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Web Hosting: New Approach

Posted by Anonymous on 250 Points
Hi guys,

I have been working in the IT industry for 10 years now and have around 20 clients - 99% of which came to me via word-of-mouth. I designed their websites and then provide the hosting.

I have, until now, managed my business more like a "hobby" for which I receive a nice passive monthly income from the hosting.

But now I would like to go into this field full-time, but I want to structure my packages in a different way. With any kid simply becoming a reseller, this market is really flooded, but I'm looking to change all that.

In the past, I combined web design with the hosting for a monthly fee e.g. $29 m/o - whereas the hosting package would cost about $9 m/o by itself. But this didn't prove too successful.

I even at one stage offered an all-in-one package for $79 a year, which included your web design (and updates) and hosting for a year. And again, this also didn't attract customers.

So I was wondering whether or not you could tell me what YOU would want from your hosting/design company?

Or maybe even point me to a site or forum where this topic is discussed...

Thanks so much for your assistance!

  • Posted by mgoodman on Accepted
    So have you concluded that the problem was pricing? Or is it possible people didn't really understand the benefit?

    Very often in cases like this the real problem is that your marketing and sales approach were not right. Perhaps you were too focused on being price competitive, so you didn't first sell the high value of the service(s) you offer. When people don't understand the BENEFIT, they look at the price and say, "I don't think I need [to spend my money on] this."

    Or perhaps you were presenting the service to the wrong target audience. Are you sure your offering was exactly right for each prospect? Did you take the time to find out what their biggest problem is, and how you solve that problem? Or did you have a one-size-fits-all sales pitch that missed the mark with most of your prospects?

    Before you try to reinvent the product from the ground up, make sure you've identified the right problem.
  • Posted by Jay Hamilton-Roth on Accepted
    My guess is that people came to you for a website, and stuck with you as as hosting provider/reseller since it was easy for them. But how many of these clients are actively updating their websites? How many of them should upgrade to better technology (CMS, for example)? What problems are your clients still having - that you can help with (email spam protection, DNS attacks, backups)?

    As Michael suggests, you need to better understand the problem your (prospective) clients are having, and then offer the right solution, at the right price, to take care of them.
  • Posted by Moriarty on Accepted
    I don't think the issue is money. As the other two say, there are other things afoot.

    Why did your current clients come to you? Why have they stayed?

    As importantly -

    Are new ones coming?

    A final thought: why are you so cheap? Surely you should be charging $75 an hour for this kind of thing. That way with fewer clients you can make a real living.

    an answer: What do I want of a hosting company? Well having been onto mine this morning, one that doesn't always call me "sir/madam" for a start! They are good enough and guided me around the intricacies of my .htaccess files - and I discovered where I could edit it myself with a little digging into my databases.

    Now: who are the people YOU want as clients? You have some, so divide them into "like" and "don't like" as well as "don't mind either way". Work out what it is you like - and don't like - about them and form a picture of the client you can most help. Send them all an email with a question "What do you like about my service" (as open-ended as possible). Some will respond and some will respond with what they don't like too. All this will allow you to tailor yourself to what you do best and who you do it for.
  • Posted on Author
    Hi guys, Wow! You have really opened up my eyes to the real issue. I can tell you that what set my service apart was my hands-on, personal approach. I know all 20 of my clients personally and even know their family, business associates and friends. When a client phones me about an issue, I do not need them to "authenticate" their identity - I know them and they trust me. But this is because I have worked with them for years now...So, my question would be - how do I "market" this to new customers who do not yet know me...It is not as if I can show that I have won "10 International Friendship Awards"...

    To answer your question about my prices...I have really walked the extra mile and I do provide quality, professional services. As I said in my original post - in South Africa (where I am from), almost every second high school kid has a Reseller Account and can therefore offer "web design & web hosting" - some are great in what they do, but others really give the IT field a bad name...anyway, this is why web hosting & web design has become such a "price war" in South Africa...Companies will pay a kid in high school $500 for a large website, rather than pay my legit web-based company $5000...

    But here is the main thing which I have seen...Many people have websites in SA, but almost 99% of them are not updated, as they simply do not know how-to...

    Therefore, I feel I should concentrate on "marketing" an all-in-one solution, where I will host and manage their websites, thereby reeling in customers who already have websites (but don't know how to update them) whilst also getting customers that still require a website (which I will then also update).

    How should I then structure such a package and what would be an "acceptable" monthly fee? In other words - how much would YOU be willing to pay for such a service every month?

    Or should I have three packages - each with their own disk space size, bandwidth etc. and number of hours per month (maintenance)?

    Love to hear from you. And thanks again :-)
  • Posted by Jay Hamilton-Roth on Accepted
    Instead of focusing on everyone who has a website, focus on those people/businesses who really would benefit from your level of service. If your existing 10 are such fans, then it's time to enlist their help - testimonials and case studies. How much does downtime cost them in missed business? How much does incorrect information cost? What about technology updates? Think of your services as insurance - it's not a question of IF they'll have problems, just WHEN. So, focus on your message on showing how you increase business peace-of-mind as your key benefit. Anyone can be a reseller, but not everyone can fix a problem ASAP and get it right the first time.
  • Posted by Moriarty on Member
    Right. Let's start with the bad news: "anyway, this is why web hosting & web design has become such a "price war" in South Africa...Companies will pay a kid in high school $500 for a large website, rather than pay my legit web-based company $5000..." - which is fine.

    My retort to the guys who think that this is a great way to get a website up is this: how much does it cost you when it goes wrong? How much does it cost you in other ways because it doesn't work the way you want it to?

    My point is that with a price-war of this kind it is really easy to step to one side of. I know a guy in Johannesburg who does all his (adwords) work for the US market - with around 1-2% coming from ZA.

    How to get around this: (1) Offer a guarantee. Make sure it is punchy and sets you apart from the crowd. (oh, and come up with two more because they will all copy you*)

    (2) Tell something about yourself that is bad. Yup. Because no charlatan ever says anything bad about themselves, it's all pretty pretty with roses around the door. No thorns in sight. My guess is that you're so good that you don't have any bad references - I was in the same position and it took some squeezing of friends to find out what they didn't like about me!

    Again, this sets you apart from the crowd. Those who can trust someone who demonstrates their honesty will come to you. Those who would whinge and fuss - and not pay well - won't like this sort of talk and will walk away.

    What you need to do is offer three levels of YOUR SERVICE. Forget the technology - we are talking humans here. Technology is nothing without someone to drive it. Which is where it gets tricky for me because I don't know much about web designing. Take a look at different sites (especially the US ones where competition is fiercer than where you are). See what you can do that is better than the boys from Bangalore. For one thing you have your "hands on" mentality. For your top selling packages ($100's per month) you can have a personal telephone answering service. Just make sure that their systems are *really* well kept up and they aren't the kind of people who will ring you in the middle of the night ;-) Sometimes it happens. Tough. It's your job and you are making good money doing it, just take the next morning off!!

    (*they will copy but not hand out on their guarantees - that is when the opposition starts decimating themselves).

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