Retaining customers is important to all companies but for web hosts it is most important. This is for a number of reasons explained below.

Competition

There is a huge amount of competition between web hosts. There are lots of them and some are really huge and others are pretty small. It is really important to be able to stand out above the rest in order to pick up business. This can be a huge challenge and although finding new customers is really important to do, retaining old customers means that you are not losing them to the competition. So you need to ensure that you work hard to make sure that the competition does not take your customers when their hosting comes up for renewal. Whether you are big or small, expensive or cheap it can very much come down to the service that you provide. This is not just about offering good value for money for the products that you sell but also about making sure that your customers get their queries, questions and complaints dealt with well. Good customer service can be key to competing with others and if you can make all customers feel that they are getting a personal service so that they feel valued, theyw ill be more likely to keep their hosting with you.

Marketing Costs

It can cost a lot of money to find new customers. You may have to do a lot of expensive marketing and advertising in order to make people aware of you and your services. This can also take time. You may find that as a result you do pick up new customers but to really make those costs worthwhile you want those customers to stay with you. This means that you will continue to get an income from them without having to pay out so much money in marketing to make them aware of your brand and encourage them to switch to you. Even if you do a lot of free marketing this still takes effort and time and that time and effort could be used for other things which are more profitable for you, if you did not have to work so hard to find new customers but retained customers instead.

Administration Costs

It can also cost money to set up new customer accounts with regards to the administration required. You may also have customer service costs if they telephone and have questions about how things work etc. If you can retain a customer, it is unlikely that they will have so many questions and you will already have all of their details on the system meaning that you will be able to just leave them there rather than sorting out all of those details again. It may not seem that much, but these sorts of costs can really add up and a little saving made for each customer can make s big difference in the long run and can end up making you significantly more profitable by the end of the year.

Recommendations

If you can retain a customer it means that they like you and the service you provide or at least they do not hate you! Word of mouth recommendations are some of the best that you can get because they are free and the new customers already have a positive view of you. If you can retain customers that like you and the service that you provide they will hopefully be more likely to recommend you to others. Some people never do this sort of thing but there are some people that do and they could be the perfect way for the company to pick up new customers.

So with so much competition it is really important for web hosts to not only find new business but to retain the business that they have already. Retaining customers is cheaper with regards to marketing and administration and it could mean that they recommend new customers as well. In fact it has been found that if you retain customers you can massively increase profits. Some statistics show that if you increase your customer retention by just 5% your profits increase by 125% as it can cost up to five times more to find a new customer than to keep a current one. It is therefore important for a web hosting company to do what they can to retain their customers to make sure that they are still able to compete in a very busy marketplace. Consider what you can do to make your customer service better than your competitors. This is not just about price but about how well you communicate with customers and respond to their enquiries as if a customer feels valued they will be more likely to buy from you again.