Sometimes I wonder what the heck I am doing in the web hosting business. It is about the most competitive industry that I know of. Prices are being driven so low, and features sets are growing so quickly that many hosts can’t make ends meet. Many hosts cut costs so much to compete that in many instances even the customer loses out because support suffers in the name of profit or cheap pricing structures.
What is a web host to do in this situation? You really only have a couple of choices. First you can cut costs in an effort to better compete, which is the road that many hosts take. This ultimately hurts the company that does this because “costs” usually mean service and other necessary functions of your business that customers rely on. The second option and one that Bluehost subscribes to is to provide “premium” services that customers need and are willing to pay for to drive up revenues and ultimately profits. In the title of this blog I mention “ARPU” which stands for average revenue per user. All web hosting companies should have plans in place to drive further revenues from their loyal customer base.
Driving revenues can be a slippery slope for many hosts. Many hosting companies don’t have new or innovative products to offer their customers so they use hidden fees, and basic upgrades to charge customers for. An example of this might be charging a customer to “activate” their addon domains (Like many of our competitors do), or charging a cancellation fee if a customer decides to leave. Both of these will drive revenues up, but will also drive your customers away.
We have thought long and hard of additional features that we can add that would both allow us to increase are ARPU numbers and give value and services that our customers need and deserve from us. A good example of this is our web design group that should be up and ready in a couple of weeks. Many of our customers need design work and coding work for their sites and don’t have thousands to pay to get a site up and going. We have always been a hosting company only and don’t do any design work. This type of service is a great addition for Bluehost and will add revenue at the same time.
Learn to give value for your customers dollar. They work hard for their money and when they choose to spend it with you they are trusting your company. That trust is easily lost, but hard to earn. If you do right by your customers they will continue to spend with you and help your company to go right along with their own.
Matt Heaton / President Bluehost.com