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Hosting Discussion > Web Hosting Forums > Web Hosting Reselling > Dealing with local clients- moneymaker or minefield?
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  Post #1 (permalink)   01-26-2008, 06:46 PM
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I wanted to pick up on Artashes astute comment in AbbieRose's thread Reselling Without Web Design.

Quote:
That's a smart observation, but reseller hosting still represents a major chunk of the whole industry. In my opinion, it all comes down to how good a marketer you are.

If you know how to reach local businesses in a smart and cost-efficient way, then you will sell your services well. On top of that, resellers who go exclusively after their local markets usually price their services higher in order to earn more.

Chances are local businesses are not technically savvy, so they won't go on research rampage. Most of them care more about where you are geographically (same town, community, etc) than the number of POP3 email boxes you'll offer them. I have seen companies pay as much as $25-75/month for 25 MB of space and 500 MB transfer allotment to this day.
I never really considered that would be important to them but it makes sense that you'd want someone close by where you could knock on their door if necessary. I know I wouldn't have minded doing that myself a few times over the years instead of waiting endlessly for a response to a support ticket.

My question is this and I ask it with all due respect. You can charge higher rates as ArtAshes says but is it worth the aggro that surely must be a part of being physically so close by?

I'd love to hear of some experiences or thoughts on this from both the reseller side and as a client. Looking at it as a client, I can see the obvious plus would be what I said above. Essentially, convenience. Sometimes it's much easier to communicate face to face and it would be nice to have that option.

But as a reseller, would I really want someone knocking my door or calling me at 3am that thinks that's ok since I'm only a block away instead of utilizing the standard contact methods everyone else does that doesn't live in my vicinity?

I hasten to add I'm all for excellent customer service but where do you draw the line? Or do you look at it as a trade-off - when you charge higher rates locally to non-technical clients, you have to expect to spend more time explaining and handling things for them.

Questions, questions.

Last edited by Hannah : 01-26-2008 at 06:49 PM.
 
 
 


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  Post #2 (permalink)   01-26-2008, 07:02 PM
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It all depends on your service. If you are (as you said) very good with customer service then you will keep those customers happy, and the local market will spread. Sadly the exact opposite is possible if you have less than optimal services or less than skilled buyers. Overall.. there are a few positives, but lots of negatives.
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  Post #3 (permalink)   01-28-2008, 07:08 PM
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Quote:
Originally Posted by SoaCahToa View Post
It all depends on your service. If you are (as you said) very good with customer service then you will keep those customers happy, and the local market will spread. Sadly the exact opposite is possible if you have less than optimal services or less than skilled buyers. Overall.. there are a few positives, but lots of negatives.
That's true of course, SoaCahToa. The skills of the reseller will come into play here not just in the capacity of technical ability but as a negotiator and customer service. While it would be great to sit down together at a table and get the more personal connection that's not so easy online or over the phone, I just wonder if it'd be too personal. And we all know how damaging word of mouth can be to a business whether it's deserved or not. Good point!

Thanks for your comment.
 
 
 


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  Post #4 (permalink)   01-29-2008, 12:16 PM
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I have found our local market to be very lucritive over the time we have been in business.

There are services that we offer to local clients that we don't offer online.

We actually don't treat local clients any differently than we would global/online clients, as far as price is concerned.

In fact, it's one of the things that makes our services so popular among local clients, because our competition charges so much more, while we're able to sustain our business by charging the same amount we would charge all clients.

Now, keep in mind that when it comes to software or website development for local clients, local clients are more willing to spend the money, because you are there. You are and can be face to face with them.

We have a particular client in which we have been to their offices over the course of 2 weeks more than we have been at our own, due to an internal network problem they're experiencing, which is keeping their new website from loading for them.

Although they're having this issue, they're extremely happy knowing that we have no problem coming to their office on a whim to check in, and work on the issue for them.

Many online customers that don't have this access to your staff, will more than likely leave to find a new host, thinking that it's your hosting that is the problem.

Another issue is that online or global clients really only have the benefit of reading the words you type, and as such cannot tell if you're being honest with them, and will usually assume that you're not. Then, on the complete opposite side of things, local clients standing face to face with you, can almost read you, and know that you're doing everything that you say you are to help with any issue they're having.

Overall I find more benefits with local clients than I do with global clients.
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  Post #5 (permalink)   01-29-2008, 04:01 PM
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One quick item for Hannah: Local customers do not behave any differently than other customers. They tend to be less technically savvy, but that explains a higher premium. You expressed concern about having them "knock on your door" and that simply doesn't happen. After doing this for several years, we have found that local customers are extremely lucrative and loyal.
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  Post #6 (permalink)   01-29-2008, 08:27 PM
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He does have a good point there. If the person knows you personally they are much more likely to stay with your service. Also, if they are local they are more likely to pay higher prices in hopes of better service.

I still say its worth the possible hassles
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  Post #7 (permalink)   01-30-2008, 05:54 PM
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Quote:
Originally Posted by ANMMark View Post
I have found our local market to be very lucritive over the time we have been in business.

There are services that we offer to local clients that we don't offer online.

We actually don't treat local clients any differently than we would global/online clients, as far as price is concerned.

In fact, it's one of the things that makes our services so popular among local clients, because our competition charges so much more, while we're able to sustain our business by charging the same amount we would charge all clients.

Now, keep in mind that when it comes to software or website development for local clients, local clients are more willing to spend the money, because you are there. You are and can be face to face with them.

We have a particular client in which we have been to their offices over the course of 2 weeks more than we have been at our own, due to an internal network problem they're experiencing, which is keeping their new website from loading for them.

