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  1. #1

    How to get rid of a customer?

    Hi guys,
    I need some brainstorming on an issue.
    There was a time when I was overselling. I went to 1and1.com and tried to compete with their prices, and even a little lower. (DUMB, I know)
    To make a long story short, I ended up with this one customer who has a 30GB HDD /1000GB BW for only $18.95/month. The problem is that he DOES use about 23GB out of his account. He has this fans website with lots of videos.

    I just changed servers and it was a PITA to move that single account.

    I was wondering if anyone would want this customer or knows a polite way to tell him: "Look buddy, you got a great deal, but the deal is over. If you want to keep the account you will have to pay almost 3 times what you're paying now or move it elsewhere."

    Thanks for your opinions.

    PS: Mods, feel free to move this thread if I posted it in a wrong forum.

    PS2: If anyone is interested in this client, I am MORE than willing to sell him up.
    Ivanner Mora
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  2. #2
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    If i were you I would nicely tell him you need to charge him more, and if you're comfortable with this...even tell him why...some people would be impressed with the honesty and he might stay with you at the new rate...or he might not....better to try it than to give him away with no trying...
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  3. #3
    You've got yourself a nasty problem Anyway, when people oversell they have some kind of plan B - like CPU usage limit or MySQL queries limit or something like that. Don't you have anything in your ToS?
    I would have suggested to take him over, but I am not on cPanel and the control panel that I use is not compatible to anything so the transfer would be a pain...

    Anyway, maybe someone else would be able to take him.

    If not, I suggest telling the customer the truth, of course in a polite way - just explain him that in order to improve quality you had to move to a new data center / vps or something like this and you cannot offer this package at the same price as before. As irisfire said, honesty may even make him pay 3 times more and stay with you
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  4. #4
    Quote Originally Posted by neorlin
    I suggest telling the customer the truth, of course in a polite way - just explain him that in order to improve quality you had to move to a new data center / vps or something like this and you cannot offer this package at the same price as before.
    Thanks irisfire and neorlin, I will give it a try to charge him more, explaining that I just moved servers to improve quality.
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  5. #5
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    irisfire has a good point, you could be open and honest with him/her. Just might work. Has he paid for a specific length of time? (Yearly? Monthly?) How much does he have left?
    I didn't notice any TOS on your site, although I could have missed it. Do you have one? What does it say?
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  6. #6
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    I had a similar issue with a customer paying $9.95 / month, who had over 100 sub accounts. We gave him 30 days notice, which worked fine.
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  7. #7
    Hey the thing with the TOS is that (in most cases) you say they are subject to renewal without a notice. So just update them and tell him that he needs to pay more. Just don't even come close to the best on the market - have your strategy thought up first, consult with some specialists and then try to offer something new
    Just my 2 cents
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  8. #8
    Quote Originally Posted by Jim2Macs
    irisfire has a good point, you could be open and honest with him/her. Just might work. Has he paid for a specific length of time? (Yearly? Monthly?) How much does he have left?
    I didn't notice any TOS on your site, although I could have missed it. Do you have one? What does it say?
    Here is the TOS:
    http://www.dotanything.net/agreements.php

    You get to see it (and accept it) when placing an order.
    Ivanner Mora
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  9. #9
    Quote Originally Posted by maiahost
    Hey the thing with the TOS is that (in most cases) you say they are subject to renewal without a notice. So just update them and tell him that he needs to pay more. Just don't even come close to the best on the market - have your strategy thought up first, consult with some specialists and then try to offer something new
    Just my 2 cents

    Yes, I learned it the hard way
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  10. #10
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    Ivanner, per your TOS, first sentence on #6 reads > The Company reserves the right to cancel the account at any time.

    Last paragraph of #6 > Only first-time accounts are eligible for a refund. For example, if you've had an account with us before, cancelled and signed up again, you will not be eligible for a refund or if you have opened a second account with us.

