Customer types…

The web hosting business is an extremely tough business because so many customers need different services and support to meet their needs. This is VERY difficult when you need to manage and balance those needs across hundreds of thousands of customers as is the case with Bluehost and Hostmonster. In web hosting specifically, I believe there are basically three types of customers.

The first type of customer constitutes 80% of our customer base. These customers needs are moderate on most levels. They require stable email and hosting services. They usually require support services only during the first 30-60 days while their site is set up and configured the first time. From a financial aspect these are the “golden” customers. They don’t eat up system resources and they don’t consume more than their “fair share” of support services.

The second type of customer is the power user that pushes the envelope of what a shared hosting client should be. They usually are more educated in terms of hosting than the average customer. They don’t often use support services, but when they do it is usually a difficult task that requires at least a level 2 support rep and often is escalated to our team of admins. These customers are the ones who make shared hosting difficult because CPU and memory usage is extremely disproportionate in their favor. These 10% really do consume 90% of our system resources. If these 10% were 90% instead I would run for the hills and never dream of doing web hosting as a business!! This customer base is also VERY useful to us for one specific reason. They drive us to be better and to implement features and enhancements that we would normally never put in place, and that helps everyone in the long run. So while these customers cost us money – we make no money at all on these type of customers – we are grateful to have them. They push us to be better and in most cases we respond positively to that.

The third type of customer is the toughest by far. These are the people that are generally new to web hosting and have expectations that are almost impossible to meet. They demand the world, don’t/won’t understand what responsibilities fall under their control (domain issues, script security, etc) and what is under our control (servers, network connectivity etc). Often they will call as many as 50 times in a single month for support and hand holding. These are the people that REFUSE to learn on their own and constantly require us to do everything for them. For their $7 a month they expect instant answers to their questions via phone, chat, and email, and tolerate no faults on our side as if they have a cluster of managed dedicated servers. These customers cost us 10-50 times what they pay us and threaten to leave when things don’t go their way.

I am not trying to anger customers, but I think it is important to understand that we are a business that operates for profit (A dirty word I know). As I mention above, 90% of our customer base is extraordinary. We are happy to work our tails off for them day and night. I don’t know another hosting company that has so many people that REALLY care. I guess even the CEO gets to rant every once in a while :)

Matt Heaton / Bluehost.com

32 Responses to “Customer types…”

  1. Jim Hardy says:

    You know Matt, I work in manufacturing, and your sediments just couldn’t express the feelings I have towards my customers. Funny how we share common experiences across the boundaries of industry! From a Quality Assurance perspective, the fence we walk seems never to be as pleasant as we would like, but we walk instead because we believe. Our company recently changed to your service BECAUSE of your low price. I believe we will be one of your “golden” type of client. Keep at it buddy…

  2. No fears, Matt. You are far and away, the best thing out there.

  3. ThirstyJon says:

    Hmmmmm.

    Not sure what to make of that one Matt.

    Maybe you are offering more in your ads then you can really deliver. “Award Winning” customer support. A gzillion terabytes of this and that.

    I think I’ve probably contacted support 7 times or so since I started, and always briefly. If it took 50 to get it done though, I would do it.

    :-)

    ThirstyJon

  4. Charles says:

    Matt,

    I think that, a lot of times, the type of customer we are depends on several factors.

    Number 1 being determined by the company itself and how well it is set up with what they have to offer in the way of options, benefits, and customer support.

    Another determining factor is the personality of the customer that is being dealt with. You know that you can never fully satisfy some people no matter how much you offer.

    How much experience the customer has also goes a long way in determining which of these types that they fit into at any given time.

    My first experience with hosting brought a fear of doing something wrong and not being able to correct it. This is just one of my traits but time and experience in dealing with Bluehost has taken away a lot of insecurities.

    In the 2 years that I have been a customer, I have had to call technical support 4 times (I was with my first provider for one year and found that they had very little to offer in the way of support).

    I have had nothing but positive dealings with your company, keep it going in the same direction.

  5. Michele says:

    Matt

    Your experiences mirror ours exactly :)

    Michele

  6. Mike says:

    Someone call the Whaaaaamublance!

  7. Phil says:

    Matt,
    hot line and customer satisfaction is hard job !
    by the time I’m your client I can compare service and efficiency.
    My Co is located in US, and I’m currently in France – so I do compare providers services. Believe me (I’m a marketing expert) your service is excellent (both technical & relational) – Please continue that way – this is the right one. Let Bluehost detractors try & test the french suppliers’ hotline….
    BRgds
    Phil

  8. Politivi says:

    Customer Service Greediness…

    Matt Heaton, the founder of BlueHost (the firm that I use to host this site) wrote in his personal blog about the difficulty in balancing customer service needs of hundreds of thousands of customers [link]. He writes that the vast majority of folks c…

  9. Angel says:

    This is the way of the customers proceed, I have to accept that we use too many resources of bluehost, but we try to optimize our applications and we go to support exactly only when something wrong happens.

