How you do business?

[DZoolander]

So - I run a couple of online businesses and have a sort of ad-hoc server farm that I've set up over the years for content delivery. I lease the servers from a company out in California - and I've always had really reliable service from them (something that I value a lot).

I pay them in 6 month installments - but due to some things I want to do right now - I've decided I want to pay them in 3 month increments for the short term just to free up a little bit of immediate cash to move into a couple of other areas.

Of course - they obliged - but they've increased their fees by about 15%.

Now - this irks me for a variety of reasons. First - I've been with them reliably for well over 6 years now. Next - I rent a number of servers from them. Lastly - I've brought them probably another 10-15 long term clients renting servers from them as well. So all in all - that's probably over 20 servers they currently have as a result of me.

Next - the ones that I rent from them are about 4 years old. I can get FAR better servers (even from them if I were to open up new plans) for the same amount of money and marginally better ones from them for about 40% less than what they're charging me now. They're outdated, in other words.

So - I'm irked. Your sales guys are going to ignore the regular business that I provide - to charge me more for the same outdated servers - when your very company would give me something better if I simply opened new plan(s)?

In response - I've done my research and rented out 5 new servers from another company - and I'm in the process of migrating everything over - and I'm gonna cut ties as soon as I'm done.

Now here's my question...would you have gone to them and asked them to reassess? Or would you be so irked (like I am) on principle that you wouldn't even give them a chance to keep the business?

 

[Inkachu]

I didn't know this about you, Ezoo! My hubby runs his own web hosting company If you ever wanna switch over...

 

[mkgal1]

So - I'm irked. Your sales guys are going to ignore the regular business that I provide - to charge me more for the same outdated servers - when your very company would give me something better if I simply opened new plan(s)?

That has always been a pet peeve of mine---how reliable and established business is neglected in favor of drawing new business. That leaves a [negative] mark in my mind about a company's integrity.

In response - I've done my research and rented out 5 new servers from another company - and I'm in the process of migrating everything over - and I'm gonna cut ties as soon as I'm done.

Now here's my question...would you have gone to them and asked them to reassess? Or would you be so irked (like I am) on principle that you wouldn't even give them a chance to keep the business?

Personally......I'd offer the original company the chance to reassess things....BUT they're going to have to overcome the whole issue of favoring new business over established. IOW.....it's going to take a LOT (more than what the new company has to over) in order to stay. I do like to try to give businesses that I've worked with the opportunity to keep the business (but I'm not going to be more committed to that than they are).

Haven't people learned that it's more costly to attract new business than it is to maintain business relationships? It really seems to me that the focus should be on taking care of who you currently have as clients (and---like it's worked out with you---there will be referrals for new business).

 

[mkgal1]

There was a commercial out a while ago about that---how "new friends" got all the perks (it was a guy in a suit speaking to young children in a classroom).

 

[DZoolander]

Personally......I'd offer the original company the chance to reassess things....BUT they're going to have to overcome the whole issue of favoring new business over established. IOW.....it's going to take a LOT (more than what the new company has to over) in order to stay. I do like to try to give businesses that I've worked with the opportunity to keep the business (but I'm not going to be more committed to that than they are).

The negotiations would be irksome to me though.

"Right now you're offering servers with twice the power for 30-40% less than what I'm paying for these servers. So not only should you NOT have increased my rate per server - you ought cut my fees by at least 50% as well as accept the shorter contract lengths."

? lol

 

[mkgal1]

The negotiations would be irksome to me though.

"Right now you're offering servers with twice the power for 30-40% less than what I'm paying for these servers. So not only should you NOT have increased my rate per server - you ought cut my fees by at least 50% as well as accept the shorter contract lengths."

? lol

Wouldn't that be worth it? That sounds fair to me.

I think it's up to the original company to do the negotiating---they're the ones that are losing out (you have options---they don't). Nothing more should have to be said other than that (above).....and (hopefully) they will try to do what they can to maintain your business. If not.....they aren't worth working with.....IMO. Also.....if they aren't quick to accommodate you........(since they've already tainted the whole business relationship).....if it were me, I'd be making plans with the new company. They *should* be quick to respond to a disgruntled....long-term and reliable client.

 

[LinkH]

When I read the first half of your post, I thought of what they taught us in my pricing class and also in my marketing strategy class about firing your customers. Some customers don't bring in the kind of ROIs. If you have certain customers producing less for you and your business is doing well, you may want to shift more effort to customers who will make you more money. It's not good for relationships, I suppose and supporting other business in the community.

One of my professors was on the board for a chemical company. Chemicals are commodities. It' the same from one company to another unless someone does something wrong. The company decided to 'fire' some of it's customers that they weren't making profits off of or making sufficient profits. Then one of the companies wanted to renegotiate. They could get chemicals anywhere, but not with the service and reliability for delivery as this company and they were willing to pay more.

Maybe this company has those deals to open new accounts hoping to get the folks who are going to be growing bigger at a fast rate. So maybe they are purposefully snubbing customers who fit your profile who ask for the payment options you are looking for.

Most likely, though, there isn't anything strategic about it. It could be their finance department sets the prices to discourage certain pricing arrangements. They may prefer their payments to come in in a different way. Sometimes issues arise because different department's approaches to things don't fit with an overall strategy. Organizations can be complicated.

If it were me, I don't think I'd get miffed enough to move my business if it were a real hassle to do so. I'd probably just take the avenue that was the least hassle or the least cost, weighing those two things. If their service wasn't reliable and that was hurting my business, that might motivate me to change providers really fast. I don't know how often providers go offline, but you should ask around if you don't know and get a sense for how reliable other providers are. Also, if moving could potentially cause any big problems for your business, you should consider that as well. If yours is better than average, it might be worth trying to get them to reassess.

 

[Autumnleaf]

You move now and in a year or two you go back as a new customer and get lower pricing. I hop around for cheaper internet pricing this way all the time, well every year or so when one deal or another runs out. When I called to argue about it the person I talked to told me how it works and how its not worth it for me to argue with them because they have a flow chart of what to say and what to do. So I play the game.

 

[sdmsanjose]

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Now here's my question...would you have gone to them and asked them to reassess? Or would you be so irked (like I am) on principle that you wouldn't even give them a chance to keep the business

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If it was me, I would asked them to reassess and tell them that they have only one shot at keeping you so they had better offer you a great deal right now.

Most businesses are in business for ONLY the money and will get all they can no matter how fair or unfair it is. Some businesses are not efficient when it comes to reviewing their customers plan. Furthermore, some businesses are rewarded for doing the two I just mentioned because some customers allow it or do not pay attention.


I treat most businesses as heartless, greedy, inconsiderate, and unfair. IOW, they are not human so I look for every opportunity to make them give me the best price and anything else that benefits me. I play the same game that they do. Of course there are some businesses that have so aggravated me that I will forget the monetary advantages and just cut them out of my life. EZ, if you got some emotional satisfaction by cutting them out before any discussions then I can fully understand that also.