Although they're having this issue, they're extremely happy knowing that we have no problem coming to their office on a whim to check in, and work on the issue for them.

Many online customers that don't have this access to your staff, will more than likely leave to find a new host, thinking that it's your hosting that is the problem.

Another issue is that online or global clients really only have the benefit of reading the words you type, and as such cannot tell if you're being honest with them, and will usually assume that you're not. Then, on the complete opposite side of things, local clients standing face to face with you, can almost read you, and know that you're doing everything that you say you are to help with any issue they're having.

Overall I find more benefits with local clients than I do with global clients.
A very persuasive post there, Mark! It sounds like you're offering a brilliant service to your local clients (and global no doubt too). I tip my hat to you.

I hadn't considered the body language side of it, that's an excellent point. I personally am very conscious of that in other people too. I look more for non-verbal cues than listen to what they're saying if I think they're spinning me a yarn.

Your post almost made me forget about possible 3 am wake up calls...

Thank you very much. I'd like to ask this then to you and anyone else that'd be interested in responding - in your experience, would you say it's better to focus on cultivating a local client base than aim for a larger global one?


Quote:
One quick item for Hannah: Local customers do not behave any differently than other customers. They tend to be less technically savvy, but that explains a higher premium. You expressed concern about having them "knock on your door" and that simply doesn't happen. After doing this for several years, we have found that local customers are extremely lucrative and loyal.
Good to hear, HostingAmerica! I maybe over exaggerated a bit what can happen but you know what I mean. I really do appreciate the response and you too make a great point, loyalty is a huge plus and harder to hang on to with online customers in my opinion.

Quote:
He does have a good point there. If the person knows you personally they are much more likely to stay with your service. Also, if they are local they are more likely to pay higher prices in hopes of better service.

I still say its worth the possible hassles
I think you may well be right, SohCahToa. My feeling is that online customers are more likely to go elsewhere than local customers also because they know how to shop around online. Neither do they have to tell you face to face they're dumping you. Does anyone think that's a fair assumption or have you found it not to be the case and there's a pretty even split?

I'm getting quite absorbed in picking everyone's brains! Thank you all so much for letting me.

Last edited by Hannah : 01-30-2008 at 05:56 PM.
 
 
 


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  Post #8 (permalink)   01-31-2008, 01:46 AM
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I absolutely think it's better to build a solid local client base before going after online/global clients.

As pointed out, local clients are typically more loyal for many reasons, and the best place to sell something, is to loyal customers who have already purchased from you once, and know the quality.
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  Post #9 (permalink)   01-31-2008, 03:05 PM
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My experience with local clients is much like Marks. They know they can call me and have me stop by when they need help. It has actually led to a few non-web related setups for me as well.
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  Post #10 (permalink)   01-31-2008, 03:42 PM
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Quote:
Originally Posted by Chris_M
My experience with local clients is much like Marks. They know they can call me and have me stop by when they need help. It has actually led to a few non-web related setups for me as well.
This is something we've been doing a whole lot lately. Yesterday we spent 5 hours at the client's location, troubleshooting a problem that was keeping them from getting their emails, or loading their website.

After figuring out the issue, it turned out that we either had to disable their network proxy, or move their account to a different server. We of course could not disable their proxy, because it was in place for a reason. So after we left their office, the rest of the work day was spent preparing their website for a server migration.

It has gotten to the point that they're starting to think of us as part of their own staff lol. Just yesterday while they were taking lunch orders, they asked Mike and I if we wanted anything lol. They know us on a first name basis and treat us like part of the "family". That's not something you'll get online.

When you're able to spend this kind of, in person, one on one attention with a client, they tend to trust you more. As such, more often than not, they'll become more loyal than practically any customer you'll find online.

Factors of all of this come from a multitude of directions, but a primary factor is that it has become so easy to open and run an online business, that practically anyone can do it. So much so, that you'll find a lot of people opening a business online who have no business experience, or business sense at all, or you'll find a lot of kids opening "businesses".

What this causes is the expectation of getting something free or cheap, because to them, business is something you can do for very little or no money.

Businesses in your local area have established locations, actual bills, and responsibilities to meet. They tend to know a bit more about business than someone who throws up a website and calls it a business. This equates to them knowing that getting a quality website designed and developed is not something you can get for $50. They know that you can't get advanced quality custom software developed for $100. Thus, when they contact you or agree to do business with you, they already know they're going to spend some money.

Now, while you can get more money from them in relationship to design or development services, I strongly feel that you should keep your same low hosting rates for them. Why? Because their experience is that you can't get hosting services for less than $20/mo for 100MB of space. When you offer it to them for $9/mo, they're usually all too happy to oblige.

once you have a solid local client base, doing business online is easier, because you'll find that while you appreciate online business, getting a customer online is far from your primary efforts or goals, because you already have a strong and profitable business model in place with your local clients. You'll begin to think of your online transactions as "extra revenue".

If I may advise however, when you approach local clients, try to fit as much key information into your first few opening statements to them, because they're already assuming that you're going to be expensive, and as such may say "No" based on that assumption. So you need to be friendly, concise, and squash those assumptions as quickly as you can. You'll be surprised at how many times a potential local customer will say "yes" after that.

Oh and don't be afraid or ashamed of bartering with your customers for services if they can't afford you. All avidInteractive employees and their family members now have a lifetime free membership at the YMCA because of this method. Can't be embarrassed about a free lifetime Gym membership lol.

In fact, a relative of mine actively does this, and lives a life of a king so to speak, with things he bartered for (3 cars, land, nice home..custom built, remodelling, vacations out the rear, etc). He got most of these things either free or very very cheap, in exchange for his services.

So yeah, don't be ashamed of bartering if you must.
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