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Tech & Services

HostGator offers toll free numbers to businesses for free?

HostGator, the oft-embattled but ever popular web host, has unveiled a new service that provides toll free numbers to business clients. This service is offered at no additional charge with its flagship business shared hosting plan. HostGator offers this plan at $12.95 per month, and it has many unlimited features, including bandwidth, disk space, domains, and MySQL. The toll free plan, however, is limited to 100 free minutes per month, with 4.9 cents per minute after that.

Is that all you need to know? Is it ever?

You will rarely find a negative review of HostGator. Created in 2002 by then-student and current CEO Brent Oxley, HostGator is now responsible for approximately 1% of all internet traffic, hosting 1.3 million domains. It has over 5,000 servers. By all accounts, the customer service is phenomenal. People swoon over HostGator’s charitable exploits, including donating money to cancer research, and buying carbon offsets to neutralize and “reverse” its affect on the environment. This is truly good work.

That said, you will find negative reviews from time to time, and those negatives are usually glaring. They aren’t the typical “customer service never returned my email” type of complaints, but those that pick at the marketing model of HostGator. For example, many people took pause in 2007 when HostGator began overselling. Critics viewed this as a juvenile effort to get more customers by hyperbolic claims. Another cringe-worthy example is HostGator’s monetizing of 404 pages. They projected gains from this practice at $60,000 annual, but at what cost? Although 404 pages aren’t professional to begin with, having a 404 page with host advertisements and coupons is worse. The most egregious part is that customers pay for advertisement-free web space.

What in the world does any of this have to do with toll free numbers? It so happens that VOIPo, the company that will offer the toll free service, is a subsidiary of HostGator. It started up in 2006 by former HostGator Vice President of Operators Timothy Dick, and just came out of beta late 2008. HostGator is marketing VOIPo as a valued added service although it is intimately affiliated with its results.

HostGator Marketing Director Chad Bean is quoted as saying, “By providing toll-free numbers for free, we’re adding another service to our growing roster of free add-ons and helping to give our web hosting customers the competitive edge in the increasingly competitive hosting market.” One has to wonder, are they really answering the demands of their customers, or are they insinuating another service for their own gain, i.e. monetizing the customer?

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Discussion

2 comments for “HostGator offers toll free numbers to businesses for free?”

  1. Good story, Jacqueline. I think that while its a great sales pitch for HostGator to attract small to (probably) medium sized businesses to use their service, clients are not really forced to use the toll free number if they don’t want to.

    But it is a clear example when a large company like HostGator can, as you put it, monetize the existing client base. The difference is they try to pitch a service that either belongs or in some way affiliates with HostGator.

    Domain registrar GoDaddy can be used as another example. I don’t remember a single time when they didn’t try to pitch numerous domain related services/products during the checkout process. Very annoying.

    100 minutes is certainly a nice little carrot that might not take you too far, especially if you run a busy shop. In such a case it can end up costing a lot more if HostGator business users will find this monthly incentive addictive enough.

    However, it would be curious to see how their per-minute fees compare to industry standards to see if this add-on earns the status of being “value added”.

    Posted by Artashes Toumanov | Thursday, January 15, 2009, 9:17 pm
  2. I am pleased that HostGator is starting to look outside the box for ways to please their business customers and attract new business customers. 100 minutes is certainly not a lot so I believe that this could be also profitable for them in the long run. You are better of however just to get a toll free number through Skype.

    Posted by Jamesb | Saturday, January 31, 2009, 3:46 pm

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