I’ve been traveling again this week visiting hosting companies and ISPs in the Southeastern U.S. I’ve been talking to them about value, stickiness, and growth. One thing is certain, and that is they all have the same concerns… “We’re losing business, and we want to know what to do to stop it.” Or, “We are looking to find new avenues of growth so we are thinking about experimenting with our packages and offers.” These items bring me back to one word for everyone I have spoken to, and that word is value.
If you are a hosting company that is bringing on new business, but losing old clients to churn, you need to examine what you are doing today based on the perceived value of those clients that are leaving. I am going to make a statement that I am sure will make some of you say I am crazy and others agree. That statement is that Value in Web Hosting is NOT disk space, the number of email addresses you offer, or how cheap you are. There are companies out there today making good on cash flow numbers, but having a hard time getting or remaining profitable because they degraded their value proposition to prices, space, and stuff. You know what? The average end user has no clue what the “stuff” is. The average end user just wants a web site that functions the way they need it to. Occasionally you get the end user (and it will be more frequent in the coming months and years) that may require hosted applications, but the average guy, “like my Dad,” just wants to present his business online.
Do you know what my Dad is concerned with? My Dad is concerned with,
- “How am I going to get my Web Site?”
- “What am I going to do with my Web Site when it is done?”
- “Who is going to handle my Web Site for me?”
Do you know what confuses my Dad? Let me show you:
- 5GB Disk Space (Confusion)
- 200GB Transfer (Confusion)
- 100 Web/POP Email Box (Confusion)
- 3 Domains (Confusion)
- PHP, Pearl, Chili Soft, Python (Mass confusion and brain overload)
- Web Site Builder (Confusion, “Does that mean I have to do it myself or does somebody else do it?” He asked.)
None of those items offer the layperson (my Dad) value. None - whatsoever. He knows nothing about HTML, XML, etc. He knows nothing about Web Hosting. He doesn’t want to. He just wants a web site.
Now lets examine the things that were important to my Dad when I asked him:
- Customer Service (“I want to know that someone will be there to answer my dumb question when I have to ask it.” And, that they will give me a regular answer, not a computer geek’s answer.”)
- Reliability (“I want it to work. If someone fills out the form for X to send me an email, it should send me an e-mail.”) This is after I explained to him several different things he could do with a Web Site.
- Reciprocity – (“I want to guarantee this will work for me or I want my money back”)
I am going to add to his list. I think there are one or two items he didn’t mention that are worth mentioning here, then we will dissect them.
· Degree of post sale help (notice I did not say support)
· Reputation
I am going to stop the list here, as I think these are really the basics. Adding any more to it will start getting nitpicky and degrade the content of this article. So lets start the dissection process, and give some definition to “value,” shall we?
Customer Service. Lets rename it “Excellent Customer Support.” I like that better. It adds value to the word service. You need to be there for your Small Business client. They need you when they are working on projects like their Web Site. During the day they work, when they have time, they make their Web Site work. And when there is a problem, they want it solved on a “just in time” basis. Rather, they want it fixed when they pick up the phone to call you. Not three days from now. Have good LIVE support, and keep your automated attendant as SIMPLE as possible to minimize end user frustration. This alone will go a long way with them. If you can afford 24 x 7 service, by all means do it. I’m the guy that will get up at 3:00 a.m. and call to see if I get a live operator or voice mail. Trust me. You don’t want me calling to test you out… Get crazy about your support. Take a Clients first policy with it. Be over responsive. Build surveys around your support, post call with the end customer. GoDaddy is famous for this so that they get back the most valuable feedback they can. Build lasting value in your support to your customers. Make it excellent. Be responsive. Be kind. Don’t patronize them for their inability to understand. Do all of this and you will add lasting value and stickiness you never knew existed.
Reliability. Better known as uptime. You’re familiar with that, aren’t you? You have to make sure that whether you own your own network infrastructure or you outsource to a white label hosting provider that you have a rock solid SLA for both you and the end customer. They want to know that your network is up 24 x 7 x 365. They want to believe that there could be someone looking at their Web Site at any given time. And… If you just happen to be down, their impression is that they are loosing a potential visitor or visitors, and that there is potential business they are losing. And from that perspective, the blame is all yours. Period! This is a simple concept, I know. Yet to the SMB client, it is mission critical. Your uptime is their advantage in their minds…
Reciprocity. Laymen’s terms; 100% Money Back Guarantee. Small business owners want to know their hard earned dollars are not going to waste. And if they are, well, they want it back… Yes, back… There are so many hosting companies out there that do not offer this option, it is a great differentiator. It will offer your client piece of mind. A money back guarantee is like getting the free prize inside the box of cereal to a kid… It means no risk and all reward. What else do you think a SMB could ask for? Offer a couple of different Money Back Guarantees. Let the client know you are serious about their happiness. It goes back to your Customer Service. If it’s excellent, the Money Back Guarantee will not mean a thing to you in the end because you will not be parting with any money…
Degree of Post Sale Help. This is a critical time for my Dad. It is the time when he has pulled the trigger on making the purchase decision and wants to get going quickly to satisfy his craving for an end result. Most of my friends are the same way. When they buy the shiny new toy, they want to use it… It is no different in the Web Hosting arena. The SMB wants to now be “up and running” generating sales and or leads. That is why he or she are there. As my 8th grade Social Studies teacher Jim Rodda once said it, “businesses are in business to make money, that’s whey they do what they do.” That has stuck with me for years. My point, however is for you to offer some type of consultative service immediately post sale to help the SMB get up and running without hassle or stress to them. Post sale value, can keep the customer singing praise for months to their colleagues and friends about you… The question is, what’s that type of public relations worth to you?
Reputation. What type of reputation do you have for helping your clients in the past. This is something that can come back to haunt you if you stumbled along the way. With blogging and Web Hosting rating sites as public as they have ever been you cannot afford to have a bad reputation…
Your reputation also goes beyond your service levels… It goes hand in hand with your fiscal solvency. Fiscal solvency allows you to hire the support teams you need to keep your clients happy. Without it, well you are simply dead in the water. Not to mention, that it is much a harder to get out of the red, and back into the black to fix a damaged reputation than to work at keeping a good reputation should you have one. Work to be profitable, and more importantly work to stay profitable… It will come through in ALL facets of your business. Trust me, I know from experience, your customers will notice.
Other considerations.
Not mentioned in the above list because I think that you should already know this is scalability. Scalability will allow you to create upgrade options for your clients allowing you to increase RPU (Revenue Per Unit), and ultimately make you more profitable. As your business grows, and you become more sophisticated, so do your clients, many times… You will want to or be forced to add additional products and services to your model to both compete and keep your clients happy. When doing this never lose sight of the original three criteria I mentioned above.
Easy to use tools and interfaces are important as well… These can be found in most tools today from Hostopia, Plesk, Cpanel, and more. They too can make or break a client post or pre sale.
Remember, Hosting is not just about storage and bandwidth. Those words should be considered sins unless you are dealing with a technical individual who understands them. Are they important? Yes, I will not pretend they are not, but if you offer the value proposition correctly, then you won’t have to resort only to the “space and bandwidth” marketing concept which so many companies have fallen into the trap of selling.