    "a)" in #7 > Use 25% or more of system resources for longer than 90 seconds. There are numerous activities that could cause such problems; these include: CGI scripts, FTP, PHP, HTTP, etc.

    So legally your all set. Just try and be nice to the guy and explain to him somehow about your issues. Like said earlier in this thread, you might just luck out and keep him at a higher rate.
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  11. #11
    Am i missing something here? i saw one guy false advertising or "overselling" and then like 5 people try to help him? IF YOU SELL 30 GB HD AND 1TB BW THEN YOU SHOULD HONOR IT. I personally will never use your hosting. So what if you have 1 customer that uses more, you should have plenty of others that don't. If I was that customer, I'd be ready to sue you.

    If I were you, I would continue allowing him his bw/hd usage for the remainder of the contract, and when the contract is over, you can charge him the new cost of the plan or he can choose to leave. That way the customers you have currently, will think you have integrity. haha integrity, so many a company sold their soul and morales for such little profit. Lose money on this customer and have happy customers so you have a customer base, rather than an angry mob of people spamming why your webhost sucks and cheats them, and have potential customers uneasy.
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  12. #12
    Hi there

    Quote Originally Posted by Ivanner
    Thanks irisfire and neorlin, I will give it a try to charge him more, explaining that I just moved servers to improve quality.

    Could you please give us the output of your request to the custumor....
    is allways nice know how they react



    thanks


    Lc
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  13. #13
    I'd go down the honest path, and tell him, truthfully, what's happened, and what will happen because of your overselling.
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  14. #14
    Quote Originally Posted by heyzeus
    Am i missing something here? i saw one guy false advertising or "overselling" and then like 5 people try to help him? IF YOU SELL 30 GB HD AND 1TB BW THEN YOU SHOULD HONOR IT. I personally will never use your hosting. So what if you have 1 customer that uses more, you should have plenty of others that don't. If I was that customer, I'd be ready to sue you.
    I am so sorry about my previous comments, but buddy just live with it. If you offer something such as UNLIMITED space or UNLIMITED bw the truth is SO is going to get close (i.e. use 10GB of space or 500 GB of BW). Now we are trying to help someone that said he did a mistake. Think about it - how many of the companies that oversell are going to come up here with such statements. We were wrong etc.
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  15. #15
    heyzeus,
    I understand your point. I have been honoring the account until now.
    As jim2macs said, legally, I can't be sued, as the customer agreed to the terms of service, including the company's right to cancel an account.

    If I were you, I would continue allowing him his bw/hd usage for the remainder of the contract, and when the contract is over, you can charge him the new cost of the plan or he can choose to leave.
    That is exactly what everyone here is suggesting. The contract renews monthly, so I am offering him 30 days to move his account or pay the new fee.

    White Shadow,
    I will post his reaction. I just sent out a nice email even explaining what overselling is.
    Ivanner Mora
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  16. #16
    Quote Originally Posted by Ivanner
    heyzeus,
    I understand your point. I have been honoring the account until now.
    As jim2macs said, legally, I can't be sued, as the customer agreed to the terms of service, including the company's right to cancel an account.



    That is exactly what everyone here is suggesting. The contract renews monthly, so I am offering him 30 days to move his account or pay the new fee.

    White Shadow,
    I will post his reaction. I just sent out a nice email even explaining what overselling is.
    ahh monthly makes more sense to me i assumed he had paid in advance, and you wanted to raise the price. sorry if i overeacted, just that companies such as dreamhost and such with massive overselling and their devious little loop holes pisses me off to no end.
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  17. #17
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    Quote Originally Posted by Ivanner
    heyzeus,
    I understand your point. I have been honoring the account until now.
    As jim2macs said, legally, I can't be sued, as the customer agreed to the terms of service, including the company's right to cancel an account.
    A TOS clause that you can cancel an account for any reason would never hold in the majority of courts, laywers include it just on the off-chance that a court might uphold it.

