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  1. #1

    Quality service vs. Quantity service?

    Is it really better to offer a more quantity service(more space, bandwidth, bad support, etc vs. less space, bandwidth, better support, etc.) vs. a quality service?

    My logic behind this is by looking at the big boys - Hostrocket, powerweb, 1and1, etc. Yes, there are a few sucessful quality hosts, but i'd say the majority of the big boys are the quantity hosts.

    Opinions?
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  2. #2
    Good question, right now i am doing quality service instead of quantity service. I am interested in finding out which is better business wise.

  3. #3
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    Well I've seen first hand that Quantity sells its self.. where as for quality it would take a lot harder to work on...

    -Chris

  4. #4
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    But take a look at some of the other big boys, maybe the less prominant ones (httpme for example) who are quality hosts, and they seem to be doing just as good.

    Quantity hosts need to market/advertise constantly in order to keep getting clients. Quality hosts just need to do their thing (provide quality) and the clients will come in droves via word-of-mouth.

    Personally, I would rather have good word-of-mouth referrals than a banner on WHT for a couple months.

  5. #5
    As a customer, I'll say that Quality is all that important and what sets a good site from the others.

    With Quality service, you do not need to work too hard to promote your business because when you have satisfied customers, they will be your agents who would promote your business for you. 3rd party first-hand experience and review would be value above what the web host own's claims.
    http://www.batchimage.com - Offering Batch Image Processing and TIFF/PDF Software Solutions

  6. #6
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    Re: Quality service vs. Quantity service?

    Originally posted by dbbrock1
    Is it really better to offer a more quantity service(more space, bandwidth, bad support, etc vs. less space, bandwidth, better support, etc.) vs. a quality service?

    My logic behind this is by looking at the big boys - Hostrocket, powerweb, 1and1, etc. Yes, there are a few sucessful quality hosts, but i'd say the majority of the big boys are the quantity hosts.

    Opinions?
    If you want to be "big" then I guess quantity is the key .

    But as a 'quantity host' you have to take immense care about quality of your services and about automating everything you can. Otherwise you will not survive heavy growth.

    Customer Support is very difficult, too. Servicing 100,000+ or even 1,000,000+ customers is a very special task. You need a perfect organisation behind that.
    Andreas Gauger
    Chairman of the Board
    1&1 Internet Inc.

  7. #7
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    Dec 2001
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    515
    I would imagine that it would be very difficult to host 100,000 sites and be considered a quality host. With that many clients, there will have to be some that are unhappy for one reason or another. It would also be very difficult to have any personal relationships, something that I see most quality hosts doing.

    Just my thoughts, I've still got a couple hundred thousand accounts to go before I really have to worry about this....
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  8. #8
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    From what I have been reading seems Quality would be better then Quanity.

    I would rather have a client paying $20.00 then 10 clients paying $2.00.

    Though when you have Quality Clients they exspect to have Quality Services, and Quality Support.

  9. #9
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    Everyone has different views on this. Personally, I prefer quality over quantity anyday. Why? In the end, your work will be paid off and your clients will be happy with the service and support in which you give.
    EightyFivePhotography.com - Personal Photography Portfolio
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  10. #10
    It would definitely be difficult but it is not impossible. I believe as long as the tech support and service quality grows at the same rate as the sales growth, it will work out fine.

    From what I understand here, 1&1 targets local markets and supports them, in this way they could control their growth while still providing the needs of the local market.
    http://www.batchimage.com - Offering Batch Image Processing and TIFF/PDF Software Solutions

  11. #11
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    Quality service, or find a place in the middle

  12. #12
    I certainly do not define the *big boys* by the number of servers or clients they have. In my opinion the *big boys* are the ones that remain debt free and have the largest numbers in black ink at the end of the year. They are probably not the ones in your list either...

    Which million dollar company is more intelligent, the Company that grosses $10,000 per server with 100 servers and 1000 clients or the company that grosses $1000 per server and has 1000 servers with 10,000 clients? Which one would have lower overhead? Which one has fewer clients resulting in less support issues? Which one has the better profit margins?

    Intelligent consumers want and will pay for quality....

  13. #13
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    I was waiting for a discussion on this....sorta fits my title

    Through my experience Quality clients will always be better in the long run than quantity clients. Quality realizes the service offered while quantity is only looking for the better deal, and could move at any time.
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  14. #14
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    When we first started out, we concentrated on business clients who would pay us up to $200 a month for hosting and support. That gave us a good base from which to grow and we have been in the black since Day-1.

    Last year, we decided to go into retail hosting and determined that we had to have value pricing to attract the kind of customer we were going after now. That has worked out very well also and we continue to see growth and profitability.

    I think it is very possible to provide good service and a good value at the same time in the hosting business. That's what we aim for and I would like to think we are keeping our customers happy by doing so.
    Mark Oberg
    Techweenies.com

    (No longer affiliated with Uneedawebsite.com)

  15. #15
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    Chicago
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    Re: Quality service vs. Quantity service?

    Originally posted by dbbrock1
    Is it really better to offer a more quantity service(more space, bandwidth, bad support, etc vs. less space, bandwidth, better support, etc.) vs. a quality service?

    My logic behind this is by looking at the big boys - Hostrocket, powerweb, 1and1, etc. Yes, there are a few sucessful quality hosts, but i'd say the majority of the big boys are the quantity hosts.

