Budget-trimming has become a part of every business (adult and otherwise) in recent years, an inevitable reaction to sluggish sales that inspires business owners to cut spending, reduce costs and downscale their operations to lessen the financial impact of declining revenues. This process can be painful, as this belt-tightening often is aimed at the heart of the company: its staff.
Eager to avoid that kind of drastic move, many companies scale back on what they consider “extras,” or less essential spending — including scaling back on bandwidth and hosting costs. While this move might seem logical from the outside, it’s a huge mistake in the long run. There are ways to cut costs without cutting corners and getting by with service that “good enough.” Here are two common cut-backs, and what we recommend scaling back on instead:
There are tools and services available that allow you to monitor and reduce consumption without cutting into your site’s total available bandwidth and performance.
Cost Cut: Bandwidth
For video-heavy sites, premium bandwidth is mission critical and worth every penny. Your customers expect — and demand — quality performance: videos that play without buffering, downloads that don’t chug along, and page loads without delays. Discounted bandwidth is appealing for its low sticker price, but the consequences far outweigh the benefits: just one negative experience on your website and you’ve lost a customer. And unhappy members = poor membership retention = decreased revenue, which leads to more cost cutting — it’s the very definition of a “vicious cycle.”
Money Saver: Monitor Consumption
There are tools and services available that allow you to monitor and reduce consumption without cutting into your site’s total available bandwidth and performance. Your current hosting company may offer tools that allow you to see where your bandwidth is being burned, even letting you drilldown to the specific user and IP address, and identify members who are making the heaviest use of your sites. (And if your current host doesn’t offer this option, you can find useful software from outside sources.)
You may find members who are abusing their access, running download managers that pull down content in bulk as quickly as possible — in some cases with the intent of redistributing your content without permission for their own profit. ID these users and throttle their connection — or ban them outright.
Another tip: by monitoring user behavior, you may find that you can save money by changing the way you deliver content. If you find that most users watch only a few minutes of any given scene, but your current delivery method downloads the entire file each time they press “play,” you may want to explore a different streaming option. Adaptive bit rate, for example, streams in real time without downloads or buffering and can save an average of 50 percent of bandwidth use compared to traditional progressive download.
Cost Cut: Hosting
Because hosting isn’t a “visible” expense, it’s easy to consider reducing your program to be a harmless solution. Moving from a dedicated server to a shared plan sounds good on paper, but before you make the call, consider the consequences. Sharing server space costs less, yes, but if your website is your bread and butter, you risk dramatically affecting its performance to the point of profit loss.
Remember: you have less than 30 seconds to engage your viewer, and it takes only a few seconds of delays before he or she clicks away to the competition. Research by Google engineers (reported in the New York Times last year) shows that if your site is slower than a close competitor’s by more than 250 milliseconds, users will stop clicking your way. That’s faster than the blink of an eye. Switching to a cheaper hosting plan will simply slow your website speed and, in turn, risk losing customers to your competition. It’s just not worth it.
Money Saver: Conserve!
This may sound silly, but you’d be surprised at how much money you can save through simple adjustments in behavior and resource allocation at the office. Over time, even something as simple as setting your thermostat a few degrees cooler in the winter (or hotter in the summer) can save thousands of dollars every year, and the same goes for turning off lights and appliances overnight.
We also recommend making changes to your supply use, such as requiring paperless communication and document sharing until the final product is approved. Paper doesn’t come cheap — and it comes from trees, remember? — so implementing a document sharing program (or simply using Google Drive) has helped many of our clients considerably reduce paper, ink and printing costs. It also makes it easier to keep organized and make sure everyone signs off on the final result to avoid costly mistakes.
These cuts may seem insignificant, but they add up over time and save you money in ways that your customers won’t even notice. Because any changes that reduce your site’s performance will only result in further revenue loss, which defeats the purpose of those cuts in the first place.
Steven Daris is CEO and co-founder of Red Apple Media (RedAppleMedia.com), a managed hosting, ecommerce and video streaming solutions provider.