    Think about it, what would be to stop someone saying that in their TOS, then once you paid them they tell you that they have cancelled your account "because they felt like it". You can only cancel them for a legitimate reason and using the resources you advertised is not a legitimate reason to cancel an account.

    I realise this guy pays monthly so you don't need to invoke your TOS on this, but don't ever try to hide behind that clause because any savy person would know you were clutching at straws.
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  18. #18
    Anyway, nobody can force me to give services to someone.
    I am being polite and giving him 30 days notice.
    After 30 days I will not receive any more payments from him (unless he pays the new fee), and thus, I am not obligated to host his site anymore.

    Even without the TOS, I am legally safe.
    Ivanner Mora
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  19. #19
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    It's really pretty simple.

    If you are on a month to month payment basis, give him notice that he can either upgrade to your new plan and pricing or he can discontinue using your service. There is nothing wrong with that. It is a common practice, it does no good to have a client that you lose money on each month.

    Be professional and polite, you don't need to tell him you were overselling, you can just tell him that the plans you previously offered no longer meet your current business structure and as such he has to upgrade or you'll unfortunately lose him as a client.
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  20. #20
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    heyzeus, I can certainly agree with you and know how you feel. My reason for joining in this discussion is the fact that he admitted he screwed up in the past and is learning his lesson. We all make mistakes, but I'll be the first to offer my 2 cents worth to anyone that wants to do it right.
    Jim - 2Macs H-Sphere Web Hosting
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  21. #21
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    I realise this guy pays monthly so you don't need to invoke your TOS on this, but don't ever try to hide behind that clause because any savy person would know you were clutching at straws.
    Then again, how many suits do we see over a couple of dollars?

    The customer pays monthly. You give him the month of service he already paid for, a notice with enough time to pack his "bags" and move, and tell him good bye.

    Is this nice? No. Do we have to like it? No, even though the customer did it to himself to a certain point.
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  22. #22
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    simply say he uses to much resources etc, and say he needs to pay extra to compesate etc, or say something like your over doing your hosting account, the limit was for web files only, not video files etc etc blah blah, im sure he'll stay with you. or he's got alot of moving to do. lol
    Martyn
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  23. #23
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    So much for integrity in hosts though.

    But you learnt a lesson, and we all shall learn from it also. It's a way to get customers and it does work though.
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  24. #24
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    Yeah, I too would recommend just being honest with him.

    Say in order for you to continue to offer the level of service he's used to he'll need to pay more money to accomodate the bandwidth/drive space he's been using. If he values your service he'll stick with you. If he doesn't, he'll go elsewhere. Also, being honest and just saying you're paying more for his account then what you're taking in should be enough for him to understand it's not an effective business model for you in the long run.

    If he does decide to go elsewhere, be sure to offer him a solution for finding another host. At least this way you're still providing a solution...and all customers enjoy being looked after.
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  25. #25
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    I have to agree with HeyZeus. If you offer a deal you need to honor it. If you don't it reflects poorly on your company, and remember one person will tell 10 people if something goes wrong. Your best bet is to eat the profit loss on this customer, and bite the proverbial bullet. It would be unethical to go back on a deal you offered
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  26. #26
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    Quote Originally Posted by jmcallister
    I have to agree with HeyZeus. If you offer a deal you need to honor it. If you don't it reflects poorly on your company, and remember one person will tell 10 people if something goes wrong. Your best bet is to eat the profit loss on this customer, and bite the proverbial bullet. It would be unethical to go back on a deal you offered

    I respectfully disagree with your statements here. On a month to month customer there is absolutely nothing wrong with renegotiating terms. The "lease" is for 1 month of service, if it was for a term of let's say '6 months" that would be a different story completely.

    If I rent a house to someone on a month to month basis for $400/month and suddenly my property taxes increase or the water/garbage/sewage bill increases I have a right to pass that on to the tenant, if they don't want to pay more they have a right to find a new place to live. I'm not going to kick them out into the street without giving them notice of course but you always have the option to renegotiate terms, it's basic economics.

