Reducing Support costs with Bobcares – a Business plan comparison for Web Hosts
If you were to glance through any Web Hosting Business plan, you’ll notice a prominent operational expense for Technical Support. Staff cost is usually the Number One operational expense for a Web host, which is followed by Server purchases and Bandwidth.
Why? This is because any decent Web Host provides 24×7 technical support to customers, via email and phone. A good Web Host needs to have someone with server administration skills to conduct preventive maintenance practices periodically, such as upgrades, security updates, installs and migrations.
Besides all this, support usually also includes Billing and Sales. Salaries alone can cost the company a pretty penny. And yet again, what about other benefits, such as health insurance, 401K, overtime pay and holiday pay. Now, these are direct costs alone.
Many a time, business owners forget the indirect costs of running an In-house support operation. You need to provide office space, furniture and a good work environment, not counting the time and effort needed to manage the team.
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What happens when someone leaves abruptly? You need to find someone to replace that person. You need to motivate your team, make sure they are happy and efficient at the same time, so that “they” can provide your customers with happy and efficient service.
Besides all this, Web Hosts that plan to provide In-house support should also buy or develop software and systems on their own, including Help desk systems, phone systems and chat to provide a great experience to the customers when they contact support.
Now imagine what would happen, if you were able to outsource all of this to a company that specializes in doing exactly the same thing. A company that has managed tech support operations for Web Hosts for over 9 years and for hundreds of Web Hosts.
This is where Bobcares comes in. We believe this is the incredible value that we provide to our customers – Great savings and invaluable peace of mind. To illustrate my point, let me just try to quantify the savings part of it.
Let’s take a sample Web hosting business with 10 servers that has 400 accounts each. The minimum requirement to run this business would be a 24×7 support team. Let’s see what it takes to run a 24 hour team in both cases.
Salary, benefits for 24 hour coverage – 24 hours x 30 days x $15/hour – $10,800 (Benefits extra.)
For a commercial space – $1200/mo
Computers, furniture, work environment facilities – one time variable expense
|Bandwidth, electricity, utilities|
Monthly $13,000 + One time setup for infrastructure
24 hour help desk support for Unlimited tickets @ $200/server = 10 servers x $200 = $ 2000/mo
Savings over In-house support – Over 85%
Of course, the above business plan is just an example. Savings vary from company to company and this does not count the hidden costs involved in running a support team.
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Many companies use a combination of both In-house support and Bobcares to supplement their support team. This is also a great system that works for many companies, because the Level 2 and Level 3 support can be taken care of by Bobcares engineers and the Level 1 support, billing and sales can be managed by the local In-house staff. It also works vice versa.
I would encourage every Web Host out there to fill in the operational running expenses for their own business, and see how Bobcares can help reduce business costs. In this tough economy, its only fair to be competitive and stay in business.
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