William's post yesterday reminded me of the same story I've heard from several different web hosting CEOs and sales managers. In fact, you've probably done the same thing. You call a bunch of competitors' sales departments (and maybe your own, for comparison) to see who does a better job. You realize after a while that the web hosting world doesn't have very many good closers. Some sales reps are more proficient than others in answering technical questions, but too few of them have that used-car-salesman-like ability to sign you up.
The difference between web hosts and used car salesmen is, they know what buttons to push. And they're keenly aware that the answer is different for every prospect. Even voodoo witch doctors do a better job: whether you're looking to win the lottery or lose weight, they've got a different spell kit for you. (Too bad there aren't spells for network security, or warding off fraudulent orders.)
On the other hand, as William puts it, web hosting packages aren't perceived as *the* solution for each customer's different goals. And that's our fault, because from the looks of our websites, we don't even seem to know who our customers are. Intermedia.NET is among rare exceptions in its effort to segment customers by size and industry:
According to IDC, Intermedia and the voodoo doctors are doing what's profitable and efficient. Lee Levitt from IDC's Sales Leadership Board says sales success is all about identifying customer groups and their unique demands: some need lots of hand-holding, others expect specific industry knowledge from their reps. He promises substantial payoff for "investment in thoughtful, thorough, data-based sales segmentation policies and practices", because this will allow you to tailor marketing/sales/support based on customer requirements - and track ROI across different groups.
I'll end with two more segmentation examples. ShareFile is in the very crowded online storage business, but they manage to charge as much as $99.95 for 10GB of monthly bandwidth by positioning their service relative to specific industries. For instance, graphic designers are advised to "stop wrestling with quirky compression routines and burning CDs". Architects are promised faster approvals from customers. Lawyers and accountants are assured that "128-bit SSL security encryption means sensitive data is secure".
Better yet, Delaware.net CEO John McKown not only knows what his customers need, he goes out and builds the right solution for them. (The right solution, you'll notice, doesn't include 3000 GB of bandwidth for under $10/month.)
John was telling me yesterday that we've got a lot more than Google and Microsoft and Amazon to worry about. What about Quicken? What about banks? Sooner rather than later, everyone will put all kinds of data online with as little thought as we plug our latest gadgets into electrical outlets. In the end, customers will buy web space from whomever is best able to address their personal and/or business needs. And don't tell me traditional web hosting providers will win with "better customer service". Good is relative. You have to know how each customer segment defines it before you can deliver it.
EVERY business needs a host. It is a commodity. Sooner or later, they also need business automation. A billing system and/or customer database is central to that.
I think Jason that you HAVE seen that type of navigation before, but it might not have been as obvious. For example... Go to Dell's web site, CDW, HP, IBM, even Verizon's site. You will see a qualifying question. Something like "Are you a small, medium or large business?". Sometimes they also ask "Are you a government customer?". When I was in Washington DC recently I saw an advertisement in the subway for a CDW web site that was designed especially for government agencies. Smart.
David - I agree with the IDC report. Some customer groups need industry-specific account teams and service plans, but others might not. Does the average hosting company have many medical clients? Possibly. But how profitable are these customers? Is there more where they came from? What else might they want to buy? I think that's why John is concerned that we'll lose business to companies who've given more thought to segmentation.
John and Jason - Totally. Segmentation is *everywhere*. Clothing stores ask whether you need an outfit for business meetings or going out. Pet supply stores offer different products depending on your dog's age/size. Health club signup forms ask what your goals are for joining... They're all trying to achieve relevance - instead of offering you 2500 mailboxes which they know you won't use.
I will not say fragmentation but marketing segmentation.
I agree with this "how profitable are these markets or segment."
-And when you sign up with a company and they don't provide you with ftp details,and you have to send many e-mail to request for that??????????
-Ladies and gentlemen, let us bear in mind that the challenge of web hosting today, is not hosting small web sites. But offering services for content management systems and there are not many of you folks that are not even thinking of this development or market segmentation?