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Thread: Merging acquired hosting clients
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03-30-2006, 05:27 PM #1Junior Guru Wannabe
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Merging acquired hosting clients
My firm is currently acquiring another web hosting company, and we have found that the hosting plans of the other company are not the same as ours. They offer different bandwidth and disk space at different prices. They are currently just a little cheaper than our prices.
Has anyone run into this problem when acquiring hosting accounts? Should we uphold the existing prices and account features to prevent the loss of these customers that we are purchasing?
Thanks in advance for all of your responses.
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03-30-2006, 05:33 PM #2Invented the Internet
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You should have had all of this sorted out before you made the deal.
You should leave the existing accounts as they are. Start changing them and the customers are going to get angry and leave. It certainly wouldn't be a good way to start off your new relationship with them, that's for sure.
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03-30-2006, 05:35 PM #3Web Hosting Guru
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We've been through this process of acquiring other business with different pricing and plans to our own.
One of the decisions you make when acquiring that business and the clients is how you will handle the difference. In all honesty, you need to freeze those customers at the pricing and resource level they are on, otherwise you rick losing them. If you lose the clients then you have paid money out for nothing.
In any purchase like this, you need to keep those clients for at least a year to make it worthwhile. You have the actual cost of purchase, together with your other costs in migrating clients, sorting billing systems etc.
In any case of purchase, I would only purchase if it made financial sense for us to do so and be able to keep those clients on the same pricing and plans. In our case some of the pricing actually went up in real terms as we are a Uk Vat registered business and thus had to add Vat to the prices we inherited.Mick Beeby
www.reyaltec.com - Quality Helm Dedicated, Reseller & Shared Windows 2003 Hosting. UK & US based servers.
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03-31-2006, 02:20 AM #4Web Hosting Master
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I would say keep the packages the same, why would they want to pay more for less? Also, if there's only a slight difference it won't be much of a loss on sales rev. A lot of that additional space is probably never used.
If in time you want to increase/limit their packages maybe give a reason to, rather than, we're a new company and we want more money - not a good first impression and the clients might not want to pay more when they don't know what the service will be like.Web Handyman - Website and Internet Marketing Service
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03-31-2006, 11:27 AM #5Junior Guru Wannabe
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Thank you for all of your opinions. After building some trust with these clients, I may alter their packages that will benefit both these new clients and my existing hosting customers.
Thanks again for the help, and I will certainly take your comments into consideration when making my final decision.
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03-31-2006, 11:57 AM #6Junior Guru Wannabe
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You should have had all of this sorted out before you made the deal.
You should leave the existing accounts as they are. Start changing them and the customers are going to get angry and leave. It certainly wouldn't be a good way to start off your new relationship with them, that's for sure.
Definitely creates bad publicity.
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03-31-2006, 11:59 AM #7Junior Guru Wannabe
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After building some trust with these clients, I may alter their packages that will benefit both these new clients and my existing hosting customers.