Should you Host or Not Host Client Websites: the Classic "Build vs Buy" Decision
Build a new Revenue Steam for Your Company by Hosting your Clients’ Sites
As a small or mid-sized marketing firm, if you support at least 60+ clients you might want to consider opening up a new revenue steam and hosting them yourself vs referring them to a 3rd party Hosting company like Bluehost or WP Engine. There is a bit more risk involved, but partnered with the right person or company you can soon turn a Business Expense (hosting) into a significant source of new Revenue for your company!
Web/Marketing Agencies. The audience of this article is for Managers/Owners of small to mid-sized Web/Marketing Agencies. This article assumes you currently design and/or build websites as part of your core service offering.
A PARADIGM SHIFT
Ok, let me cut to the chase – yes, it’s very true Bluehost and Godaddy offer very affordable “shared server” web environments. And using them (or even a high-priced offering like WPEngine) may be reasonable options for you and your clients.
However, the bigger “play” here for an agency like yours is when you reach what I call “critical capacity” and have an option to bring in some significant revenue from hosting those websites yourself. At about the 50-80 client mark, you’ll have a critical business decision to make. Do you continue to put each of them on their own shared hosting environment (like Bluehost or WPEngine at $7-15/mo or $225/mo, respectively) OR do you decide to build out a dedicated server and perhaps get into the hosting game yourself?!
This is the classic “build vs buy” decision. Many smart web companies and marketing agencies choose to “buy” (i.e. invest in a web server infrastructure) because then you can start bringing in an entirely new revenue stream for your company.
BUT I DON’T KNOW ANYTHING ABOUT HOSTING!
Sure, it’s a bit more risky to break away out of the mold. And you may also be thinking: “geez, I don’t know a thing about website hosting!” But let me remind you: the rewards are that much sweeter for those willing to take a bit of risk and step out of their comfort zone. Because once you’ve set up a secure fixed-cost infrastructure, you can then start bringing in hundreds (soon thousands!) of dollars every month in additional revenue you never saw before.
BUT I WILL NEED A LOT OF HELP!?
We’re not saying jump into the deep end of the pool with no safety jacket. This is one area where an experienced web security and support firm like Loud Canvas Media could play a role. We’ve been working with local web agencies for over 15 years, helping them understand the rewards, opportunities, potential issues, and risks involved in secure web hosting. We also work with you to define a clear, decisive execution path to hosting sites yourself and start bringing in that additional revenue.
It’s a big step and shouldn’t be taken lightly. But I would encourage you to contact us if you can find 15 minutes of free time and want to discuss more. If you have plans to continue in the web development and marketing industry for the next 5+ years, the return on investment can be quite high. Much more than you might think, in fact…
IS IT FINANCIALLY LUCRATIVE?
A Quick Case Study:
For example, just last year in 2016 we helped 6 different companies transition from SPENDING money to MAKING money in the hosting arena. Case study: consider a mid-sized marketing firm in the Roanoke VA area (I won’t disclose their name for obvious reasons). They were spending an average of $17.50/mo each month on hosting for each of the 94 clients they supported. That was a $1645/mo or around a $20k/yr expense.
We worked with them to build out a dedicated server environment and reduced their cost to $325/mo ($3900/yr). They then BILLED their clients an average of $62/mo for hosting (on top of other support services they were providing). This net them an average NEW revenue stream of ~$6000/mo or $70k a year! This was money they weren’t seeing before and allowed them to jump start their marketing efforts and obtain new business.
This is just food for thought. The company described above might be a tad larger than yours and/or catered to larger clients. But the core principal is the same. We can typically help even small marketing firms realize at least $25K+/yr in new revenue – and that number will only grow as you bring on new customers!
BUT PEACE OF MIND! AND SECURITY! WHAT OF THEM??
This is where choosing the right partner is critical. If you do choose to consider Loud Canvas Media as your I/T partner, I promise that you won’t sacrifice one iota in terms of security, peace of mind, or quality of support! In fact, you’ll be getting a better product and get paid for the privilege!
I will stake my personal and company’s reputation on the fact you/we will soon provide your clients a huge amount of new value in terms of proactive support and maintenance of their sites when you partner with Loud Canvas Media and choose to host them. We work with you and go above and beyond the service level offering, web security, and technical proficiency (i.e. monitoring/backup/etc) compared to any of our competitors. You’ll be able to continue to sleep well at night knowing you have a dedicated, around-the-clock partner watching out for your clients’ web needs.
So, if you run a web agency and are spending a large amount of money each month on web hosting fees, I encourage you to turn that cost/expense into a revenue stream for your company! Partner with us and learn how to give BETTER service and get paid for it at the same time (vs paying someone else).
I welcome skeptics! Call or email me any time; I’d love to “talk tech” with you and walk you through the numbers to see if hosting your clients’ sites is the right opportunity for your firm.
Additional Reasons To Host Your Clients Websites:
- You’ll have more comfort with your own server. You may even learn how to create cPanel accounts, install WordPress with one click, setup FTP accounts, and/or create databases quickly. You’ll have access to logs. You can configure your backup solution exactly as desired. The list of technical benefits is actually quite endless.
- You’ll have far more control! Need to tighten security? Upgrade versions of PHP? Control access or limit system resources? If/when the client owns the hosting, you will have to go through their IT guy or jump through hoops and all sorts of red tape to do what you need to do.
- It’s a value-added service. Knowing how to handle web and server administration is a valuable skill, even at the basic level. Most clients don’t even want to even think about it; they just want “their website to work.” Managing their hosting gives them peace of mind and makes you more valuable to them!
- You can charge for it. And that’s the secret sauce, isn’t it? Clients know the value of hosting and they want to know someone is doing what needs to be done, controlling and managing all the tricky stuff behind the scenes.
- Turn an expense into a revenue stream. Along the same vein as above, if you currently elect to pay a 3rd party for a shared hosting setup or VPS, you now pay a monthly cost for each new site. But when you choose to host clients’ sites yourself, you can turn that expense into a revenue stream. It’s a win-win.