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Two Markets: Personal & Business

Both markets are appealing for different reasons, but they have very different needs and as such, very different prices.

If we exclude the plethora of ‘free’ Online Backup services, the average fee for a personal backup is $5-$40/ month at the time of writing, with absolutely no need for any kind of server backup or system state/ active directory backup function. However, personal users are often apathetic, impatient and (I mean this in the nicest of ways) ignorant. Sure they can turn on the computer, surf the net, sync iPods and edit photos but if ANYTHING goes wrong with their computer, you can establish yourself as their “go-to” IT guy for all future IT problems.

When it comes time to consider what to charge your personal users, you have to take into account: Who is my target market? What is being backed up? How much support will they need? Examples of target markets are:

  • Students
  • Teachers
  • Digital hobbyists (photographers, designers, creative types)
  • Writers
  • Musicians

Although some of these markets may blur the line between personal and business use we will assume that all these people simply want to protect their data on their personal computer at home be it their research, their photos, their documents or their (original) music. I say original music because it is fine to back up someones own compositions, but pointless backing up other artists music that is readily available on CD or iTunes unless they’re happy to pay you to store it anyway.

Now, what to charge different people for your personal service? A 5GB backup should cost somewhere between $5-$10/ month. You should offer people unlimited over the phone support for $99/ year. The big boys do this and there’s nothing stopping you from doing the same.

Payment should be nothing other than direct debit, and you should charge a years’ fee upfront where possible, giving you access to more money more of the time and avoiding delayed payments in the future.

If a small personal user only contributes $159 a year (12x$5 plus $99 support plan) then obviously you need a large number of paying customers to make the service worth your while. Coming up in our next blog are ways in which to market to the personal space AND potentially pick up new business customers at the same time!