Managed Hosting Doesn’t Have to Break the Bank

May 4, 2014

When you’re shopping for better cable service at home (and we’re always looking for better cable), wouldn’t you choose a company with a reputation for actually helping you when you have service issues? Responsive, helpful support makes a difference in our increasingly busy lives. Conversely, it seems most service providers, including “premium” providers consistently deliver less than helpful or timely support when we need it most.

Don’t Lower Your Standards
With diminishing support standards, you shouldn’t have to lower your expectations or standards. You may have to do some research, but there are some great companies focusing on scaling and improving support processes to improve their customers’ lives. Organizations like MailChimp, Virgin, Zappos and many others are changing the relationship with their customers. These organizations put customer service or customer experience in the forefront of their value proposition and it pays off for them.

The Economics of Support
Companies going above and beyond do have to invest in delivering a high level of service. It’s a commitment or a value you set as an executive priority at an organization. Many companies actually have a customer service statement in their primary branding. The Zappos tag line is “Powered by Service” and Rackspace’s tag line is “Fanatical Support”.

Investing in customer experience means employing support staff locally, investing in training and tools to scale communications. It can be a tough sell to a board of directors. It’s been proven that organizations committed to delivering exceptional service win on several levels:

  1. They’re building positive brand equity, creating an army of “talkers” willing to refer their business, capitalizing on the powerful Word of Mouth marketing channels, generating new business at a low cost of acquisition.
  2. Increasing existing customer lifetime value. Establishing trust with customers encourages them to add more products to their existing accounts AND extends a customer’s “lifetime” or time with the organization. Media Temple enjoys a much higher than average customer lifetime.

Cisco produced this case study of the impact customer satisfaction had on a bank’s customer retention and revenue. The results prove investing in customer experience will bolster the bottom line.

Keeping Support Affordable
Service companies have a particular challenge to maintain a stable and competitive pricing structure. At (mt) Media Temple, we’ve invested the majority of our resources to scale our support processes, growing our communication channels to provide exceptional standard support. We’ve also developed a premium support product to solve customers’ more complex issues. Ultimately, we’ve kept our hosting pricing competitive opting to invest in a more mature customer LTV.

“Managed” Doesn’t Have to Mean “Exorbitant”
Managed Support as a product has become big business. Some companies like Rackspace have based their entire business model on costly managed support packages wrapped around standard products. This increases the average customer value substantially, but decreases the perceived “value” of their products with non-competitive, unapproachable pricing. This model is proving to be an issue for Rackspace’s position in the cloud market.

Our approach to premium managed support is flexible offering a la carte services for people that need help with one specific issue, and not the “Cadillac” managed hosting package, making “managed” more manageable.

It Takes Balance
While we have invested heavily in building an award winning support team and the experience we deliver to the customer, we work to keep our products fairly priced. This means knowing how to factor the cost of our high level of support into pricing while making sure our core products are positioned to compete in a market where quality and value can oscillate wildly.

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