When web hosting turns into a disaster

Guide to E-Commerce Technology

A man’s sweet-tooth cries out, so he walks down to his corner store only to find a locked door with a sign: “Back In 15 Minutes.” He could wait, but he needs a candy bar—and fast. So he walks a bit further to another corner shop, which is open and filled with sweets. Mission accomplished.

This bricks-and-mortar scenario happens often in electronic commerce, only it’s the web hosting service that’s on a break, not the clerk.

“For an e-retailer, it’s knee-knocking time when you can’t get a web hosting problem fixed right away,” says Denise Houseberg, drop ship diva at MarketExpo Inc., a home and garden pure-play that sells at MarketExpo.com. “Hosting problems mean lost shoppers and lost sales.”

Disastrous effects

Web hosting is one of the most crucial aspects of Internet retailing. Hosting options are varied. And web hosting companies run the gamut from a concierge at The Ritz to a snake oil salesman. Choosing the wrong hosting company can have disastrous effects on a web retailer’s business, effects that are difficult to remedy quickly.

Many retailers, whether new pure-plays or multi-channel merchants with vast experience, find themselves in unfamiliar territory when launching a business on the web, says Derek Vaughan, chief marketing officer at TechPad Agency, an online advertising and marketing agency specializing in resources for companies seeking web hosting services. “They require considerable assistance and web hosting products that are easy to use.”

Three e-retailers seeking assistance but who wound up suffering more than their share of web hosting problems—MarketExpo.com, DogCatRadio.com and PortableSink.com—all reached the same conclusion: The key to a successful web retailer/web hosting company relationship is communication. And in their experience, a dearth of communication indicated much deeper problems.

The lack of communication from the web hosting company led to downtime, lost opportunity and frustration, says Adrian Martinez, president of DogCatRadio.com, a content and e-commerce site. “People couldn’t access our web site. We would make several calls to our hosting provider, practically begging them to look into the matter ASAP,” Martinez recalls. “The company took too long to resolve problems, and their lack of communication and customer service was the deal-breaker.”

Houseberg echoes Martinez. “Our previous web hosting provider typically responded via e-mail. They never called, not even when the site was down or performing slowly,” Houseberg says. “The company assured us our site was ‘fully managed.’ But we were the ones that had to watch the site and let them know when things weren’t right.”

The echo continues. “We’ve changed our web hosting provider several times during the last few years. Communication was always a problem,” says

Joseph Mosis, president of Monsam Enterprises Inc., which operates PortableSink.com, a retailer of sinks that provide hot and cold running water without plumbing. The retailer tried big web hosting companies that advertise all over the Internet and small local firms that promise to do what no one else can, Mosis says, but what the hosting companies said and what they did often were two different things.

An active market

Web hosting companies should take note of these retailers’ conclusions if they wish to compete in an extremely crowded field. 78% of 180 respondents to a July survey of multi-channel retailers, catalogers, pure-plays and consumer brand manufacturers who are Internet Retailer readers use web hosting services. Among all respondents, 22% reported they plan to replace their current hosting company or hire their first in less than two years; 13.5% were uncertain regarding the fate of their hosts.

Extrapolated, this translates into a sizeable number of retailers seeking web hosting services in the near future—and a small fortune to be made by web hosting companies, good or bad. Of course, it’s the bad that merchants of all stripes must be wary of. And there are plenty of lessons to be learned from retailers who already have been there.

Case in point: PortableSink.com. A competent web host along with shopping cart and content updates are the most important factors for the company because its e-commerce site is its primary source of revenue, Mosis explains. Competent, however, is not the word the retailer would choose to describe its previous web hosting company.

“The company attracted us by advertising a very low and competitive rate on their web site,” Mosis says. “But then, when we started working with them, they billed us for every minor thing, saying the rate shown on their site is just the basic rate and doesn’t cover things we were requesting.”

The web hosting deal Mosis signed with his previous host, for example, included in overall services the enhancement of product images with background colors and images, he says he was told. Later, when PortableSink.com sent product images to the host for enhancement, the host said it would take about 90 minutes to tend to each picture, and that each enhanced picture would cost about $100. When he asked why he was being charged for something that was supposed to be part of the overall service, Mosis was told by the host that there must have been a misunderstanding. “The word ‘miscommunication’ was very popular with them,” he says.

So once again, the key issue of communication reared its head. “We needed an easy way to communicate with the hosting company,” he says. “We sent e-mails that never got replies, and we were on the phone for hours.”

On top of costs and communication, timing and accuracy were problematic. “When we request an update or change to the site, we need it done now—and I mean now. But I sometimes waited 48 to 72 hours for site updates, and that affects sales,” Mosis says. “What’s more, sometimes after waiting all that time the update wasn’t done right. Links led shoppers to unknowingly order the wrong items, for instance. This meant additional expense in shipping to replace the product, as well as a drop in customer satisfaction.”

