View Full Version : how to compensate clients for downtime?
Lem0nHead 05-10-2004, 08:58 PM hello
i do my best for having a stable and secure server, but i was caught with my pants down...
my credit card was declined and my server was shut down (if you want more information, http://www.webhostingtalk.com/showthread.php?s=&threadid=269447 )...
i estimated that i'll have around 20 hours downtime on total...
my terms of service don't say anything about uptime guarantees... but what do you think it would be reasonable to give as DISCOUNT FOR THE NEXT PAYMENT, in order to keep clients?
i guess 20% if a nice value?
also, would you explain exactly what happened?
thanks
WirralNet Matt 05-10-2004, 09:20 PM Explain it was due to a billing error with the data centre and offer them something like 50% off the next month or something. Try and make an improvement to the service, even if it is a small one as a gesture to them.
20 hours is a long time and although it was not your fault, the clients will be a bit miffed. However, providing the uptime has been good for the rest of the time, then you will probably find that most of the clients will be happy :)
LP-Trel 05-10-2004, 09:21 PM Usually companies that have SLAs refund 5% of the total contract for each hour they are down.
I'm not saying that is what you should do but, it is industry standard I believe. ;)
WHRKit 05-10-2004, 09:45 PM You should try to turn this event into something positive. The explanation with the billing error and the data center might be a good option. Don't lie - but with proper wording you can still make it a reasonable explanation without telling what really happened.
Be generous. Give them a full month of web hosting for free. The make sure that you provide first class customer service and follow-up with the clients after 2 weeks. Make sure they feel that you care. Follow-up again after 30 days and ask if things are Ok and all that stuff. If you do it right - the angry clients from today will be the ones sending you referals.
SniperDevil 05-10-2004, 09:48 PM If it's going to be 20 hours, and even if some of your clients are hosting very high-priority or important sites, I would definitely advise you to just go ahead and lose some cash for this month, and give them this month (May) free. This seems very logical for me, considering it is almost a full day.
Mark_TVI 05-11-2004, 12:15 AM I would agree with SniperDevil, give them all a free month this month and hope that there isn't a mass exodus of clients...
lorandm 05-11-2004, 11:27 AM If you see it from a different angle, the situation will look like this: A new customer signs up with you the day before the downtime. He notices that his site is down the next day for 20h (he won't be checking it every hour, so he'll very well think it was 1 or 2 days) and this wil pi** him off. Another client that has been with you for 2 years notices for the first time a downtime. Is there any difference? Not likely!
So my guess is that you first should give them a free month(each and every one of your clients) and to avoid further "accidents" like this you should put a paragraph in your TOS stating that "downtime caused by... and not within our own fault won't be compensated" etc.
Also you should be a bit more carefull :)
PogiWeb 05-11-2004, 11:55 AM I would contact each of my clients by email or a post on the site enforming them the situation. Then I would give each of my clients 50% off the next month.
ldcdc 05-11-2004, 11:59 AM As they say, honesty is the best policy. A free month of hosting should be OK I believe, helping you to minimize the number of customers that will be leaving. Good luck!
NH-Benjamin 05-11-2004, 12:50 PM Refunding them is always nice ;) a free month of service is nice if you can afford it.
Yassi 05-11-2004, 03:36 PM At some host (forgot which one) there was a downtime compensation policy, which I liked.
25% of the monthly fee for every 30 min of unscheduled downtime (of course the refunds will not exceed the whole monthly charge)
fernandodl 05-11-2004, 03:39 PM From a client point of view I would like to get a free month :)
Lem0nHead 05-11-2004, 04:18 PM Originally posted by Yassi
At some host (forgot which one) there was a downtime compensation policy, which I liked.
25% of the monthly fee for every 30 min of unscheduled downtime (of course the refunds will not exceed the whole monthly charge)
yes, but that's hard to get this ratio
in 1 year, i had a 12 hours downtime because hardware issue (most time was ev1 techs trying to find out the problem) and now this one of 21 hours because something i really never thought would happen - yet doesn't seen reasonable for me)
thanks for all the ideas, my move was to:
- give 50% discount for next month (i'd give 100% if i could)
- increase the BW limit in around 20% for all plans (i already planed to do that ;) )
- guarantee 99,5% uptime in contract, with progressive discounts
up to now (4 hours on-line) no one requested cancelation (but i have less than 200 sites on this server)
Joseph_M 05-11-2004, 05:23 PM Looks like you chose the right path Lem0n, you gave enough so that the customers are satisfied, but not too much so that they complain about every little thing. They'll feel satisfied, and you'll be able to afford to pay for your server bill (assuming you actually have a decent profit margin).
Paul-UKWSD 05-11-2004, 05:39 PM If your clients are paying monthly then 50% off next months payment is a good gesture. If they pay annual then 25% off their next years plan is a good offering.
20 hours downtime is a long time and I imagine you will see some clients say their goodbyes over this, fingers crossed for you that this does not cause you too much damage.
moral of the story, always have a backup CC that can be used on standby ;)
WHRKit 05-11-2004, 06:44 PM Keep us posted how it works out. This can be a valuable lesson for many newcomers.
Well we've just had to do a mass refund and have offered 10% for 3 hours downtime which seems to be a nice balance for customers. I think 1/2 of it does depend on how you communicate with customers during the downtime as they are more friendly if you try to keep them updated
Rus
Lem0nHead 05-11-2004, 06:56 PM Originally posted by Paul-ukhost
If your clients are paying monthly then 50% off next months payment is a good gesture. If they pay annual then 25% off their next years plan is a good offering.
20 hours downtime is a long time and I imagine you will see some clients say their goodbyes over this, fingers crossed for you that this does not cause you too much damage.
moral of the story, always have a backup CC that can be used on standby ;)
in fact, for quarterly, semestral, anual and bianual payment, i made proporcional to 1/2 month
so if it's US$ 120,00/year, it's like US$ 10,00/month, so the discount is US$ 5,00
btw
moral of the story: always have 3 backup CCs! ;)
the main one and the other 2 I tried didn't work
just got it work in the 3rd...
Lem0nHead 05-12-2004, 10:06 AM 24h now and just one client canceled (but he hadn't paid for 6 days... the account would be suspended today, so I guess he already though about canceling)
but there may be some clients waiting to get closer to the pay day to cancel, fearing that i cancel the account right away...
or choosing another hosting and moving things before they request
don't know yet
ajitknox 05-25-2004, 11:57 PM Revise your terms of service and let them know that you will give them a pro rated discount on the number of days you were down. You should not be held responsible for once in a while downtime. Afterall, **** happens.
jezzomaster 05-26-2004, 12:29 AM I would say revise terms of service and tell them you are really sorry.
CertaServers 05-26-2004, 01:20 AM We had a similar problem the beginning of May.
Our server that controlled all the DNS was attacked and unplugged. This caused an outage for 14 hours to all clients.
Even though it was not our problem, we credited each account 50% for one month. This helped show our customers that we really do care.
Most all clients that were angry calmed down after learning of the refund.
jezzomaster 05-26-2004, 01:22 AM Yea, that sounds pretty good ;) I will keep that in mind.
Yaser 05-26-2004, 01:56 AM Different hosts compensate in different ways. The best way i think would be to give them a free month of hosting or provide a value added service and send them a sorry letter which addresses the cause of downtime. If your customers have commercial sites it could mean monetary damage, which you can either compensate by a generous discount on hosting or else they can make a court case and sue you for damages.
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