Getting paid over and over again

12 years ago

Hey there,

A recurring monthly definitely should be one of the package you offer:

Good luck and lotsa success man!

cheers

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WikiWarrior

12 years ago

Depending on how much you're charging them for hosting I'd be tempted to ask for the money up-front. I know others will disagree and I see the benefit of having lots of little subscriptions running but all the clients I've dealt with have been happy to pay a year upfront. They don't want another direct debit going out of their account every month and the amount is so small anyway that they would rather pay it in one go.

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Cyberdog1

12 years ago

I would look at it in terms of the client - I wouldn't prefer to pay so regularly and an annual payment is perfectly fine.

Just send out your reminder emails in good time and you shouldn't have a problem.

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RogerH

12 years ago

Hey Stean,

I've gone back and forth on the hosting question.

I know it's simpler to bundle a "hosting and maintenance" fee together, but I would rather not be responsible for a bunch of accounts on my server.

With the relatively high commissions you can get as a HostGator affiliate, you may want to consider unbundling your hosting and maintenance. You can give them a good deal on hosting, plus still charge your $97/month (or whatever) for maintenance, weekly site backups, reporting, etc.

-Roger

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IM nice guy

12 years ago

I don't have specific experience, but for me logically it makes sense to bill more often in a smaller amount.

Not only will you get your money every month, which gives you cash flow (something every business - especially a new one needs) but also, if the billing amount is smaller, the client is less likely to think too much of it.

Also, It just doesn't make sense to do annual billing when you're a small starting biz. I can't see any advantage to it, other than offering discount incentives to customers, but for me that doesn't come close to outweighing the benefits of regular smaller billing..

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JohnGaltMarket

12 years ago

Regarding that question I would ask your friend, the one who taught you everything.
Minding my own opinion... I would offer all the possibilities.

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payperman1000

12 years ago

I've never tried starting a hosting company, but I have hosted and still do host many websites. I've tried alot of hosting companies and the thing that bothered me is if I don'tlike something or need special features that the hosting company may not have, I would the option to go with another hosting company without spending alot of money upfront. I think you should use the model of giving the customer a choice of how he/she wants to pay. Example: 1 yr=$65, 6 months= $45, 3 months=$35, 1 month= $15 something like that so that you pay significantly less for advanced payment than month to month. It gives your customers the comfortable convenience of options.

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sodevious

12 years ago

Give them the option. Make them pay more for monthly hosting to encourage yearly, or vice versa. Good luck!

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klikeras7

12 years ago

You're probably just paranoid.

They pay upfront either way, monthly or yearly, they recieve the invoice next month, if they don't pay it by the deadline they lose the service.
Or you set it up that their account gets suspended and they have to pay a fee for being late on payment, if they don't in 7 days their accounts get deleted.

Not sure about it tho, why don't you talk to your friend about it, if his system works, just follow what he does.

For example I like to pay for my hosting monthly, I never know when I'll stop using it, and it's my right to stop to do so, and stop paying because I've chose monthly rate.

Anyways I think you don't have to worry that much, or be paranoid about it, just follow the system that works the best and promote your company.

Thanks

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TGforever

12 years ago

For me if I was a business owner I wouldnt want to pay yearly. And I guess with the hostgator options for hosting services, I did choose the monthly payments. Cause then I have the option to backout if I wasnt happy with it.
But for my rent-a-site model I will be charging monthly. And I probably wont have contracts more then a month to month basis, cause if I have an option to raise my price or move into lead genertion I have the chance to do so. Also if a client and I just arnt seeing eye to eye, like client is demanding way to much then I have the chance to just get a new one the next month. Idk how helpful that was, more just an explanation on why I love month to month plans. Gives everyone a good backout plan.

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vndnbrgj

12 years ago

I do both monthly and yearly.
For example: $9.95/month or $99.50/year

I only present two options. I don't offer quarterly.
Let them decide. Serious people pay for the year, others pay monthly.

Customer Retention: Customers fall off the bandwagon. The important thing is to keep your funnel full to replace the lost ones.

