Examining Vendor Relations for Web Developers
Anyone reading on changes in the hosting industry understands that web clients are seeking more comprehensive and less expensive services. Internet service providers that strike deals with providers of third party applications (i.e. cPanel) gain two things; 1) added value for their product and 2) additional revenue via affiliate or profit sharing with the application provider. Obviously, the extent of both the value and additional revenue depends on the deal terms and vendors within the given scenario. In this article, we’ll examine how web development companies can expand by taking advantage of their vertical markets.
Finding the right partners.
When we talk about finding the right business partners, we’re looking specifically at the vendors that your company works with. For example, web hosting companies, domain name registrars, software providers and so forth. In order to grasp the concept of creating profitable vendor relationships, we need to think of your vendors as business partners.
Forming Aliances with Hosting Companies
Inevitably, your clients will lead you to your first potential partners. (Almost) every web development client has or will have a dedicated server or at least a shared hosting account. One of the challenges of working with clients that have selected their own host is that ultimately, you or your firm will have to deal with a multitude of different hosting companies and their various platforms and support teams. All of that takes time and money. What makes matters worse in such a situation is that your client base is spread across many hosting companies and as a result, any leverage you might have in striking a deal with any one of them is diluted.
Instead, wouldn’t it be better if most of your clients were with one hosting company? In this way, your team spends less time learning the ins and outs of each hosting provider and is able to resolve hosting related issues more efficiently. Sound good? What if most of your clients were with one company, and there was a way to profit from the situation. There are many ways to approach this scenario; one simply needs to get creative and do a little research. The first step is understanding which hosting companies you would consider as potential partners; a list of your top five ISPs should be sufficient. Feedback from your staff and customers will help to formulate this list. Look for the companies with little downtime, consistent and fast problem resolution and courteous and knowledgeable staff.
With your list in hand, it’s time to go hunting for partnership deals. Unless you have a substantial client base, larger hosting companies are not likely to take notice of you. However, most of these larger hosts (i.e. 1and1, RackSpace, etc) do however have affiliate programs, which are very easy to signup for. Signing up as an affiliate will allow you to generate recurring revenue, in the form of monthly commissions.
Cross Promote Your Vendors
Let’s look at another scenario, which might offer a broader distribution of your own services as well. As mentioned previously, unless you are pushing a serious volume of web hosting clients, larger web hosting companies are not likely to take notice. However, there are hidden gems available if we look at the reseller hosting market. Reseller hosts (i.e. AndHosting, AlphaOmegaHosting, etc.) are hosts which outsource to larger data centers, while providing support and value added services to their clients. These companies are often ideal providers for small web development clients; and due to their size, they are more likely to need the type of promotion and steady stream of customers that you can provide.
With smaller companies, you’ll be more likely to have the opportunity to structure a deal with them. For example; structure an exclusive cross promotion deal with a credit card processor that offers online processing solutions. Offer to direct all of your clients that are in need of credit card processing to this processor and in exchange, they direct all of their clients that are in need of web development services to you. Alternatively, you could make things a little more interesting by adding a commission to the deal; you’ll pay them a 5% commission on all sales generated from clients referred to you and they payout a similar commission for all of your clients that use their services.
As a web developer, you are in a unique position. Your clients see you, more than any other vendor, as their counsel and advocate. If you recommend a particular host, it is most likely that they will listen. But, what other types of vendors could you recommend to your clients? Production and maintenance of a successful website requires the coordination of many different services. If the site aims to process transactions online, credit card processing and an SSL certificate are needed. Often, third-party software, such as shopping carts, ad management programs, content management systems and so forth are needed or used to reduce production costs and development time. If the website provides access to value added content on a membership basis, anti-leeching software is needed. If uptime is critical, as it is for all commerce driven websites, then an uptime monitoring service is needed. In fact, there is a whole world of potential services and alliances out there, waiting for you to take advantage of. So, go forth and expand your horizons!