The straws that broke the camel’s back were calls from customers and a decline in sales. “It takes time and effort, as well as money, to find a solid hosting company, but it is essential to my business,” he says. “It took a while to find a good, reliable company that met all of my needs at a good price.”

With experience, Mosis began his hunt for a new web host with three tasks at the fore: more research, hypothetical scenarios and spelling things out.

“This time around we conducted more research, reading all the fine print on the vendors’ web sites, asking for multiple references, investigating the vendors on the Internet,” he explains. “We thought it was not a good sign if a company promised to help us gain a top listing on search engines but we found that their own site listed low when we did a search for hosts.”

In meetings with potential hosts, PortableSink.com asked many questions and created numerous e-commerce web hosting scenarios, such as what the host would do if the retailer suddenly had to add many more products, to find out what vendors would do, as well as what they wouldn’t do. And it asked suitors to spell out in great detail, in writing, services and costs (see box, page 32).

Four questions

“Ultimately we measured the efficiency of each vendor by asking ourselves four questions,” Mosis says. “Do we like the way their web site looks, and is it user friendly? Based on our research, how long do we think it really would take them to respond to requests? How does their company rate in various search engine listings? And what is our impression of the proficiency of their representatives?”

In the end the merchant went with IPower Inc., which has been working with PortableSink.com since November. The company helped the retailer fine-tune then test the new site. The major part of the fine-tuning was a new shopping cart that is easier for customers to manage, Mosis says. The retailer then dropped its former web host and launched anew in March.

“In our experience so far, I like that our new host’s plan has been tailored to fit the needs of a small business and help the business operate smoothly,” Mosis says. “For example, we perform many site updates, adding and updating products. It was hard to find a company that would do this for a reasonable price. Where our previous, local host service charged $800 a month for updates, our new host created a plan to do 10 updates a month for $40. And when we make update requests, they’re typically done the same day.”

As for the overarching problem retailers face of poor communication from web hosting companies, though there isn’t much telephone talk, Mosis is pleased with the method his new host has in place to cure communication woes. “Today it all is being handled very efficiently through a customer relationship management system on the host’s web site,” he says. After PortableSink.com logs a request, the host fulfills it usually the same day and quickly sends a notification that work has been completed, he adds.

MarketExpo.com has a similar tale. The retailer flailed about for seven years, working with different web hosting companies as well as trying to self host, which proved too time-consuming and complicated.

“We’ve been all over the map trying to figure out this game,” says Houseberg. “Most of our problems centered on shopping cart functionality causing the site to go down, the server or front-end needing to be reset, and the server being overloaded with internal log files or traffic. Even when the site didn’t go down entirely, the fact that it was not working at a shopper’s expected functionality was bad news.”

Early this year MarketExpo.com decided to purchase web hosting services as well as an e-commerce platform from Venda Inc. Before doing so, it analyzed what went wrong in the past with web hosting and laid out a plan of attack for its hunt for a new host. However, the retailer this time went into the search from a different perspective, one it believes was more realistic and helped it make a solid decision before signing on the dotted line.

“Choosing the right partner to grow or host your web site is all about relationships. And in this we know that we can’t expect everything to go perfectly,” Houseberg says. “Everyone still is learning more and more about the perfect e-commerce site and perfect web hosting. And that keeps the game challenging and interesting for all of us.”

When it comes to ensuring a good relationship, Houseberg explains that a retailer unfortunately never can be totally certain. “It’s like starting to date someone: You don’t know what they’re really like until about six months in. For a gauge to potential success, the retailer has to be open and honest upfront about what they want in a relationship, and just tell the vendor after communicating these desires, ‘If you are not the right person to come to the party, please say so now.’ Ultimately, you always have to be prepared to say this isn’t working out and it’s time to migrate to another host.”

During the transition, the merchant was relieved that its choice to go with a web hosting vendor that also operated the e-commerce platform and had a wide range of expertise beyond just hosting proved a good one, Houseberg says. “They had all the e-commerce strategies we were looking for in one venue, and their team was very supportive and responsive. We gave them our new web site design and they helped us work through all the changes and data uploads.”

Big and small

MarketExpo.com judged Venda’s support and responsiveness prior to signing by looking at the company’s work with its current customers. “Our new host has bigger clients that are much more demanding than we are, and I concluded we would be a shoe-in to get the kind of treatment we sought,” Houseberg says. “And now our host is doing more than hosting—it’s dreaming up solutions on things like boosting our traffic and conversion.”