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MaxwellB

12 years ago

Originally Posted by Stean

Hey guys,

I'm about to launch my hosting and web design company very soon, and I'm super amped!! It's been a slow process but I'm getting there. I have a friend who is is doing the same and he is teaching me everything he knows. It is great that he is showing me, as it would have taken me forever to figure the stuff out by myself.

Anyways, I just have a question for the experienced guys regarding hosting payments. My friend is charging his hosting on an annual basis, which is great because you get a bigger sum of money when you do get paid.

Now my question: in terms of retention, would it be better to have my clients pay me on a monthly or quarterly basis, rather than annually? Does anyone have any experience in experimenting with this type of thing? I am just scared that I am doing sites for a bunch of guys and then after a year half of them can't pay their hosting fee anymore. Or am I just paranoid about it?

Stean

Your over thinking it.

Bill them yearly, they'll only have to pay one time a year, you won't have tons of small payments in your accounting software and they'll never remember to cancel...not that you should let them cancel anyway.

Here's some advice, "We host every site we build...period...you weren't gonna host with godaddy to save 10 bucks a month were you Dave?" Oh no of course not...

Don't be a push over don't let them not host with you. Only cheap A$$'s will try to not host with you and if they do say "Okay that's fine but we host all the sites we make so you can host with us or have someone else make the site"

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PhilaPM

12 years ago

I prefer to collect for the year up front. Trying to chase people down for $15-20 each month becomes a pain in the butt. I prefer to get it all up front for the year.

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webcosmo

12 years ago

i would keep all options open. monthly is helpful to get more people sigup. some people arent just sure if their site would be around for a year.

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webcosmo

12 years ago

i would keep all options open. monthly is helpful to get more people sigup. some people arent just sure if their site would be around for a year.

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tradeking

12 years ago

My best guess would be quarterly as users would not see the charge every month, but I'm no expert.

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AussieT

12 years ago

Why can't you offer both like other companies do? $x monthly and $xx yearly with a generous discount included for the yearly.

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Levintry

12 years ago

Hi Stean, I'm honestly new around here so please take what I say with a grain of salt. I would recommend having all of the payment options you listed available to your clients. Perhaps an overall discount plan for the longer term agreements would work well. I work in retention as my current out of home job and people just want recurring value and many people are smart enough to shop around so offer a solid product at a competitive price. Oh and don't forget each and every one of your clients is a potential referral gold mine, you may want to consider offering your first clients some incentive to refer you such as a discount off of current or future services. I know you didn't ask about referrals, but I wanted to throw them out there in the hopes of helping you with your success. Best of luck to you and your new business!

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raydp

12 years ago

I think you would be safer offering monthly payments. I think you'd be pushed for large discounts for annual payments. Unless you need a quick boost to your bank balance!

Ray

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raydp

12 years ago

I'd go for monthly, it seems a smaller outlay when clients are managing budgets.

Ray

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jimbo13

12 years ago

testing123

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drees5761

12 years ago

I do a 3 month rolling contract. The clients seem to love that as its not tied in too long and gives them the freedom to pull out if they wish, although none of mine have done so far!

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misc92

12 years ago

Im about to open the same company you are and I believe business owners would prefer to pay $120 at the start of each year rather than 12 installmentes of $10...

Time efficient for both parties and the whole sum isnt even large for them to cringe over, unless you are seriously upselling your hosting.

how much are you charging?

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NXmarketeer

12 years ago

Annualy is my preffered way. Quarterly is more troublesome.

Another way is to have client sign under you in Hostgator for his own hosting (my preffered method).

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mbitsol

12 years ago

Monthly or yearly both have there own benefits I think your should keep both option open for your customers.

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mayankgangwal

12 years ago

Hi,
Itz look cool, i guess. If i m your client and i have the fantastic changes to pay you for quartely that sounds great for me. I can manage as many sites with it and can have a test for all which one is doing best for me and other stuff.

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Getting paid over and over again

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