    Opinions?
    I say do both -- provide quality service in large volumn. Make money
    and keep your customers happy at the same time. Win, win, win.
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  16. #16
    Originally posted by Torith


    I would rather have a client paying $20.00 then 10 clients paying $2.00.
    I don't think that's a valid statement in this case. I would rather have:
    100 clients paying $10/month
    vs.
    5 clients paying $100/month
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  17. #17
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    It works both ways.

    You can argue that having more clients makes you less hurt if one
    or two of them leave.

    Or you could argue that having less clients is less worth thus more profit.

    Dan
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  18. #18
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    Originally posted by dbbrock1
    I don't think that's a valid statement in this case. I would rather have:
    100 clients paying $10/month
    vs.
    5 clients paying $100/month
    Couldn't have said it better... or ... maybe:

    1000 clients paying $5/month
    vs.
    5 clients paying $100/month
    Andreas Gauger
    Chairman of the Board
    1&1 Internet Inc.

  19. #19
    Originally posted by gaugi
    Couldn't have said it better... or ... maybe:

    1000 clients paying $5/month
    vs.
    5 clients paying $100/month
    How is that a comparison? If you would like to even it out so the end result were the same then what would your reply be?

    1) 1000 clients paying $5 a month = $5000 and a lot of overhead to cover support for those 1000 clients.

    2) 50 clients paying $100 a month= $5000 and the overhead for support would be 5% of what the first scenario would be.

    I know which of these scenarios I would prefer...

  20. #20
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    Originally posted by Watcher_TVI
    How is that a comparison? If you would like to even it out so the end result were the same then what would your reply be?

    1) 1000 clients paying $5 a month = $5000 and a lot of overhead to cover support for those 1000 clients.

    2) 50 clients paying $100 a month= $5000 and the overhead for support would be 5% of what the first scenario would be.

    I know which of these scenarios I would prefer...
    Watcher, I think this is one of the many cases where you probably
    shouldn't argue. 1and1 has over two and a half million clients. You
    most likely don't have more than a few hundred. I think they know
    what they are doing

    Dan
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  21. #21
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    Originally posted by Watcher_TVI
    How is that a comparison? If you would like to even it out so the end result were the same then what would your reply be?

    1) 1000 clients paying $5 a month = $5000 and a lot of overhead to cover support for those 1000 clients.

    2) 50 clients paying $100 a month= $5000 and the overhead for support would be 5% of what the first scenario would be.

    I know which of these scenarios I would prefer...
    You are absolutely right.

    It is just my experience, having two different brands in Europe: 1&1 (low price) and Schlund + Partner (premium products) that revenue *and* profit are much higher on the budget side.

    It might be completely different in the U.S.
    Andreas Gauger
    Chairman of the Board
    1&1 Internet Inc.

  22. #22
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    Originally posted by gaugi
    You are absolutely right.

    It is just my experience, having two different brands in Europe: 1&1 (low price) and Schlund + Partner (premium products) that revenue *and* profit are much higher on the budget side.

    It might be completely different in the U.S.
    And you lose less money due to churn when a customer leaves
    if they only pay you $5 a month rather than $50.

    Snap!
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  23. #23
    Like I said earlier Dan, I don't judge the success of a company by the number of clients they have, I judge them by their profitability. Enron was living proof that bigger does not necessarily mean profitable and only a fool would think otherwise....

    I'm not saying that 1&1 is or isn't profitable, you don't get to be their size without taking in a lot of revenue that's for certain. However this is just basic business 101. Lower overhead, higher revenue equals higher profit margins.

    I have no clue as to what the market is like overseas. It may very well be that by sheer volume of people wanting budget hosting those lower cost hosting offerings are the way to go. It's my belief in the US that quality and reliability of the services for many small to mid-size businesses are much more important than the cost of those services (within reason of course). That doesn't mean there are not thousands of people out there wanting to give up $5 a month for hosting, I know they are out there too.

    Personally, I would rather do 6 figures with a dozen servers as opposed to 100 servers along with the added responsibility of all the people necessary to run those 100 servers.

  24. #24
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    Seattle, WA
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    Originally posted by midphase-Dan
    And you lose less money due to churn when a customer leaves
    if they only pay you $5 a month rather than $50.

    Snap!
    If churn is practically nonexistant, then it really isn't even an issue.

    It makes more sense to me to work to satisfy and retain your existing customers who will subsequently spread the word about your company via word-of-mouth, than to constantly try to make up for lost customers by trying to attract large quantities of new signups through extensive advertising/gimmicks/whatever the case may be.

    Of course, different companies have different business models. Some shrug off churn/lost customers as a mere consequence of doing volume, while others place a greater value on their customers and do everything they can to keep them happy so they want to stick around.

  25. #25
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    Originally posted by Watcher_TVI
    Like I said earlier Dan, I don't judge the success of a company by the number of clients they have, I judge them by their profitability. Enron was living proof that bigger does not necessarily mean profitable and only a fool would think otherwise....

    I'm not saying that 1&1 is or isn't profitable, you don't get to be their size without taking in a lot of revenue that's for certain. However this is just basic business 101. Lower overhead, higher revenue equals higher profit margins.

    I have no clue as to what the market is like overseas. It may very well be that by sheer volume of people wanting budget hosting those lower cost hosting offerings are the way to go. It's my belief in the US that quality and reliability of the services for many small to mid-size businesses are much more important than the cost of those services (within reason of course). That doesn't mean there are not thousands of people out there wanting to give up $5 a month for hosting, I know they are out there too.

    Personally, I would rather do 6 figures with a dozen servers as opposed to 100 servers along with the added responsibility of all the people necessary to run those 100 servers.
    I think it is time to stop arguing here.
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

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