Chombo's Blog

The transition from SONET’s Chombo to my Chombo has been difficult in a few different ways. It’s been difficult for me because running a hosting company is not something I’ve done before (I think this is a good thing, I’ll explain why in a minute), and because the staff we have also have to make adjustments to cope with a new style of management. Curtis and I both manage companies in different ways. For example, I like to always look for ways to improve what we do – I feel this is essential for both us as a company and for our customers who are always going to be in search of something better, and so they should be. The key is just to ensure you’re always improving and your own service is that  “something better”.

The reason I said above that it’s a benefit I haven’t run a hosting company before, is because while I’m not the most superb technical person in the world, I can surround myself with people who are excellent at what they do. It means they wont go cutting corners for the sake of a few dollars – I have to trust their judgments that what they’re doing is best for the customers and let them run the service at a top notch level while I handle the business side of things and a certain amount of customer support. I’ve always liked interacting with customers, and I guarantee if I’m ever a millionaire I’ll still be out there taking phone calls and replying to emails. Having the slight detachment from the actual technical side of things ensures our customers don’t have things “messed up” by someone trying to save a few bucks for their business.

Andrew Gould is our General Manager, and he’s the one making the decisions to do with technical solutions and improvements, plus he’ll take on board any suggestions I throw his way (turns out I occasionally have a good idea). More and more as time goes on and we get used to each other and our operating styles, Andrew will get more and more control over how the business operates and what the best result for our customers is. He’ll shape the way our customer service works (as he always has, it’s what’s made our customers so happy). If we keep the customers happy and don’t get greedy, the business will look after itself. I have no doubts about that at all. While we do agree with “if it aint broke, don’t fix it”, there’s no point falling behind and having things become outdated and stale. Our customers requirements will evolve and so must we to stay successful and useful. If Virgin Music was still selling LP’s, they’d be dead and gone 20 years ago. You have to move with the customer.

More than anything, the learning curve for all of us at Chombo isn’t “how will the new boss want us to do things?” it’s “how does the customer want us to do things?’.

Michael

Some of our customers are probably wondering what our “new position” is on things since we “passed the baton” so to speak. So let’s look over something that was written by Curtis when he was Managing Director and my views on it:

“The reliance on promotions to generate new leads is not congruent with the type of business that we are attempting to build. Don’t get me wrong – I am not suggesting that the use of giveaways and “90% off if you buy within the next two days!” promotions don’t get bums on seats – admittedly, if we were building a business to sell then we would have spent the predominance of our budget on advertising and ridiculous “prizes” rather than network infrastructure and ongoing operational-expenditure support.”

Curtis had a very strong view on this, and I do too. We need to have a purpose for running any promotion or giveaway, its primary function must be one that is beneficial to the business and not one made simply to “pump up the numbers”. Chombo is in a position that it does not require growth at extreme rates, but recently as most people are aware I made the decision to cut the price of our entry level $9.95 plan to just $3.95, as an ongoing price to the next 500 signups. Immediately, this made our competitors speculate on why we were doing it, and what purpose it served. Well, despite some of the more colourful ideas of why, we did indeed have a valid and reasonable business case for doing so. Chombo’s strength is undoubtedly its customer service and free value-adds in terms of the amount of inclusions. Lately, this has been expanded to include 8.30am to 5.30pm Monday-Friday Telephone Support, at no charge (some providers choose to charge an additional fee for this kind of thing).

The problem with this model is that it’s inevitably going to cause a higher entry price as it has higher running costs. That’s no secret. What I decided to do is show people who aren’t with Chombo what they’re missing out on by not being with us, and offer them a price level that they could sign up without feeling they were paying more than the most budget of providers sells for, despite the additional services we offer. So we did just that, we cut a whopping 60% off our plan price, and launched our free telephone support. This will get people on board so we can prove to them exactly what it is that we do better than the rest, and why it’s not always the best option to sign up just based on price, yet many people still do. Inevitably, our prices will go back up by some amount at some stage (except to the 500 people who take advantage of this promotion, it’s an ongoing price for their accounts), but people should start to realise exactly what they’re getting for that extra few bucks a month – a lot more than a few bucks worth!

“Maybe we’re doing it wrong. I’d like to know your thoughts.”

I’ll echo this, tell us what you think in the comments or email michael@chombo.com.au – I’m very interested in what people think of the way we do business.

Michael