    Sincerely, bluehost support it´s the best support.

  10. J says:

    The customer who knows the least usually expects the most, and wants it cheap, too. As a web designer, I can totally relate to what you’re saying. Thanks for being the one to say it! We can be too afraid, sometimes, to admit the customer is not always right. If unreasonable customer demands are undermining your business, then there’s nothing right about that.

  11. Fabian says:

    WOO I don’t have a personal domain or anything… but I believe I fall into the 1st category. :D

  12. Jill says:

    I would have to say that I am one of the third types of customers. I know just enough about the computer to get a website up but I have no other knowledge. When something goes wrong I turn to my server company (I am not hosted with you :) ). I think that they have all the answers and are there to help me. I am not trying to get something for nothing or irritate anyone, I just don’t understand the “system” for lack of a better word. I guess you could say I view you as my savior. In many cases that has proven to be the case.

    I am shocked to see how a person like me is viewed by the management. Everyone has always been so kind and helpful, I thought that what they do for me is what they do for all their customers. Ignorance is the reason.

    Btw, my server company is Rack Space and they are absolutly the best with unequalled customer service. They have helped me everytime I have called which isn’t too often unless something goes wrong.

  13. Black Hand says:

    As one company used to say “we have no unhappy customers” – reason – they got rid of the unhappy ones!

  14. Mark says:

    Jill, there is nothing wrong with not having a lot of technical skills and relying on another company to handle that for you. RackSpace specializes in that.

    The problem is that some customers expect their hosting company to do things that are the client’s responsibility, such as troubleshooting their scripts, customizing, etc. These are customers that are paying $7 per month. If a support tech spends 30 minutes on the phone dealing with a customer-specific issue, then you are an unprofitable customer. The company would be making *more profit* by firing you.

    Web hosting support is so sticky and the demarcation of responsibilities is very very grey because users can’t tell whether the problem is because of an issue on the hosting setup, or their own website code.

  15. Wes says:

    You make some very interesting observations. I don’t think I am in the last 10% but this post just got me thinking of what I do as a customer, my demands etc.

  16. jessiejojames says:

    I am looking for a host for a blog that I want to start. I am a new person to the computer world, so I would probably be the one that may call about 10-20 times a month. I would not do it because I think it would be fun! I will have to do it because I am new to the web but I want to learn and want to start a blog. Your comment almost makes me feel like I’m already being labeled as “one of those people who will call 50 times and ask all kinds of questions” Did you ever think that people call because they really NEED the HELP? I now have to wonder if I should go w/you guys or will your customer service be snappy and act like I’m a pest?

  17. Steve says:

    The problem with those new to the web is that:

    1. many seem to want the equivalent of myspace or another site at that sort of level as their first site rather than starting at the basics and either implementing a simple script such as WordPress or learning how to create simple static web pages first and gradually learning the more advanced things.

    2. They ask for help in the wrong places. The sorts of questions that Matt mentioned are inappropriate and unprofitable for the support staff to answer are better asked either in the BlueHost forum or some other web related forun such as webdeveloper or sitepoint. Better still there are plenty of web sites around where they can find out the information for themselves or posssibly go down the book store and buy a book or two on the subject.

    If those new to the web started with a modest project and actually learn the basics first then Matt wouldn’t have that last 10% in that category, they’d be with the 80% where they belong.

  18. Jenise says:

    Matt:

    First, “I love you, man!” I love Bluehost.com, the LiveChat reps (only used them 3x in 6 months), and your blog. Profit is not a dirty word.

    However, the online Help in the cPanel…um, sucks.

    I haven’t said anything until I read this post of yours. So, here’s my offer.

    Hire me, and I’ll improve your online Help. On a contract basis, working from my home, works for me if it works for you. :-D

    For example, the online Help for WordPress didn’t even mention Fantastico. If I hadn’t visited another blogger’s blog, I would not have known how easy it is to install WordPress under my account.

    Except for your online Help in cPanel, Bluehost.com “rocks” in my world. Let me repeat”: “I love you, man!” And, that “you” includes all of Bluehost.com’s employees.

    Your thoughts?

  19. Gary says:

    Having spent 30 years in sales with the leader in the industry I was in, the 90-10% relationship is not unfamiliar. I started my own business after retiring and guess what…same result. I have come to the conclusion that it falls into the same category of Mom telling you that you have to eat your veggies before you can have dessert! It’s just a law of the universe.