    The OP had an unrealistic business plan to begin with, fortunately he saw the error of his ways and is correcting his actions.
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  27. #27
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    How about we agree to disagree.

    Obviously, the integrity of the operator isn't as high as some of us here.

    In either case, they wish to operate their business differently, regardless morally, ethically or opionionally wrong.

    People will and always have conduct their own business, their own way.

    We can only comment and assist those in areas of wrong doing or help them improve.

    In this case, he has made a business error and is paying the price. He may not know how many customers that user has referred etc, it's up to him to consider his options and take action.

    However, selling off this client isn't right. Because you're choosing not to cater to him and put him off to someone else, then again, that's up to you and that's business.

    End of the day you make the profit and that's your goal.

    Now come on guys, we can't be that naive. What he has done is "wrong" but is it really?

    We are running a business and to make a profit.

    In this case he is also trying to minimise his costs.

    Anyway, he's made his decision and is doing what he has to do in order to survive.
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  28. #28
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    Quote Originally Posted by Katatonic
    We are running a business and to make a profit.
    With your 'ethics' I'll be sure to stear clear of you if I need hosting ....
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  29. #29
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    Quote Originally Posted by Ivanner
    After 30 days I will not receive any more payments from him (unless he pays the new fee), and thus, I am not obligated to host his site anymore.
    Do you intend raising all your prices, or just for this one (and any others who might want to use what was advertised)?
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  30. #30
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    Good point

    Quote Originally Posted by anon-e-mouse
    Do you intend raising all your prices, or just for this one (and any others who might want to use what was advertised)?
    I would hope that the OP intends to totally revise his plans for all of his customers, otherwise it would be quite despicable IMHO.

    Jmcallister's comments make good sense, and I agree that it is unethical to back out of the deal. If this deal is posing a fiduciary threat to the business (which would be hard to believe) then the OP would have to deal with it somehow, but at the very least it would only seem fair to provide a couple of months "head's up" time, and to also present new plans to all clients on the same package. Unfortunately, the topic title, "How to get rid of a customer?" reveals an attitude that I would not want to have to deal with in a vendor.
    Last edited by uberhostNET; 08-31-2006 at 06:01 AM.
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  31. #31
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    It's easy for us to stand on the side lines and pass judgement or spit out moral values and claim ethics. What if we revered the roles and were losing money instead of the original poster. When my money is at stake I would definately start considering similar options.

    A monthly contract is a monthly contract. It is subject to change. A yearly contract is a yearly contract with a locked in rate. Cut the guy some slack. He had the courage to come here and ask for advice knowing he might got flamed for it. Would you be able to do the same in his shoes?

    this only applies to people who still consider the original poster dispicable.
    Last edited by cywkevin; 08-31-2006 at 06:02 AM.
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  32. #32
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    Quote Originally Posted by pixelized
    It's easy for us to stand on the side lines and pass judgement or spit out moral values and claim ethics. What if we revered the roles and were losing money instead of the original poster. When my money is at stake I would definately start considering similar options.

    A monthly contract is a monthly contract. It is subject to change. A yearly contract is a yearly contract with a locked in rate. Cut the guy some slack. He had the courage to come here and ask for advice knowing he might got flamed for it. Would you be able to do the same in his shoes?

    this only applies to people who still consider the original poster dispicable.
    Well then you're inferring that I called him despicable, which isn't correct. I said that if he only changed terms on the customer who he wants to "get rid of" that it would be despicable. And it would. You don't agree?
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  33. #33
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    If that one customer was using more than his fair share and everyone else was fine then I would not agree with you. That would be punishing all for the actions of one. Sure the original poster got himself into a sticky situation with a misguided business plan, but why should we criticize a reasonable solution to a problem by branding it as dispicable.

