>How horribly condescending and wrong. Any company that lets their customers go from huge fan to hater in a week has a major bug. The important question is why did their product turn a fan into a hater, and how can they prevent it?
Spoken like someone who has never had a real customer. There will always be people who expect instant response to support tickets. There will always be people who expect you to fix their webapp, or their apache config when you are selling them a 'no support' plan. People can be unreasonable. If you have a reasonable number of customers, some of them /will/ be unhappy, no matter how good your service actually is.
Now, for me, I avoid some of these problems by making people pre-pay. If you don't, I just don't turn up your server. If it's time for renewal, and you don't want to pre-pay for the next period, I shut you off. There's no way for you to get an unexpected bill, and if it turns out my service doesn't match your expectations, I offer you a refund if you are willing to leave. (You'd be surprised the number of people who don't take the refund and want to stay even after complaining very loudly and publicly.)
For my target market (companies with small revenues and hobbyists) this is absolutely the best way to do it.
On the other hand, there are cases where some businesses would prefer to just pay through the nose to survive the slashdotting or what have you, and that's where this pay as you go model comes in. The problem is that when you have expectations of a 'pre paid' customer but end up buying a 'pay as you go' service.
>Spoken like someone who has never had a real customer.
I've had real customers and you do what you can to keep the loyal ones and make them happy, even if that means cutting your profits temporarily. It's not just being nice, it's smart business. If he finds another hosting company and starts recommending them, that's way more money lost than the $200 they could have knocked off the $1300 bill.
Eh, for me, I am /very careful/ to treat the customers who are easy to deal with (e.g. those who try to solve problems themselves, and those who don't complain) better or at least as well as customers who complain.
My policy is that if I give one person a refund/credit (without them leaving... anyone can get the last month back for any reason if they want to leave, I mean at least once.) I give all customers who experienced the same problem the same refund or credit. A few months back when I was hit with a DoS and was down 8-10 hours? I gave everyone a free month, not just the complainers. Fourteen grand that DoS cost me.
The thing is, your complainers are expensive customers. On a low margin service, it does not take very many "fix my apache config" complaints before a customer becomes unprofitable. I mean, you want some complainers; they act as the canary in the coal mine. But keep in mind that the real money is in the silent masses who silently leave when they feel wronged.
I mean, focusing on higher maintenance customers is also a valid business model... but you need to charge more, because high maintenance customers are more expensive to deal with. I want to be clear that I am only talking about (and I only know about) lower-margin services where the actual cost of providing the service is the determining factor in price. There are markets where those rules don't apply, and in those markets, nothing I'm saying makes any sense at all (and your advice is probably pretty good... not that I'd know.)
Spoken like someone who has never had a real customer. There will always be people who expect instant response to support tickets. There will always be people who expect you to fix their webapp, or their apache config when you are selling them a 'no support' plan. People can be unreasonable. If you have a reasonable number of customers, some of them /will/ be unhappy, no matter how good your service actually is.
Now, for me, I avoid some of these problems by making people pre-pay. If you don't, I just don't turn up your server. If it's time for renewal, and you don't want to pre-pay for the next period, I shut you off. There's no way for you to get an unexpected bill, and if it turns out my service doesn't match your expectations, I offer you a refund if you are willing to leave. (You'd be surprised the number of people who don't take the refund and want to stay even after complaining very loudly and publicly.)
For my target market (companies with small revenues and hobbyists) this is absolutely the best way to do it.
On the other hand, there are cases where some businesses would prefer to just pay through the nose to survive the slashdotting or what have you, and that's where this pay as you go model comes in. The problem is that when you have expectations of a 'pre paid' customer but end up buying a 'pay as you go' service.