MarketExpo.com dropped its previous host and went live with its new set-up in May. It paid around $120,000 for the e-commerce platform and systems integration and hosting services for the next 12 months. “In general changing web hosts and design always will be a challenge, but a worthwhile one,” Houseberg says. “Now our site is dependably online and continues to improve.”

Things did not improve for DogCatRadio.com when it went online with its last web hosting company. Poor service, high costs and a lack of organization did not make for the perfect relationship.

“We launched and then reported several problems,” recalls Martinez. “Six months later the web hosting company still hadn’t resolved the problems, which included serious matters like billing mistakes.”

The retailer then set out on a quest for a new host, seeking a company with a solid reputation for service and a good record of being “customer friendly,” Martinez says. It consulted various resources—online information sites, customer references and others—during its quest.

“We looked for a hosting service with very user-friendly features, as well as one that goes the extra mile. Not many do, but some will. Also, we needed a company that could offer us a clearer picture of operations through their web hosting reports,” he says.

DogCatRadio.com now uses hosting services from IPower. “Once live, understanding everything about hosting status is critical,” Martinez says. “Businesspeople don’t have time to focus on trying to understand web site statistics and such—they have their business to run. So finding a business-friendly hosting company that’s proactive with client service is essential.” l

bill@verticalwebmedia.com

A shopping list

The following are the primary services PortableSink.com was looking for when hunting for a new web hosting vendor, according to Joseph Mosis, president of Monsam Enterprises Inc., which operates the e-retail site.

— Manpower: “We know what we want, but we do not have the manpower nor the time to constantly go online and update the site.”

— Maintenance: “What will they do? How and how much will they charge? And for how many updates?”

— Communication: “We need an easy line of communication with our maintenance manager at the hosting company.”

— Other expertise: “We weren’t looking just for hosting. We needed a host that could help us with things like marketing on the Internet.”

P Shopping cart functionality: “Can the host company create one while offering us various types of functionality as part of the overall package?”

Questions, questions, questions: Hosts and analysts chime in

Many web hosting companies and industry experts agree with executives at MarketExpo.com, DogCatRadio.com, PortableSink.com and other retailers that communication is fundamental to a successful web retailer/web hosting company relationship. This is especially so, vendors say, before a contract is even signed.

Subscribing to a web hosting service first requires a retailer to identify and fully understand their current and future business requirements, says Jeffrey A. Max, CEO of Venda Inc., which provides an outsourced e-commerce platform. “Once defined, the retailer needs to identify available hosting providers and align themselves with one that meets these criteria. Understanding the provider’s support and service levels is crucial in the assessment phase.”

When it comes to understanding, however, retailers seeking web hosting services sometimes can be a bit off the mark, some hosts say.

“Retailers new to the Internet usually have a vague idea about setting up an e-commerce site, but they are at a disadvantage because they do not know what they do not know,” says Jeff Pettit, vice president of sales & marketing and corporate development at Host Depot Inc. The company offers e-commerce solutions geared to small and medium-sized businesses. “To many of them it’s like The Wizard of Oz, the man behind the curtain pulling strings and pushing buttons. That is just not the case. And because they don’t understand how e-commerce works, they don’t know what questions to ask.”

Like merchants who have felt the sting of poor web hosting services, web hosting vendors also have questions they recommend retailers ask before selecting a host. Pettit offers a cornucopia of queries retailers should pose to web hosting companies—and themselves: “What level of understanding do I as a retailer need to have to set up and operate this service? How much work is actually involved in getting the site set up and operating it on an ongoing basis? If I as a retailer cannot perform the site set-up and management, can the hosting provider build and manage the site for me?”

W. Gregory Dowling, JupiterResearch senior analyst who specializes in technology, states that retailers must ask detailed technical questions with which they can seek advice from colleagues or others if they themselves have limited technology understanding. “How is the hosting company equipped to handle seasonal and unexpected transaction and traffic spikes?” Dowling says. “Does the host have limitations regarding e-commerce platforms, and which platforms do they have the most experience with? How are outages and site functionality issues monitored, communicated, escalated and resolved?”

In addition to the finer points, other experts tell retailers not to forget the big picture questions.

“Do you have demonstrated experience with companies that look like me—my vertical, my size, my business model, my needs?” counsels Matt Poepsel, vice president of performance at Gomez Inc., an Internet performance management consulting firm. “How will we work together to deliver continuous customer improvement and business success over time? How will we know if it’s working? And how will we prove it?”

And a very important component to the retailer/host relationship falls squarely in the retailer’s lap. Once an e-commerce site is up and running, retailers must bear in mind that visitors will not just show up at their doorstep, Pettit adds. “Web hosting customers, the retailers, have to advertise, promote and perform other activities to generate traffic to their site. After all, that’s what selling online is all about, getting customers to the site. So a big question is: How can I increase traffic, and can a hosting provider help?”