When it comes to web hosting or any other business for that matter, everybody loves bulk orders, and in most cases, service providers are more than willing to offer big discounts to such customers. But, when it comes to hosting industry, recurring business is what really decides the profitability aspect, and in case you manage to pull off a few bulk orders, and generate even hundreds of signups, by offering bulk discounts, what really decide the success of failure would be the renewal rate.
So, are these bulk orders really good or bad? Well, it’s hard to predict, but here are a few pointers highlighting the pros and cons of individual clients vs. bulk orders in case of shared hosting (any bulk hosting orders for VPS and dedicated servers can be nothing short of a web host’s dream of course!)
The Budget Aspect – Larger agencies that place bulk orders don’t really have budget constraints in most cases. And, hence they may not really go to another web host until they get a significant difference in terms of pricing. However, in case of individual clients, the chances are high that the customer may switch host even for availing a 15-20% discount offered by another host. So, if the renewal prices are increased, the bigger clients may still renew without any fuss so long as they’re completely satisfied with your service.
Challenge of Keeping Bigger Clients Happy – The individual clients are not so demanding, and are relatively easier to please. On the other hand, the larger agencies would always have tons of requests, and bigger expectations. For instance, they might ask you to host chunks of sites on separate IPs, take daily back-ups, run malware checks daily, monitor the down-times very keenly, and even create a very strong negative buzz on social media in case of any issues. Individual clients may also rant a few things on Facebook or Tweet stuff but those odd complaints don’t really become game-changers in most cases.
The Retention Rate and Risk Factor – While you generate dozens of sales at once, you also run into the risk of losing all of them in case of any hiccups across any of the accounts. This clearly means that you need to be ready to lose all the accounts of a larger client even with the slightest negligence from customer support team or any other unforeseen issues. However, there’s no such issue with the individual clients who’d usually continue to avail your hosting service, so long as they’re happy with quality of service, and the pricing point. Therefore, the retention rate might be extremely high or extremely low in case of bulk hosting orders, while there’s no such thing in case of individual clients, and it may vary with each customer.
Difference in Expectations Levels – In case of bulk orders, clients always tend to seek the VIP status, and demand a lot more than individual clients. Hence, keeping such customers happy in the longer run is a tough challenge, but if you live up to their expectations, then you’d certainly reap big benefits. For instance, InMotion Hosting has managed to retain a big brand like CNET as their client for over a decade, and it has certainly benefited their bottom-line by a good extent. Likewise, with just a few bulk orders or big corporate clients, you can garner a lot of publicity as well as generate stable business that’s highly profitable in the longer run too.
So, in case you’ve been targeting only individual customers so far, it’s time to revisit your marketing strategy. In most cases, affiliate marketers who have got strong hold in the market manage to pull off such bulk orders quite easily from web design, and digital marketing agencies, and/or training institutes offering courses on web marketing, and pro-blogging. Offering cheap bulk web hosting packages or high commissions to affiliate marketers would be one and the same as far as costs are concerned. But, if you manage to build a healthy business relationship with just a handful of successful affiliates, then you won’t have to worry about keeping the sales figures high all the time.