Customer Relations in Server Hosting: A Competitive Differentiator
Posted on April 4th, 2012
The truly global nature of the web hosting industry makes it easy for buyers to choose from a variety of different providers located all over the world. Consequently, increasing market competition beyond national borders accelerates pricing pressure on providers. Current times of outsourcing and cloud domination on the server hosting market therefore call for unique selling points that distinguish service providers from their competitors.
Besides offering unbeatable prices and cutting-edge technological infrastructure, there is one other aspect that providers should consider crucial when it comes to gaining a competitive edge. The web hosting industry is a business of customer relationships above anything else. Considering its fragmented nature, strong ties between providers and their customers might nowadays be the defining component of successful business relationships.
According to a recent study by the International Data Corporation (IDC)*, “Hosting providers have to balance the need to continue focusing on customer service as a key competitive differentiator while building next-generation datacentre infrastructures and utilizing virtual server and storage capabilities.” Thus, next to flexibility and innovative elements, customer relations represent a key focus for Canadian web hosting companies.
Speaking of customer service, the research refers to superior customer support through constant mediated communication and excellent problem solving skills on the technical side. Moreover, the study emphasizes on the value of physical relationships between customers and their providers. “The survey data presented in this document demonstrate that Canadian buyers of hosting services still prefer providers with facilities located in Canada”. According to the IDC, “to successfully engage Canadian buyers, hosters will have to build a Canadian presence.”
Actual eye-to-eye meetings with the provider’s sales team, a tour through the data centre facilities and an introduction to the responsible technicians are unique selling points that help building up trust. To underline the importance of physical relationships, one could think of the recurring trend of preferring to buy groceries at a local farmers market as compared to a large grocery chain. On a farmers market, customers can make an informed and secure choice when they turn to local/national providers because they can physically scrutinize their practices and methods. This gives buyers a satisfying sense of security and control.
In sum, the increasingly fragmented, global server hosting industry calls for key competitive differentiators. Recalling the general urge of customers to establish strong relationships with their providers, server hosts can stand out by offering even more than superior customer support. In the business of relationships, chatting about a customer’s needs over coffee might be ‘the’ competitive advantage.
* IDC (2009). Web Hosting Services in Canada: User Requirements. SKU: IDC2273187.