How changes in the web hosting end user market will affect your business

October 10, 2006 at 9:38 pm Leave a comment

by Rodney Ringler 

One of the hardest tasks facing any web hosting company is stumbling on a winning formula that drives sales and accelerates company growth through a healthy cash flow. Some hosts arrive at this stage with a rough idea of the ingredients used in their recipe however rarely are they able to pinpoint the exact reason. A multitude of reasons and factors contribute to the success of an individual hosting company’ success and once you have a vague idea of the factors which have made a positive effect on your business, it’s hard not to blindly repeat those practices in the hope of continued success.

What this article aims to do is explore some of the recent changes in the hosting market, the behavioural pattern of consumers and predict trends which can be used to examine your current practices. If you have a clearer idea of ‘why’ something you are doing is successful, you can be confident in being able to adapt the way you do things when the underlying factors change. Stumbling through with no idea of why you are currently successful can only lead to pure frustration when what used to work to perfection suddenly starts to yield drastically poor results instead.

The key change in the market is that hosting consumers today are overwhelmed by more choices of services and suppliers than they could ever possibly use. What this means is that a company with a quality hosting product (e.g. Tier 1 network, top grade hardware and software investments) is still not guaranteed to sell their product. In order to succeed, the host must be clearly able to differentiate their company and service. That means understanding the modern customer and throwing away what you ‘used’ to know about selling.

Through overexposure the average consumer has become used to ‘aggressive’ sales techniques from years gone by which are still used today by many hosts. Anyone with a basic background in sales is taught two basic rules.

1. Never ask a question that allows the customer to easily reply with a ‘No’ – always a ‘Yes-Yes’ question thus getting them to accustomed to saying ‘Yes’ in preparation for the close.

Here is an example:

We have this amazing deal that can save you money on your hosting bills! I’m sure you’d love to save on your hosting right?

Any simpleton can see that the idea is to make choosing the ‘No’ option embarrassing for the customer. That is to say anyone who says ‘No, they don’t want to save on their hosting bills’ is clearly an idiot. Unfortunately through over exposure the customer recognizes this as a sales pitch / technique (even though not consciously aware of it. Mentally the result is apathy towards the sales person and resistance to the close.

But die hard sales professionals will claim that this is part of Sales & Marketing 101! The only answer to that is that customers have evolved and thus the sales professional and the companies themselves will need to change. Some methods may have worked a treat in the past – but that doesn’t mean they will work forever. The second basic rule is demonstrated below:

2. Create a sense of urgency to prompt the customer into action. By putting a time limit on an exclusive deal or insisting the supply of the hosting service won’t exist for long you are forcing the customer into purchasing. An example for this clearly not needed since we are bombarded with such offers through television, Internet, radio and mail day and night.

Unfortunately as mentioned before, the customer through overexposure knows that there is no real need for urgency. That the same deal WILL be available tomorrow and that perhaps an even better one might be available. They have also learned to shop around.

The mentality with most hosts today is ‘what’s in it for me?’ and this mentality leads to aggressive marketing with principles such as the above being utilized. To sell to and subsequently acquire a modern hosting client you need to change the mentality of your approach completely. The client of today no longer wants to simply buy a product; he/she is looking for a long-term relationship with you. They are looking for quality that can be measured. Let’s answer the ‘what’s in it for me?’ question with regards to building a long term relationship with your client. A hosting company that thinks only about the short term is interested only in making the sale, and then proceeding to making the next sale and so on. It doesn’t matter how the client is acquired as long as the client is acquired. These hosting companies will engage in sales and marketing tricks like above and the result will be consumers will adapt by learning how to avoid getting trapped by the hosts. It’s clear that this is already happening.

In such a situation, place yourself in the shoes of the consumer. Would you be willing to give such a company referrals? Would you want to repeat the sales process? How committed would you be to maintaining a relationship with your host? At any hint of trouble with billing or any other facet of hosting, you will be complaining to the host and posting these problems on public forums. The idea is to think long term and put the customer in a position where THEY are concerned about your profitability. Because they are happy with the actual sales process and have the basis of trust built with you, they wish you to remain stable and viable when it comes to renewing their plan. Thus, referrals and commitment to making the relationship work on their part is more forthcoming.

The key to success is spotting the changes before your competitors do. Technological changes mean nothing. Introducing a new feature to your plans or reducing prices can be matched in literally days.

About the Author
About HostChart.com Hostchart is a leading web hosting directory website that has been in business for over 5 years. They provide numerous web hosting articles and tutorials as well as news, interviews, and reviews. You can use their extensive set of tools to research and evaluate your current or future web hosts.

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Entry filed under: Web Hosting.

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