Do you know who you are?

– Robert Kruger 12 March 2012

I have, on occasion, used a business that delivers propane tanks to my home. It’s convenient and equivalently priced with the big box home improvement stores. It is such a simple business model. You go online, tell them how many tanks you want and where you will leave your empties, and when you come home from work, you have new propane tanks.

One day I received a marketing email from them saying that they now deliver mulch for gardens and flowerbeds. Since I can’t help analyzing everything, I picked apart their new product offering. I concluded that they do not understand who they are. As a propane-only company, they were not a retailer. They were a delivery service. I did not go to a catalog page and choose which product I wanted to buy. I simply asked that they deliver some propane. Now they sell mulch. My first thought was, “I wonder if they sell the mulch I like to buy.” If they want to sell to me, they will need a catalog page on their website where I can shop to find my favorite mulch. That’s not a delivery service. That’s retail. Where they previously only needed to know quantity, now they need to track SKUs, quantities, available inventories, etc.

Another company I tried touted themselves as the lawn-mowing service that actually provides customer service. They have a website that allows you to schedule your lawn service, pay with a credit card, etc. All that appealed to me, compared to my previous lawn-mowing experiences.

They mowed my lawn twice, and then I fired them. They did a bad job. When I called them to talk about the quality of their work, they were argumentative and defensive. So much for customer service. The only difference in their business is: they have a website. So what? A website is a business tool. It is not, by itself, a business. They didn’t get that.

We recently saw an ad that HostGator now offers voice over IP (VoIP) service. That’s where you can make phone calls via the internet. HostGator is a web hosting service that has made an attempt at selling to businesses.

Adding VoIP Services may backfire for HostGator. It may reveal who they really are.

Like the propane delivery service, HostGator appears to be running two different businesses. Bundling services is the only way to make this profitable. They will likely continue to fail selling their commodity-grade web hosting to businesses who recognize that a website is a critical business function, even though they might consider the HostGator VoIP service. So ... no bundling opportunity with businesses. If HostGator successfully gets into the consumer VoIP market, it will be due to bundling of consumer-level websites with consumer-level VoIP. This will reveal that they are not a business solution for web hosting. HostGator’s attempt at growing their business by adding another service may have the opposite effect.

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