Clients.

Artashes

Artashes

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A question would eventually come back to the way you market yourself (the objectives you have set when you decided to venture into this business), but here it is anyway:

Would you rather have a bigger base of low-profit customers or a small base of high-profit customers?

Best,
 
Greetings,

Smaller base of higher profit, well educated customers. It's been almost 10 months that we've added a setup fee to all the plans. This didn't even reduce our client base, in the same time we saw an increase in client base.

On other hand, this is more beneficial for the company in short as well as long run, since there will be more time to dedicate to improve your services and better serve your current customers rather than getting cheap customers that you have to put a lot of time, actually teaching them basic command of HTML, uploading and etc.

Basically you get a lot less trouble-making customers from well paying clients. They wont bother technical team with very basic questions, less demanding. They just require a very good uptime and quick answer to their inquiries when its urgent, whether via phone or e-mail.

PS: No offense to those valued people who are paying few bucks to their hosting providers.

Bests,
Amir Golestan
 
If I had to choose extremes: smaller base of higher paying customers.

I personally haven't found that higher paying means higher educated. I have found that, for the most part, if people are actually paying what they consider real money for a service, they will tend *not* to think of the service as disposable / interchangeable. I do have clients that initially need handholding, and that's not a problem - because they tend to ask once and, if the answer's provided well enough, they don't need to ask that particular question again. The support documentation is thorough, we're always adding tutorials and articles, and we get good word of mouth advertising.
 
Personally, I would go with higher profit, lower client base.

It allows you to manage your clients better, while still permitting company growth. Not to mention, it will help in decreasing the load on your servers.
 
The higher profit, lower client base as mentioned over and over already for various reasons. One, would hopefully be that the higher paying client would understand that s/he is paying for service and quality rather than just a small partition, rather than the lower paying client who expects the top notch service and unlimited transfer for $2/month. *Sigh*
 
Okay ... I am a wee bit confused. Again ;)

What do you guys view as "lower client base, higher profits" & "bigger client base and lower profits"?

For instance ... hypothetically ... a customer has 2.5gb space & 30gb bandwidth. Realistically, I would think that space would be worth $30 to $40 USD per month. But I have seen the same specs offered for far less and at other sites for far more per month. So would what I feel those specs are worth ... would they fall into the "higher profits" or "lower profits" category? Or is that a happy medium between the two?

Maybe my knowledge of the industry is totally lacking ... but the question posed seems very subjective. Like ... what I feel might be a "lower client base, higher profits" might be considered as being a "bigger client base and lower profits" by someone else ;) Know what I mean?

Just my uneducated :twocents: worth
Peter
 
By higher/lower I'd place these classifications on:
The higher paying client pays more per GB of transfer while the lower paying client pays less per GB of transfer.

Say, 20cents/GB transfer vs. $1.25/GB transfer.
 
I'll use Las Vegas as my reasoning. I believe Las Vegas gets most of its money from its nickel, quarter, and dollar slot machine players. Using this reasoning, I would like to have a client base of many, low-paying customers.
 
In my situation it would definitely be small base high profit, but I don't think this must be everybody's choice.
 
webfreak08 said:
I'll use Las Vegas as my reasoning. I believe Las Vegas gets most of its money from its nickel, quarter, and dollar slot machine players. Using this reasoning, I would like to have a client base of many, low-paying customers.
Click to expand...
Hmmm...this thread is really making me think. After thinking it over, having a small client base that will make a higher profit seems like a better choice. After re-reading the posts, I have changed my view. Las Vegas is Las Vegas. The hosting industry is hosting industry. They're different.
 
a larger clientbase of high-profit customers ;)

Both have their merits, we tend to focus more on serving business so gain less clients, but charge a higher ticket price for increased service and reliability.

The downside is that when you lose a large client for whatever reason, there is a noticable effect on teh cash-fow/income which you wouldn't see with a larger clientbase, where each paid less and therefore contributed less to the finances.

Which would you rather run - Bentley and hand-make 100 cars a year or Ford and mass-produce 10 million ?
 
High profit customers tend to be more loyal than low profit ones. This category of hosting customers rely their business on you as their host. Provided that you provide everything they need to do business online there is little chance of loosing them.

I think they are the best hosting customers you can have, as a positive comment from such a customer really counts. Of course you could argue that high profit customers might not have business related website or a popular one, but this is the type of customer I would describe as ideal.
 
smaller base of higher paying customers

If your site is geared towards low paying customers, well they will be cheap and always demanding the most for the $$.

If your site is overly expensive, kiss many customers goodbye.

Can't please them all but I've found diversity to work well. As in different packages geared towards different users.

It's best for high margin products with low overhead!
 
We cater to small to medium sized companies, so we lean more towards the smaller base/higher profit hosting. It allows us to give fast, personal service, at a price we can afford. In return, we have great customer retension.

I do agree that for kids, and other personal sites, in which there is a large market, the lower cost, bigger customer base is also a good business. However, you will find a lot more turn over in your customer base, because from what I have seen... the less they pay, the more they expect.

Let's face it, you can't give cadillac service at moped prices. They seem to want it anyway. For our business goal, we found it best to not even think about competing in that market.

However, in both cases, it will take marketing to the proper people to grow.

Tim L
 
Hi, I think Im going to start my own web hosting company. I would like to get a lot of customers, but not try and advertise too hard and not spend a lot of money. Does anyone have any suggestions on how to get clients with out advertsing too intensly? I mean, Im only a teenager, so if I put ads at the supermarket etc, people would call me then hear me talk and hang up. Please leave suggestions
 
Your best bet might to be just to hang around on forums and do online advertising. I couldn't tell you how to get to the "profitable" point with little to no investment. It will take time, patience, and SOME sort of investment. A reseller package is a good place to start and then move to a VPS/Dedicated then colocate your machines.
 
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