    I moved all of my web clients to Blue Host just over a year ago. It was a major event for me with more than 80 clients. It was incidental to BH with more than 850,000! They did not skip a heartbeat. I was a #3 in the beginning I’m sure…moved through a number 2 I think…and hopefully am now one of the Golden ones.

    One thing I learned in sales…you can NEVER tell when a #1 will become a huge #3. I always treated the “gatekeeper” in a business as though they were the decision maker. Over the years, many became the decision maker. It proved very profitable!

    Seems to me that Matt has a clear vision of his client base. I have told many, many people that Blue Host is one of two companies I discovered last year that “actually understand and deliver real customer service.” The other is RegOnline registration services. Both have a clear understanding that it’s about “relationships” and that often starts with that support phone call. Thanks goodness, they treat the numbers the same! Painful I’m sure for them…but in reality, that’s what drives the profit and avoids the bad will that so many companies have today, in the area of customer service.

  20. Kamie says:

    Matt, I agree with Jenise … your online documentation leaves much to be desired … but … you techs are very nice. I’ve actually put in a trouble ticket for that very issue (read: online docs not techs) In any case, so far I really like hostmonster for all of the services it offers. I had NO idea drupal was out there and Moodle either! I used Moodle for school several years ago and loved it. Now I can have my own site! In fact, I have a Drupal site for my writing: wetwiredcafe.com/wwc … I’ve got it locked down but anyway. That’s my 2 cents. :) Write on!

  21. Andy says:

    Hi Matt!

    You’re doing an AWESOME job! I’ve moved my domains and many of my customer’s domains over to your service already. I have a large circle of influence among a number of professional web developers here in the Phoenix area and I recommend your service all the time (just wish they’d click through my BlueHost affiliation links, darn it).

    I am a web application developer for Village Voice Media, which now has the largest CakePHP installation on the planet, so I’m told. We run our own hosting for our 16 newspaper sites and I wrote the media server that feeds up the photo, audio, and video assets… All in PHP5. I know good hosting when I see it.

    What you’re doing is by far the greatest thing I’ve seen in my years on the web (and I’ve been in it since the beginning, even running my own hosting company early on). I would say that I am one of the power-power users, for sure. I believe that what you’ve got going here is top-notch. The support is excellent, the staff is friendly and responsive (that I’ve dealt with), and the service is second to none. [golf clap]

    Thanks and please keep up the great work! I have more customers to bring on-board.

  22. jack says:

    woooo,

    I think I fall into the first category, my first time with hosting a site but I managed to stumble through all the steps and got a wordpress site going.

    That was an interesting read, and quite cool to hear a CEO ranting haha.

    Perhaps this is not the right area to ask but does bluehost offer any services to help customers with link building or increasing pagerank? It’s a steep learning curve and that’s def. one service I would pay for.

  23. JOhn Wills says:

    Matt,

    I see nothing negative about what you are saying. I have found my experience with BH to be extremely satisfying. Hopefully I have managed to be one of the first types most of the time. Maybe that’s because I got the #3 out of me with some other poor unfortunate hosts (including ArkWebs, where I might still be if they had been able to offer the space I needed at the time) and a couple of the freebie, build it with proprietary software types. In other words, I eased into it until I was comfortable with “real” websites.

    I find BH tech support to be exceptional. I also find your personal transparancy to be refreshing. I like that you are honest and candid enough to say, “Hey, guys, we’re having issues, I’m sorry and we’re working hard to resolve it.” I can deal with that. No cover up, no excuses. Keep that up and you will have me from now on.

    Well, the #3’s remind me of a preacher that I once heard say this; “It’s been my observation while driving down the Interstate late at night, that it’s the empty trailers that rattle the loudest.”

    Keep up the good work! Most of us appreciate it.

  24. Wayne Connor says:

    So just out of interest, what is the difference in usage between the first and second type of customer? I host a few sites on bluehost.com. I host http://macintoshhowto.com, also http://dubbo.org and also http://7.barracks.cl and http://mac-host.com. Is that excessive? Am I the first or second type?

    I’m wonderign if I’m hte 80$ or the 10% and how I know!

    Wayne

  25. Jenise says:

    Matt, I’m happy to see Kamie’s reply, as I have been regretting my use of the adjective in my post. Her description is much more professional, and yet, she sees the same problem.

    One day, let’s all work on your online Help to make it as wonderful as your hosting service!

  26. Linda says:

    I have a small web design company. About 95% of my clients are great: while not always experts in computers or web sites, they appreciate my work on thier behalf, enthuse about my designs and make few demands on time or resources. The other 5%… you nailed it! Clueless (not a crime in itself…), demanding and penny-pinching too!

