In the hosting industry, it’s very difficult to differentiate yourself from thousands of your online competitors, or so some would lead you to believe. While some providers post relevant content on their websites, most simply offer packages – a certain amount of space, bandwidth, RAM, CPU for a specific price.
Does price sell?
Of course, price sells but you generally get what you pay for. Lower prices generally relate closely to overselling, leading to reduced server performance, slower downloads, and increased customer churn via suspensions or terminations for excessive use of the provider’s resources.
If a provider offers excessively low pricing, they must oversell their servers to turn the same profit as providers that don’t. So, math aside, why select provider A over provider B. It’s all about perceived value to the prospect. Value sells – it always has and always will. Every organization I’ve ever been in tells the same story, “We’re not the cheapest place in town, but we offer value and solutions.”
Who can you trust?
In the hosting industry, I read of providers going belly up way too often. Hosting forums are flooded with threads from members asking which provider to trust. The providers that survive are invariably the one’s that provide value.
So how does a prospect perceive value online? The answer is lots of content – relevant content that’s focused to specific needs, matching your core products and services to your online marketing and SEO strategies.
Quality over quantity
Prospects want to know that the hosting services that they’ll be paying for will match their requirements. In a way, this comes down to the quality of a solution versus simply exceeding specifications.
How would a prospect decipher whether your services are comparable to the last provider’s site that they just left? You can absolutely help sway the advantage to your firm by providing quality content that your visitors can relate to.
Are your services cheap or inexpensive?
Cheap can be construed in several ways. It can mean inexpensive, but it can also mean poorly made or designed. At issue here are search characteristics, determining the best keywords to be used in SEO strategies to optimize click throughs. Unfortunately, cheap is a keyword that is extensively used in search queries by prospects looking for hosting services. If you want to be found where your prospects are looking, you’re almost compelled to use the cheap throughout your site, or risk losing potential clients.
The flip side of cheap
While you want to maximize highly targeted traffic to your site, by using the keyword “cheap,” you’ll inevitably attract cheap clients. These aren’t always the best customers to attract. They’ll invariably eat up a disproportionate amount of support in relation to the services that they purchase. They also tend to come across as less professional and more demanding. Add to that, they also tend to flip easier.
Competing solely on price
There’s a downside to competing solely on price, and that directly relates again to cheap, penny pinching clients. While there’s nothing wrong with procuring the least expensive solution, we see members on web hosting forums increasingly asking for unrealistic specifications at ridiculously bargain basement prices.
There’s a thread featured now where someone is asking for a dedicated server with 128GB of RAM, a Xeon E CPU and unlimited transfer for (choke) $40. That’s simply not going to happen! The bottom line is that once you start competing solely on price, once your clients find a better price, they’ll be out the door, migrating elsewhere.
You need to match the services you provide to the infrastructure in place to provide those services, at a price point that facilitates sustained growth and profit. You can’t compete with the big boys, as a lot of them use loss leaders to acquire new business. So what’s your edge? How do you compete?
With thousands upon thousands of hosting providers already in the mix, it’s definitely harder than ever to be unique. Above all though, you need to remain true to your core values. It molds and shapes the culture of who your firm is, not just today, but for years down the road.
There’s a perceived value to every contact you have with a prospect or client, online or face-to-face. To prospects, very often that perception happens within seconds. To clients, this may improve or worsen over time depending on your support. Both are important, but your primary focus should be to retain your clients, minimizing churn. It’s so much harder to acquire new clients than it is to upsell existing clients.
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