Educating Your Customers:  Risk Management + Disaster Recovery

Natural disasters pose one of the biggest threats to your customers’ business operations. Even though there is no way to predict exactly when they’ll strike, the chance of hurricane, tornado, flood or fire occurring is probably much higher than you might think. Helping educate your customers on the type and frequency of possible threats can not only help illuminate an opportunity for better disaster recovery planning, but can also solidify a more consultative relationship with your managed clients. These kinds of customer engagements can drive stickiness and increase perceived value, as well as justify a higher monthly fee.  

Research compiled by the Insurance Information Institute provides some interesting perspective on the frequency of natural disasters and the losses organizations incurred in 2016. 

According to the data, there were a total of 91 natural disasters in the United States in 2016, resulting in $23.8 billion in insured losses. That’s up from the $16.1 billion calculated in 2015.

·       Severe thunderstorms accounted for the highest number of catastrophes at 43, costing businesses $14 billion in insured losses.

·       A total of 19 floods and flash floods resulted in $4.3 billion in insured losses.

·       A total of 18 wildfires, heat waves and other heat-related events resulted in $1 billion insured losses.

·       A total of seven winter storms and cold spells resulted in $1 billion in insured losses.

·       Although there were only two tropical cyclones in 2016, the damage was severe enough to cause $3.5 billion in insured losses.

Also according to the Insurance Information Institute, the first quarter of 2017 was the most costly first quarter in terms of insurance losses in 20 years (when the 1994 California earthquake occurred). With a bad wildfire season in the Western United States and devastating hurricanes in the Southeast, the second and third quarters will be costly, too.

Despite their frequency, natural catastrophes aren’t the only disasters you and your customers have to worry about. Natural disasters represent only a fraction of total data loss across the board. The rest is attributed to instances such as data corruption, system failure and human error. In fact, hardware failure is responsible for half the downtime that small to midsize businesses experience.

When Risk Management Meets Disaster Recovery

In an ideal scenario, business continuity planning will help prepare your customers for every possible disaster and allow you to assist an impacted client to quickly resume regular operations when the unthinkable happens. Unfortunately, ideal scenarios and real-world scenarios are two different things. While it sounds good in theory, trying to protect against every possible catastrophe is cost prohibitive and therefore impractical for most businesses. Helping your customers plan for the most likely disasters makes the most financial sense. In order to do that, advise clients to incorporate a risk management component into their disaster recovery strategy.

Risk management assists in spending wisely by investing budgets in disaster scenarios that pose the biggest threats to the business. For instance, if a data center is located in Southern California, then earthquakes are a legitimate concern. On the other hand, if you’re in the Northeast–for example, in Maine–then snow storms are something you should plan for during the winter months. 

Whether risk management efforts uncover one type of event or another, there are certain disasters every organization should plan for. Educate customers on the importance of  security (both physical and IT-based), data backup and testing being cornerstones of any disaster recovery plan. When onboarding managed services clients, remind them that solidifying a commitment to security can help prevent disasters, while a best-in-class backup and recovery plan is essential to being able to rebound when disaster does strike. Build in periodic tests for some or all customers within your offering to make sure staff is prepared and data can be recovered–because just a plan itself is all but useless.

You never know when disaster will strike or in what form. What you can do is anticipate the biggest risks for customers and help them prepare for the worst. At the end of the day, disaster preparedness is the key to disaster recovery.

This guest blog is part of a Channel Futures sponsorship.