If you run a website hosting business, you already know the challenges in the business. Thousands of competitors are just a click away, ready to undercut your price.

Potential customers see hosting as a commoditiy and shop by price. Several directories like Hostreview, Acehosts and Hostindex make it easy to comparison shop.

How can you get more profits from your business under these conditions?

FIRST, GET THE CUSTOMER

Calculate the lifetime value of your customer. For example, let’s say the average customer stays with you for 15 months and pays 16.95 a month. That means their lifetime value to your company is $254.25. So every customer you acquire makes your business (on average) $254.25.

If a visitor comes to your website, then leaves to comparison shop, you have more than likely lost that sale. Have you invested in sales copy that compels your visitors to buy from you? Does your website help him to see that you are the best choice for his situation? Showcase your credibility, guarantee services and offer incentives to try your service. Make it easy to buy from you.

NEXT, KEEP THE CUSTOMER

Because each customer is hard-won and the value of the customer is so high, you’ll want to make sure you have the support services that keep your customers happy.

Once a customer leaves you for another website host, he’s gone forever. You probably already make customer service a priority, with email answered in a timely fashion and well-trained technical support. Go the extra mile. Don’t wait for customers to contact you. Ask your customer how you’re doing.

THEN, SELL MORE TO THE CUSTOMER

The customer has already bought from you. There is familiarity and trust. You can easily offer complimentary items to your current customer list.

The major concern of your customer is how to succeed online. It’s easy to offer online marketing tools, ebooks and additional services. It can be as simple as joining an affiliate program for an item your customer may need, then making him aware of the item.

Focus on these 3 areas, getting the customer, keeping the customer and selling more to him. You’ll enjoy higher profits in your website hosting business.

General rule of thumb is not to sign up for yearly web hosting plans. Instead, get monthly plan where you can unsubscribe from on the second month when you are not happy with the service. That is, if you ended up with an unreliable web hosting company in the first place.

Here is a simple guide that can be easily applied to typical web sites:

–Web Space–

Expect a small website to take up 10 and 100 MB. Considering that you may want to expand your website in the near future, it is advisable to get a web hosting plan with ample web space.

Make sure that you know your needs before you start looking for your web host. Not every web hosting plan can be upgraded or customised. More than often, webmasters do not get the features they need and are not able to customise their web hosting features.

–Monthly Traffic–

Data transfer per month are typically referred to as bandwidth. It is the amount of data transfer that occurs between your website and visitors. A small or medium web site will consume between 1 and 5GB of data transfer per month. Larger, commercial or popular websites often consume more than 5GB of monthly data transfer and sometimes, exceeding 100GB of monthly data transfer.

Before you decide on a web hosting plan, be sure to check this:

- What is the monthly data transfer/ bandwidth allowed?

- Will you be charged if your website exceeds its limit?

- Are you able to upgrade/add on your bandwidth?

–Connection Speed–

Visitors to your web site will often connect via 56K modems or ADSL modems but your web host provider should have a much faster connection. Your website should have high web site connections that are approximately 1000 high speed (56 Kilobytes per second) modems combined- T3 fiber optic connections.

In the early days of the Internet, T1- connections was considered a fast connection. The fastest connections available are T3 connections that are used by Internet Service Providers and major corps.