    Keep in mind that usage isn't just measured in disk space and transfer. There's also cpu usage. We don't have all the facts yet.
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  34. #34
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    Quote Originally Posted by pixelized
    Sure the original poster got himself into a sticky situation with a misguided business plan, but why should we criticize a reasonable solution to a problem by branding it as dispicable.
    Why should you brand it as a "reasonable solution" if you don't think we have all the facts yet, lol? What I said was despicable was the scenario of a host changing terms on a single customer for the sake of getting rid of him. If there are issures that the OP hasn't mentioned (such as CPU usage) and the client is violating his agreement, then "despicable" doesn't enter into the equasion, obviously.
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  35. I would explain to him that you need to make more money and running him under that price is meeting your economic goals. Consumers should understand that this world is a capitalist world
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  36. #36
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    The best way to tackle such problems is to have a proper Service Level Agreement defined for customers and resellers and also have a proper Acceptable Use policy for the customers and resellers.

    <<Signature to be setup in your profile>>
    Last edited by anon-e-mouse; 08-31-2006 at 07:37 PM.
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  37. #37
    Quote Originally Posted by anon-e-mouse
    Do you intend raising all your prices, or just for this one (and any others who might want to use what was advertised)?
    Just this one. It was a bad deal done back in January. I learned my lesson and changed the prices to realistic ones.
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  38. #38
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    Quote Originally Posted by Ivanner
    Just this one. It was a bad deal done back in January. I learned my lesson and changed the prices to realistic ones.
    What I used to do when I was actually colocating servers and renting dedicated servers was calculate my cost and do a break down of "At Cost" pricing. Then add a a proper markup thats competative and "realistic" in the hosting market. In excel make a row stating "Plan 1" "My Cost" "My Markup" "Total Cost" the -My Markup- would potentially be your profit margine for that plan. Whether its $2 or $20 thats your margin.

    Never oversell a good lesson learned always make sure your server is running at optimal performance and there is "growth" room for your current customers. If your dedicated server has 1000GB and your at 800GB Transfer I would purchase another server so your current customers have "growth" becasue transfering a customer or paying overage fee's will not help your profit margine for that server!

    Good luck in the future and make sure your pricing is realistic I hope this advice helped you! I have this pricing charts for all my represenatives based on hosting, colo, servers and upgrades! So you can quote someone and do it without making FAST -Irrational Decisions-!

    Good Luck again and best of luck
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  39. #39
    Just add a new TOS clause that says he can't use more then 50% of his diskspace to media or zip files.

    Though personally, I think you made your bed, you need to deal with it honestly with the client.
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  40. #40
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    This is exactly the reason why hosts should not oversell, but hosts continue to do it. I would say about 3/4 of all hosts oversell. It's terrible!!

    If you asked me, Ivanner pulled a bait and switch on his customer. Ivanner advertised a certain amount disk space and bandwidth to be competitive and he made sales with it and now he's removing his offer. That's poor business if you ask me. Now matter how honest he is to the customer, I view this as poor business and poor business planning.

    It's interesting how hosts in general are practically "overselling", but yet in this forum, most of the hosts say they do not like it, but yet they still do it. Furthermore, many of these hosts, in their T&C's, say that if a user is using too much disk space and bandwidth, even if the customer isn't using the amount that they are supposedly allowed, the web host can still shut down the customer's web site. Again, the classic old, bait and switch. "I'll advertise that you can use X amount of disk space and bandwidth, but if you begin to actually use that much, I'll hide behind my T&C's, and remove you as a customer."

    I guess what I find even worse, is that all the hosts that responded to this thread are approving of the bait and switch tactic as long as he is "honest" with his customer. Absolutely awful! How come Ivanner, not just him, but how come hosts can't have been honest in the first place and advertise a reasonable offer that is capable of being delivered?

    All web hosts, please be honest in the first place (i.e. in your advertising) and not after the fact.
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