If you run a website hosting business, you already know the challenges in the business. Thousands of competitors are just a click away, ready to undercut your price.

Potential customers see hosting as a commoditiy and shop by price. Several directories like Hostreview, Acehosts and Hostindex make it easy to comparison shop.

How can you get more profits from your business under these conditions?

FIRST, GET THE CUSTOMER

Calculate the lifetime value of your customer. For example, let's say the average customer stays with you for 15 months and pays 16.95 a month. That means their lifetime value to your company is $254.25. So every customer you acquire makes your business (on average) $254.25.

If a visitor comes to your website, then leaves to comparison shop, you have more than likely lost that sale. Have you invested in sales copy that compels your visitors to buy from you? Does your website help him to see that you are the best choice for his situation? Showcase your credibility, guarantee services and offer incentives to try your service. Make it easy to buy from you.

NEXT, KEEP THE CUSTOMER

Because each customer is hard-won and the value of the customer is so high, you'll want to make sure you have the support services that keep your customers happy.

Once a customer leaves you for another website host, he's gone forever. You probably already make customer service a priority, with email answered in a timely fashion and well-trained technical support. Go the extra mile. Don't wait for customers to contact you. Ask your customer how you're doing.

THEN, SELL MORE TO THE CUSTOMER

The customer has already bought from you. There is familiarity and trust. You can easily offer complimentary items to your current customer list.

The major concern of your customer is how to succeed online. It's easy to offer online marketing tools, ebooks and additional services. It can be as simple as joining an affiliate program for an item your customer may need, then making him aware of the item.

Focus on these 3 areas, getting the customer, keeping the customer and selling more to him. You'll enjoy higher profits in your website hosting business.

You have carried out the hard part and that's creating the web site. The next step is to get it hosted as to allow the public find your site. So why do so many first time web host seekers fall into the trap of a bad web host company? Well there are a number of factors to consider and none bigger than the price. We all want cheap web hosting but unfortunately price is not always what you should go for.

You have to be more aware of the web hosting company that you choose. If you have a budget stick to it, if you see hosting for little or nothing and find yourself thinking "how do they make money" stay well away, the chances are your web site will be hosted with very little bandwidth resulting in a very slow accessible and unprofessional web site. You may also find that the customer service is little or none.

You need to clearly outline your own requirements to the web hosting company, if you do not do so you are at fault and not in any position to point the finger at others. If you make a list of requirements such as particular files you need etc you can send your requirements to multiple hosting companies and see who comes back with the greater service.

If you have more than one web site to host such as affiliate marketers it is not a good idea to put all your sites with the one web host company server to start with, you need to be 100% confident with the service, so start with one web site first as a test. Remember if you do host all your websites with one host company, all it takes is one problem to bring all your sites down and could result in lose of revenue for you. At least if you have some web sites hosted by another company they will still be online.

Some web host companies offer testimonials on their own web site from valued customers recommending them. Seeing is not believing, call these customers and get a face value recommendation for yourself.

What if I have problems?

Lets be honest, problems can occur and they maybe your fault and sometimes the web host company is to blame. Problems with technology can occur any time but it's how the hosting company react to the fault that will determine if you stay with them or not. If you find your web site dropping off line or downloading slowly at a regular basis simply change to another web host company. On going problems not fixed is a very bad sign and it shows arrogance towards their customers. Support is vital from a web host company and it should be 24 hour if it's a large organisation.

Virus Problems and Hackers

It is up to the web host company to ensure that your files are protected from virus and hackers at all times. There has been plenty of companies who have had their web sites hacked only then to find out that the web host company had not got the latest patches and security software applied. First timers to web hosting should always ask how often updates and what software is used to protect web sites.

Tips:

In business your web site can be a large source of revenue or sometimes your only source. Always do your own backup of the web site. If the web host company experience problems and for whatever reason has no backups available your whole business could be on hold. Backups are vital so do it as regular as possible or face the consequences. Some companies have testimonials on their web site from customers, do not be afraid to call these guys for an up to date reference.

