Above all, in web hosting there are three key issues that must be planned out carefully in order to run a successful web hosting business. First and most importantly, involves running a cost-efficient, but effective customer support team. Second, involves a error proof e-commerce system. Third, failsafe equipment.
The most important factor in web hosting is customer service. A few arguments can be made for pricing and features, however, any gains made from those will be lost quickly if using an inept customer support team. If one's web hosting service is cheap, the onus is on the web hosting company to defeat the myth that cheap means low-quality. If a customer is impressed with the customer service, in turn this may lead to positive word-of-mouth spreading about your business, which leads to free sales leads in the future.
The second factor is fine-tuning your e-commerce system to ensure it will not make errors, and perhaps fine-tune those people who are handling it. As Dreamhost demonstrated in January 2008, a simple "typo" on a charge they were doing for the prior billing cycle led to $2 million in erroneous charges. The resulting fury over it, led to a substantial portion of their customers leaving, and left bitterness in many of those who continued to use the service, as many suffered increased interest payments and overdraft charges, regardless that the refunds were given. Such a situation can deal a deathblow to any web hosting company and must be prevented even if it means shelling out more money for a better e-commerce system, or hiring a more qualified worker to handle it.
Third is to ensure the equipment hosting your clients' webpages is failsafe. Once again, Dreamhost provides a good example of what not to do, which was having a lack of sufficient back-up power to last through the LA blackouts, whereas a fellow Los Angeles based web hosting company LunarPages managed to survive both of the larger scale blackouts over the past decade. In this industry, many of the potential clients are well-researched and will remember such errors. For those who don't remember it, there might be a dozen more anti-websites which spout hatred of your product over that event, which can serve to deter many potential buyers to a competitor who does not share that problem.
All of these factors are important to remember in sustaining your customer base, and will help it to grow as long-time customers will frequently recommend their hosting service to friends and colleagues.
