Special to theWHIR.com
May 19, 2004 — (WEB HOST INDUSTRY REVIEW) — It sounds like such an easy question, yet the graveyard of business is littered with the tombstones of companies that never found the answer. Well, thats not entirely true; some companies had the answer, but couldnt articulate it in terms of products and services. Other firms had answers, too, but to questions that were not being asked. And still others tried to re-define the question during a year that saw Internet Services Providers searching for their place in a rapidly changing industry.
Determining what customers want sounds like such a cut-and-dried proposition, provided customers themselves know the answer, and therein lies the rub. Hosting sounds so generic; anybody can do it and the Internets short history shows that almost everybody has tried. The industrys evolution and maturation have yielded dual results: the weeding out of the weaker companies and the emergence of niche providers. Shared or dedicated? Windows or Linux? Fully managed or self-managed? Cookie-cutter solutions or build your own? No wonder customers are confused.
Of course, the heart of the confusion lies in the industrys relative youth. Features that didnt even exist a few years ago are now industry standard. As hosting becomes more commoditized, customers have increasing access to basic plans that offer more for less. It’s like anything else that evolves from amenity to necessity. Take cell phones, PDAs, even PCs as just a few examples; prices continue to drop while capabilities increase. At the same time, customers understand the difference between basic and premium services, and companies who get caught up in price automatically cut into their potential market share.
If price were the sole consideration for every buying decision, no one would drive a luxury car, no one would have a plasma screen television, and no one would stay in a four-star hotel. Customers who want the cell phone that has games, makes fries, tap dances and stores music will pay for that capability; customers who want nothing more than a portable phone will pay for that. Same with hosting, which is why many providers cater to specific markets.
With that in mind, one answer to the title question is that there is no one answer, which is evident by what customers look for in shopping for a provider:
Let’s assume for a moment that the providers that have lasted this long already know this. They pay attention to what customers tell them. They respond to complaints and inquiries. They even incorporate good suggestions. Thats one important step in survival but more than good phone etiquette is required in providing quality service; its also about being able to offer customers what they want before they have to ask for it. Of course, before a service provider can know who its target is, it must first be clear about its own identity: should the focus on increased automation or on value-added features, and is the primary customer the enterprise or the SME?
Few service providers are equipped to fully do either, let alone both. Thats the reason so many providers have more partners than organically developed features. Partnerships allow companies to offer additional products and services at a fraction of the cost of in-house development thereby making enhancements affordable for the customer.
As to the second point, the SME marketplace remains the key battleground because of its size. Of the millions of small businesses in the US, there is a sizeable percentage with no Web presence, and among companies that are online, plenty have sites that are little more than digital brochures. As those businesses grasp the value of having an online component, service providers grapple to introduce features that are relevant, and that reflect what the customer wants.
The struggle to create value is the key to the question being posed here. Economic signs point to a rebound for 2004, sometimes in contradictory ways. Companies are poised to increase IT spending, particularly on hosted applications that improve office efficiency. That efficiency, however, means fewer jobs, so people pushed out of the corporate world have turned to self-employment. That means more businesses with online components that demand servicing as they, like their former bosses, try to do a lot for relatively little. Companies that can offer bolt-ons that improve productivity certainly provide one thing that customers want.
The bottom line is that customers want service, however providers choose to define that. There is the personal touch that regionally-based companies can offer through their closer connection to customers. There is the feature-focused approach, giving people what their businesses need in order to be successful. There is the value-based proposition and its ever-lowering prices. There is also the reverse the premium provider, which charges more but has the burden of proving its worth. And there is the universal imperative of being accessible to customers, ready to listen to them, willing to respond to concerns, and able to implement necessary changes that answer the question that drives their business.
About The Author
Alex Lekas is vice president of corporate communications at North Carolina-based Web hosting provider AIT.
