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  1. #1
    Join Date
    Aug 2002
    Location
    South East London
    Posts
    454

    Advice in acquiring companies and clients

    How do you work out what is the right price to pay when purchasing hosting clients? And what is the best way to migrate purchased clients into your existing plans?

    For example, if you're smallest hosting plan is 10 per month. And you purchase 100 clients that are on plans from 2 to 10 with a range of different billing terms. Do you convince the customers on the 2 plan to upgrade to the 10, or do you just keep them on their existing plans?

    So what I'm effectively asking is how many times earnings is a client worth (taking into account monthly or annual subscriptions)? And what is the best way to manage the migration (as to avoide clients just moving elsewhere)?

    Any advice is appreciated.

  2. #2
    Join Date
    Aug 2002
    Location
    South East London
    Posts
    454
    Anyone?

  3. #3
    Join Date
    Jun 2003
    Location
    Calgary, Alberta
    Posts
    531
    Do a search on "Company Valuation" "Selling", etc...

    There are numerous good threads that will educate you in making an informed decision on how much to spend.

    Cheers!

    /bin/false
    Jason (JC) Morris, Vice President - Technology
    TechWest Hosting - Enterprise Plesk & cPanel Hosting Since 2003!
    Shared & Reseller Hosting on Dell Quad Core 5420 Servers w/ RAID 10 in Multiple Datacenters!
    Ruby on Rails, FFMPEG, Fantastico, RVSiteBuilder, RVSkins, Nightly Off-site Backups, Clustered DNS!

  4. #4
    Join Date
    Aug 2002
    Location
    South East London
    Posts
    454
    Found a good thread on how much a client is worth which answered all my questions (amazing what you can find with search):
    http://www.webhostingtalk.com/showth...5&pagenumber=1

    However I could not find any answers to my question on migration. I mean what if you are buying hosting customers on ridiculous plans (5pm for 1GB/25GB) which is obvious overselling! Is there a specific way to convince a 5pm customer to upgrade to one of our current plans (which start at 10pm), while keeping churn low?

    Or is the only way to keep them, is on their current pricing and sepifications? Finally, what about billing? There is the possibility that a fair percentage of bought clients will just go elsewhere and not update their credit card details on our billing system.

    Any advice is appreciated.

  5. #5
    Join Date
    Feb 2001
    Location
    West Michigan, USA
    Posts
    9,675
    Someone on a ridiculously cheap plan is probably not going to upgrade. Chances are the reason the "host" is selling is because that business model is not sustainable. I don't even bother considering those types of deals.

    --Tina
    ||| 99.999% Uptime SLA!!!
    Plenty of space and bandwidth to fit your needs!
    www.AEIandYou.com - - (WP Friendly - Premium Reseller Hosting and Cheap Dedicated Servers)

  6. #6
    Join Date
    Jun 2000
    Location
    Wichita, Ks, USA
    Posts
    1,984
    It all depends on the types of customers and the company. Customer value can range anywhere between 1-2x(monthly rate) x 12 months = value. When you purchase the company, if you want to keep a good retention rate, I would strongly advise AGAINST raising rates or changing any part of the service, customers will already be unhappy about the move, anything more will cause them to leave.
    affordablecolo.com carrier grade colocation at a affordable price!
    Charles Baker - Company Operations
    1-866-316-HOST

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