    However, I love the work, have good friendships with many of my clients, and figure that a certain persentage of every population group is a negative that makes the rest of the group seem that much nicer!

    I think I am usually in the 1st group. Bluehost is a wonderful host that allows me to maintain that statue with ease… keep up the good work, please!

  27. I like to think of myself as one of your valued 90%. I certainly love Bluehost and recommend you to everyone who asks. Thanks for all your hard work.

    George

  28. Tony says:

    I currently have 4 separate hosting packages with at least 20 domains.

    I’m sure that at least on one of the hosting packages one site monopolizes system resources. Over the past 3 years I’ve probably contacted support an average of once per month, and it’s averaged as such because 9 out of 10 months I don’t need support for anything, but when something goes wrong and I’ve got 20 domains with tens of thousands of visitors, web design clients, and devoted fans all e-mailing or calling it’s important to know what’s wrong.

    I appreciate the candor in labeling your customers. I get way more from bluehost than I give, which I’m fantastic with. I’ve got one client who spends $450 a month for his server with Rackspace, and their service is incredible. Fortunately I get close to the same level for free, as the $65 referral fee I get for each of the few clients a year I refer to set up hosting accounts of their own pay for my hosting.

    I would feel bad about it, or be annoyed at being labeled as anything less than a golden customer, but I deal with the same thing. I have clients who, in all honesty, I consider paying to find another service provider because it would be cheaper for me to pay out of pocket to have them leave than to keep them.

    Business can obviously be complex, but the instances of customer type you’ve presented seem to represent a fairly simple notion – namely, you take the good with the bad. As you mentioned, the 10% of people constantly pushing the envelope make your business better. If Bluehost was a puzzle, the group of screwups that cost you money may represent a less than pleasant portion of the image, but they represent a portion of the image nonetheless. Get rid of those pieces, and the picture in the puzzle may look a bit nicer, but it’s incomplete.

  29. Makakiloan says:

    I’m the 2nd type of customer and proud of it. All I ask is that my web hosting service live up to what was promised when I purchased the service. Matt Heaton’s comments have me feeling defensive, and I want to stand up for the 3rd type of customer.

    So lets talk about webhosts for a second. (This is NOT about Matt Heaton’s company. My experience is with 123ehost and ehostpros.)

    Web hosts all try to promise the world for pennies… Excellent customer service! Unlimited email! Unlimited space! No down time!

    With overseas competitors added to the mix, web hosts have to offer as many services as they can at the lowest prices humanly possible.

    Then you use the service, and you find out the customer service representatives are horrible people, they’re utterly unsympathetic, they frequently don’t know what the hell they’re talking about, they refuse to admit when they’re wrong (which is most of the time), and they have nasty attitudes. They’re bitter about doing their jobs, and they can get away with being nasty because you paid for the web hosting up front.

    The web host feels no need to let you know when they switch your site to a different server or when they plant to update their software. They don’t apologize for all the things that get broken when they do this.

    The mail server is down half the time. The mail server gets blacklisted when other customers send spam.

    And so you pay for all these services that were promised on the flashy website, and then you get let down.

    And so you complain, because that’s the rational thing to do.

    The reason 80% of the customers don’t complain is because they’re only using a fraction of the services that they’re entitled to use. As long as their basic services are functioning properly, they’re happy.

    Most web hosts over-promise. That’s what creates customers like me. We’re not here to make your life hard. YOU make OUR life hard, by failing to live up to the expectations that YOU set.

    Oh and one more point:

    When you start losing the 2nd type of customer, you better get ready for the 1st type of customer to start disappearing too. When they were looking for a web host they asked us for help, because we know our s**t. They only reason they even know about your service is because we recommended it.

    :)

  30. PJMoore says:

    wah wah wah – perhaps you should promote yourself as the webhost for users that are smart and effecient and drive new users to someone who wants to provide service.

  31. johnk says:

    I’m one of those #2s. Lucky for you, I’m not on your servers (yet).

    In my situation, buying hosting, I’ve learned that shared hosting is a very good way to test your own software. If the shared architecture is slow and unreliable, you can alter your app to be faster and more reliable.

  32. David says:

    Hey Matt.

    I think a few comments above show that what actually happens is that *everyone* who is starting their first site needs the 50 help sessions. It’s just that 90% of those people go and find their help from other peoples’ blogs, as one would expect.

    For example, if someone installs WP for the first time, the place for them to get support is at WP guy or somewhere like that. That’s what their blog is for – and hopefully to make some sales along the way.

    Perhaps it would help if customers were told “where to go” – in the nicest possible way, of course. Maybe they need to be taught how to Google, or even provided with a list of (other) places they can go (Google being the first, of course).

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