00 per hour

$48.00 per week

Monthly labor cost

$48.00 per week

4 weeks

$192.00 per month

In this example, the Marketing Maintenance Costs are $192 per month.

 

Information Technology Costs

  1. Write down the amount of time each IT team member spends (or should be spending) on website support. Be sure to include time spent:
    • documenting system architecture and changes ;
    • making regular backups for disaster preparedness and recovery ;
    • patch applications and dependency updates ;
    • database administration ; 
    • code updates ; and
    • internal customer support management.

  2. For each team member (technician, DBA, developer), divide the average yearly salary of each IT team member by 2080 to get an hourly rate.

  3. Multiply the hourly rate by the amount of time you wrote down.

For example, if your company has one IT technician who also spends 2 hours each week making adjustments, your calculation might look like this:

Annual Base Salary / Hours per year = Hourly Salary

$52,000.00

2080 hours

$25.00 per hour

Time Spent * Hourly Salary

2 hours

$25.00 per hour

$50.00 per week

Monthly labor cost

$50.00 per week

4 weeks

$200.00 per month

In this example, the IT Support Costs are $200.00 per month for the time allocated to the website.

We’ll add this to the Marketing Content Maintenance costs ($192 per month) for a subtotal of $392.00 per month.

Management Costs

Using the same formulas, calculate the time and cost both the marketing and IT management teams spend. These roles usually have higher salaries but their time commitments are often much lower.

To make things simpler, you might choose to take a “factoring” approach. 

For example, you might say the overall management cost for baseline application and website maintenance and support is 30% of the total cost. 

In our example, 30% of $392.00 is $117.60.

The total calculated cost for maintenance and support of this application is a minimum of $509.60 each month.

Other factors you should consider that might cause the total full-time equivalent (FTE) cost to be even higher include:

  • Non-salary costs like recruitment and retention costs, benefits, facility and equipment costs, and others that get added to a person’s salary as a “burden rate”.
  • Advanced roles that your team brings in (or would like to bring in) from time to time through the course of a year to help with you including software developers, database administrators, and consultants.
  • The cost of downtime because there wasn’t a current backup when something went wrong. 

It is common for a company to spend thousands of dollars each month to support an existing website or application that’s critical to their success.

Step 2 – Calculate Opportunity Costs

  1. Make a list of all the strategic priorities you have in your Marketing and IT backlog. Be sure to include:
    • whether each item is a “revenue generator” or “expense saver” and
    • the dollar amount each item would be worth this year if you could accomplish part of it.
  2. Put a checkmark next to each one that you can’t do because you don’t have time.
  3. Add up all the dollar amounts for the things with checkmarks.

This is the total amount of “opportunity cost” – the money your business doesn’t have yet.

Divide this amount by 12 to get a monthly opportunity cost amount. Then, add this number to the costs from step 1.

If our example company could unlock $75,000 of new revenue and/or expense savings by freeing up a day each week across Marketing and IT, the cost of maintaining the website for a year would look something like this:

 

Opportunity Costs

$35,000.00

12 months

$2,916.66 per month

In this example, our direct labor costs were $509.60 each month for specific support.

With the opportunity cost added, the total cost of managing the content and technical updates of an application or website in maintenance is $3,426.26 every month.

Step 3 – Calculate the ROI of an application or website maintenance and support package

This is the easiest part of the calculation!

Simply subtract your plan + add on costs from the total costs you are already paying each month.

In our example, the company should have a Pro plan (starting as low as $395 per month) for disaster preparation and recovery, scheduled maintenance, AND up to 12 tickets for content and minor database updates. They’ll also need to start out with 5 add-on hours each month ($500) to handle more in depth changes.

Our example company’s total subscription cost would be $895 per month.

$3,426.26 – $895 = $2,531.26 savings.

A potential 282% Return on Investment

Every month.

 

The leader who’s website or application is powered by LOFT redirects their team onto higher value

 

Does it sound too good to be true?

Call us to find out.

We’re professional Digital Property Managers and we’ve found a better way to provide ongoing maintenance and support for your business critical assets.

Free your team for higher value work…

Risk-free 14-day trial

Need help calculating your ROI?

If you’re not ready to schedule a kickoff call but you’d like a little more information about how LOFT can help your team focus on high-value work, fill out our contact form here:

 

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