It sounds so easy, yet the graveyard of business is littered with the tombstones of companies that never found the answer. Well, that’s not entirely true; some companies had the answer, but couldn’t articulate it in terms of products and services. Other firms had answers, too, but to questions that were not being asked. And, still others tried to re-define the question in time of change for the Internet services industry.

Determining what customers want sounds like such a cut-and-dried proposition, provided customers themselves know the answer, and therein lies the rub. Web hosting sounds so generic; anybody can do it and the Internet’s short history shows that almost everybody has tried. The industry’s evolution and maturation have yielded dual results: the weeding out of the weaker companies and the emergence of niche providers. Shared or dedicated? Windows or Linux? Fully managed or self-managed? Cookie-cutter solutions or build your own? No wonder customers are confused.

Of course, the heart of the confusion lies in the industry’s relative youth. Features that didn’t even exist a few years ago are now industry standard. As hosting becomes more commoditized, customers have increasing access to basic plans that offer more for less. It's like anything else that evolves from amenity to necessity. Take cell phones, PDA's, even PC’s as just a few examples; prices continue to drop while capabilities increase. At the same time, customers understand the difference between basic and premium services, and companies who get caught up in price automatically cut into their potential market share.

If price were the sole consideration for every buying decision, no one would drive a luxury car, no one would have a plasma screen television, and no one would stay in a four-star hotel. Customers who want the cell phone that has games, makes fries, tap dances, and stores music will pay for that capability; customers who want nothing more than a portable phone will pay for that. Same with hosting, which is why many providers cater to specific markets. With that in mind, one answer to the title question is that there is no one answer, which is evident by what customers look for in shopping for a provider: •How much can I get for how little? •I want ping, power, and pipe with self-management. •I need a reseller program with profit margins and a provider that understands I’m more than a customer.

In each instance, value is a relative thing, and in each instance, there is an understood give and take between customer and provider: •The low-price leader usually offers a one-size-fits-all plan with limited support; curiously, the most price-conscious customer frequently exacts the heaviest support burden. •The discount dedicated server offers the win-win of cheap bandwidth and cheap hardware. These solutions are usually un-managed, but the customer who buys them typically needs little support anyway beyond global issues. •Resellers get industrial infrastructure at a discount rate, the provider assumes resellers understand hosting, and both sides understand that problems are shared.

Often, a customer’s wants boil down to a couple of things: getting what is being paid for, and someone to answer the phone when it rings. It is easy to get caught up in the technology of the industry and forget that hosting is a service business. Think of how irritated you get when dealing when navigating the myriad options of your phone company’s automated menu. But, what are you going to do about it? Unlike utilities, however, ISP’s have no territorial monopoly meaning customers have options, especially customers who are unsatisfied. Let’s assume for a moment that the providers who’ve lasted this long already know this. They pay attention to what customers tell them, they respond to complaints and inquiries, they even incorporate good suggestions. That’s one important step in survival but more than good phone etiquette is required in providing quality service; it’s also about being able to offer customers what they want before they have to ask for it. Of course, before a service provider can know who its target is, it must first be clear about its own identity: should the focus on increased automation or on value-added features, and is the primary customer the enterprise market or the SME?

Few service providers are equipped to fully do either #1 or #2, let alone both. That’s the reason so many providers have more partners than organically developed features. Partnerships allow companies to offer additional products and services at a fraction of the cost of in-house development thereby making enhancements affordable for the customer.

As to the second point, the SME marketplace remains the key battleground because of its size. Of the millions of small businesses in the US, there is a sizeable percentage with no web presence and among companies that are online, plenty have sites that are little more than digital brochures. As those businesses grasp the value of having an online component, service providers grapple to introduce features that are relevant, features that reflect what the customer wants.

The struggle to create value is the key to the question being posed here. Economic signs say this should be a good year. Companies are spending more on IT, particularly on hosted applications that improve office efficiency. That efficiency, however, means fewer jobs so people pushed out of the corporate world have turned to self-employment. That, in turn, means more businesses with online components that demand servicing as they, like their former bosses, try to do a lot for relatively little. Companies that can offer bolt-on products that improve productivity certainly provide one thing customers want.

Bottom line is, customers want service, however providers choose to define that. There is the personal tough that regionally-based companies can offer through their closer connection to customers. There is the feature-focused approach, giving people what their businesses need in order to be successful. There is the value-based proposition and its ever-lowering prices. There is also the reverse – the premium provider – which charges more but has the burden of proving its worth. And there is the universal imperative of being accessible to customers, ready to listen to them, willing to respond to concerns, and able to implement necessary changes that answer the question that drives their business.

About Author :
Alex Lekas is the VP / Marketing & Corporate Communications for AIT, a web hosting and ecommerce services company that powers 191,488 business sites on the Internet.