A couple of weeks ago, I was doing my competitive analysis talking to a company via their live chat.
While asking about their services, I noticed they didn’t offer Reseller Hosting.
When I asked why they didn’t they told me they would do whatever I needed, even though it wasn’t listed on their website.
I thought – that’s certainly making a deal with someone!
Most Startup Web Hosts Don’t Have A Business Plan
Having a business plan is an essential to becoming successful with your startup. Without one, you’re all over the place trying to scramble for business.
I completely understand you want customers in your business! Money is tight with any startup, so when you have someone interested in buying, you want to try your best to accommodate them!
However, you have to be really careful with this, as it’s not a smart idea to give your customer’s control over your business.
You Are The Only Person That Knows Your Business
Your customers (or potential customers) don’t know your business plan. They’ve been taught to negotiate and get the lowest price possible.
The web hosting industry is fierce with competition, but if you’re always trying to beat the next company’s price, you’ll eventually find yourself losing money.
When you’re developing your business plan, you need to include in it what type of promotions you can afford to run and how long you can run them.
You Can’t Be Too Nice
One of my biggest downfalls as a businessman is I’m a nice guy; I hate conflict and I want to please people (especially my customers).
Unfortunately in business, sometimes you have to be the “bad guy.”
Daily I receive sales inquires for potential customers. A lot of the conversations go the same way.
“I can only afford $X a month – so what can you do for me.”
I always followup with, “our best price is $Y and unfortunately we cannot accommodate custom requests.”
When You Do It Once You’ll Have To Do It Again
A while back I gave one customer the benefit of the doubt and extended the date their invoice was due.
They had expressed to me, because of the upcoming bank holiday, they would be unable to honor their payment on time.
Being the nice guy, I extended it. They paid and all was well for a while. A couple months later, they asked for another extension. I did it. Once again, time to pay came, and they wanted another extension. Unfortunately I then had to become the bad guy.
I’ve now implemented a new company policy, that invoices are never extended under no circumstance.
Don’t Mistake This For Poor Customer Service
We’re known at Name Hero for our customer service and customer satisfaction. I strive for 100 on our NPS (The Net Promoter Score) and stay up at night if we fall short wondering what I could have done differently.
Unfortunately, some customers are impossible to please no matter what you do.
At Name Hero, we’ll do everything short of taking our shirts off our own back to help out our customers. Even if it’s something we don’t support – we try our darnedest! But some requests, such as offering custom packages, price matching, etc. don’t fit our business model and we have to turn business away.
Strive To Be The Best Company You Can Be
It’s a real catch-22 sometimes – especially when you’re striving for that 100 NPS – but that’s business. Back to my competitor’s live chat I mentioned at the beginning, that’s great they’re willing to roll the red carpet out for me, and accommodate whatever request I have, but what happens when they get really popular and everyone starts doing this?
Eventually they’re going to find their breaking point. If we fall off our business plan, how can we continue to grow at the rate we are growing, remain profitable, and debt free? I must remain in control over the company, not the customer.
For those of you just starting your Reseller Hosting business, take my word from experience, you want to treat your customers well, but your prices are sometimes what they are and you can’t always be the lowest (there is always someone willing to go lower).
Ryan Gray is the founder and CEO of NameHero, one of the fastest growing independent web hosts in the United States. Ryan has been working online since 1998 and has over two-decades experience in Internet Entrepreneurship.