If you where taking on an employee you would check all references, this is similar. Always get the full contact details of the web hosting company, many people simple go online and have an email address only as the contact. If their email goes down and you need to contact them you should have their full details at hand. Always shop around for the different web hosting plans and compare, you will find large differences, after you settle with a budget ask the necessary questions before you sign up.

The Basics:

Web hosting offers you the opportunity to put your web site online, when you think about it; it's the only way you can do it. No matter how large or small in content your web site happens to be it has to go onto a web server. A web server is simply a larger and much more powerful computer than your own. Your internet content simply sits on this server for people to access and view your information. The web servers are stored within data centers, all you are simply doing is renting some space on the server.

Why use a web hosting service:

Firstly it's very affordable. Web hosting companies will look after and update all software required to maintain your site, they will also add all security patches making sure your content is safe from hackers/viruses and unwanted spam. Once you register your domain name (web site name) you have to have it hosted for the public to view your information. If you run into any difficulties you will have a full technical support team to help you out. To host your own will cost too much on hardware, bandwidth and ongoing software updates.

I hear of shared web hosting - What is it?

When shopping around for a web host company you will find that many are offering shared web hosting. Shared web hosting is simply a server that has a number of different web sites sitting on it simultaneously. You will be allocated a certain amount of disk space on the server and this may allow you to have a number of web sites hosted on the one server. Shared web hosting is a very secure service even though you could be sharing the server with many different companies. No other company will have access to your files. Many people think that using a shared service will make the web site act very slowly, this is totally incorrect, the information will be displayed and downloaded equally as fast as if it where on the server on it's own. Web host companies offer shared hosting simply to use up all the space on the server, there is no benefit to you or them having empty hard disk space.

What makes a good web host site?

If you have developed a web site for business opportunity or to sell merchandise online you need reliability. Downtime costs you money so the less downtime you experience the better chance of making money. You need to compile a list of questions to ask the web host company when it comes to hosting your site. You need a guarantee response time if the unthinkable should happen and the site goes offline. You need 24 hour access to your files with 24 hour support if you intend selling products online, most of your sales could be made in the evening or night time so you have to have support for any issues that could arise. Statistics are also important; you need to know how many unique hits (people visiting your site) you are getting so you can see the trend of people just visiting to those who are buying. Some web host companies offer very substantial stats while others can be less informative, you should ask for a demonstration.

Word of mouth is a great way to hear as to who is a good host and a bad host. If you know somebody in a similar position to you, ask their opinion from their experience. There are plenty of good honest web host companies out there but like every market there are a few bad apples. Ask the questions and make sure you are confident with the replies before you join up.

Will it matter if I host my web site in my own country or in another?

Generally speaking no. If you are happy with your questions answered and the company have 24 hour support to allow for time differences you should have the same level service as if the web host company was based just down the road. Some people think that by hosting their website outside of their registered country they will lose their domain identity, this is false e.g. if I was based in Ireland and I had a computer website it would be something like www.computerparts.ie The .ie is the identity of Ireland but if I wanted this site hosted in the US I would still keep the .ie, there is no need to change to .com. That's the great thing about web hosting, the world is your oyster and you can shop online globally until your are truly happy with the service.

Selecting a web hosting company is like sending one of your children off to college. You may have complete confidence in your son or daughter's abilities but unless they are placed in the proper environment they will not have the opportunity to thrive. Likewise, no matter how sophisticated or impressive the website you have designed may be, if you do not place the site where it can perform optimally you will likely be disappointed in the results.

Selecting web hosting is not simply finding a place where your website can reside. It is finding the company that offers the resources that will allow your website to operate effectively and to grow as the business or public demands. This means that you must be able to store and transfer enough data so that your site functions smoothly but also remains affordable.

