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  Post #1 (permalink)   12-03-2009, 02:28 PM
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I just read a post on Seth’s Blog about embracing lifetime values, and was immediately able to relate this to any number of industries. When I was selling security systems in Miami, my employer had years of data highlighting the lifetime value of every new client. Think about it – who changes alarm vendors once the system is installed? Their monitoring ran $24.95/month, but clients routinely stayed with them from six to seven years. Value adds were additional motion sensors, control panels, remotes and door contacts.

Is there a lifetime value in web hosting?

I wonder how many sales or support reps understand the real value of each shared, dedicated or colo sale, and how that drives the business as a whole? In the post, the lifetime value of new cell phone clients (on two year contracts) was estimated at $2000.00. I’ve been with my cell phone provider since 1997, and have grown from one to four phones.

What do you estimate the lifetime value is (on average) of a month-to-month dedicated server client? What about the new 2U colo client, who someday grows to a full rack or a cage?

Could you increase your client’s lifetime value?

The answer is, absolutely – under promise and over deliver. Empower your staff, from sales reps to the billing and support departments, to go that extra one percent in every contact they have with each client. Your goal should be to exceed your client’s expectations. This is the stuff of long term business relationships.

Bottom Line

If one of your clients left in a huff, would you surmise, ‘there goes a $20 client’ or ‘we just let $2000 walk out the door.’
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  Post #2 (permalink)   12-03-2009, 04:08 PM
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Another top notch article to think about things! So many people think of hosting as a month to month "product" when it should be treated as a "service" which can potentially be on-going. Too often we see a customer who was paying $5/month upgrade to a $35/month package or upgrade to VPS or Dedicated Server and then into clustered servers. The success of a hosting company many times falls on the success of the customers they host. If they go out of business, WE can potentially go out of business.

Great article and summary!
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  Post #3 (permalink)   12-03-2009, 09:21 PM
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The lack of any measure of this, is a reason why many hosts fail to budget their advertising properly as well. They think about the immediate profit, and fail to account for the long term. Then again, no one really knows if the hosting industry as we know it will still be around 5 years from now.
 
 
 


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  Post #4 (permalink)   12-14-2009, 03:18 PM
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This is one thing that I noticed about my company when I was hired, that really set them apart from the other prospects out there. Thinking long-term is tough in the hosting industry, with technology changing quickly, etc. But these guys were giving huge discounts and deals for the first month or two that were getting people in the door. We've really managed to continue growing despite the economy being what it is, and I really think this is a lot of the reason why.
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  Post #5 (permalink)   12-15-2009, 08:56 AM
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Getting people in the door is the hard part. Keeping them is the do or die part - managing churn.
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  Post #6 (permalink)   12-15-2009, 04:56 PM
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I hadn't ever read anything like this and I am totally shocked at some of this. I have a new perspective on many things after reading this. I like the way you put it in terms of $20 or $2000 as well. Great articles and thoughts here.
 
 
 


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  Post #7 (permalink)   12-20-2009, 03:04 AM
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I think people would be the best judges about the services they are receiving and actually buying from the hosting firms. Regardless of the types and volumes of reviews posted across the net, the potential buyers would be evaluating the sites from a variety of aspects and then listen to what others are saying about the packages. Truly the happy customers may not even think of shifting to another company.
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  Post #8 (permalink)   01-21-2010, 11:43 PM
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Quote:
Originally Posted by bermuda View Post
I think people would be the best judges about the services they are receiving and actually buying from the hosting firms. Regardless of the types and volumes of reviews posted across the net, the potential buyers would be evaluating the sites from a variety of aspects and then listen to what others are saying about the packages. Truly the happy customers may not even think of shifting to another company.
I couldn't agree more. Our customers are our best judges!
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  Post #9 (permalink)   01-22-2010, 04:22 PM
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Quote:
Originally Posted by arbet View Post
I couldn't agree more. Our customers are our best judges!
As a follow up, do you measure their satisfaction with your services, and project that into life value to your company?
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  Post #10 (permalink)   02-06-2010, 08:23 PM
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Hi,

It actually depends upon the quality of the service you are providing to your clients and how they are satisfied with you.
 
 
 
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