Free web hosting services normally require that you allow ads to be placed on your site. These generate revenue for the hosting company by enabling them to display ads to visitors to your website. Only you can determine if the ads are appropriate for visitors to your site. In addition you will have to decide if the amount of storage and the available bandwidth will be sufficient for the type of website that you want to display. A free service may be completely appropriate for a personal website that is periodically modified. But trying to operate a site with significant traffic or a commercial focus may be "penny wise and pound foolish."

All commercial web hosting companies are not created equal. Of course, cost is an issue but reliability and service will likely be major factors in the decision making process. You should expect your host to be up and functioning 100% of the time but you will likely only see guarantees of 99-99.5% uptime. Less than this is unacceptable.

If you will personally be managing much of the activity for your site, make sure that you are comfortable with the Control Panel. Some hosts present Control Panels that are cumbersome and complicated. You want to easily navigate through routine functions. You will also want to make sure that the hosting company has functionality that you may not be using now but will likely use in the future. These would include PHP, MySQL, SSI, .htaccess, SSL, etc. Examine the offers for email and autoresponders also.

Many web hosting services offer very low rates if you commit to a year or more of hosting. While this may turn out to be an excellent value in the long term, it may be advisable to pay each month until you are confident in the service and, quite importantly, the quality of the technical support that they provide. Getting accurate responses to questions quickly will make your life as a webmaster less stressful.

"2GB web space with 50GB traffic for $5.95 per month!"

A luring ad-definitely. In fact this ad makes many small business owners feel cheated by their present web hosts.

This is how the small business owners, who have taken small amount of space (say, 5, 10 or 25mb) calculate and feel that they are paying more :

"If 2000MB (2GB) costs $5.95 per month, then 5MB should cost (5.95 x 5 / 2000) = $0.15 only! But my web host charges me $1! A 700% profit!! Oh...I am losing so much money!!"

So, if a small business site shifts to the advertised web host, he should get better value for his money. Right?

Wrong.

Let me explain how:

As a small business owner, how many HTML pages do you have in your web site? 5, 10, 15, 25?

Experts say that you should not have a page of more than 100K including images. Normally the file size of a starndard HTML page is around 10-15K.

Remember that, many of the images linked to your pages are common. If you have a 400x300 pixel image, the file size of that image should not be more than 30K. Buttons are normally between 3-5K.

So, let's take an example of 25 page web site, which has (a) 25 HTML pages, (b) each page has one big image of 400x300 pixel and (c) have 25 buttons.

So, the total space usage is:

25 HTMLs x 15K = 375K
25 400x300 pixel images x 30K = 750K
25 buttons x 5K = 125K

Total : 1250K = 1.25MB

You need space for mail. How many email accounts do you need? 5, 10, 25? How much space you want to allocate for each mail box? Do you get large attachments? Your can set your email software to delete mails from the server (immediately or after few days) after you download them to your computer. So, if you check your mails every hour and keep your mail space clean for receiving further mails, you may safely allocate 1mb for each email accounts. If you are using only one email account, you can use the entire free space for your email.

So, with the above example, if you go for a 5MB space, it's enough for you in the given circumstances.

But, if you go for a 2GB space and use only 5MB of it, you are actually paying $5.99 for using 5MB space. A loss of $4.99 every month-$59.88 every year!

You got it now, right?

You may ask, 'What about Traffic? 50GB!! It's huge man!'

Yes, it's huge. But, do you need it?

With the above example, if one person visits all the pages, your site generates 1.25MB traffic. If you get say 100 such visitors every day, you generate only 3750MB or 3.5GB (approx) traffic for the entire month!

So, here again you pay more for the unused traffic.

Check from your control panel, how much space and traffic you are you consuming currently. Are you paying for unused space / traffic? If yes, then browse the web for reliable hosts and find out a plan which fits with your requiremnts. Compare the prices and features. Check the reliability of the host and go for the one you find the best.