Too many discounts?

[Acalita]

Is there such a thing in the web hosting world? I read an article earlier today that mentioned how so many people are now addicted to getting a good deal that they almost demand it, if you are not discounting they are not buying. Does the same hold true for web hosting? How many discounts per year do you give?

 

[dedideals]

We do quite a few discounts, but it is quite heavily filled with people discounting.

In my eyes it's ok, if you manage it well - But if not managed well it can go wrong.

 

[DJAB-Milo]

We do some discounts, as I am sure most companies do.

I am not sure of a single company that doesn't offer discounts when trying to obtain new / existing customers.

But like dedideals said - it should be managed properly.

 

[VMhosts-Gordon]

Discounts and promotions are a necessity. That goes for all business not just the hosting industry.
I do agree with the fact that, discounts are now expected, that may be a bed modern business has made for itself.
There has to be a balance however, discounts are fine to help get you noticed and attract new customers, but it's hanging on to them which is the real skill

 

[SolidShellSecur]

Company name speaks. The REAL and HIGH paying clients go to a company name they know and trust. That is how we make the most money is off the real big players.

Simple fact: discounts will be a waste of your time. You get a client in low and the moment deal is over they jump to the next.

 

[new2webhosting]

Discounts are just a form of marketing, to get new business in the door and every now and then, to keep old business from walking out the door. I think they're just as essential in the web hosting world as they are in any other industry operating for profit.

 

[DJAB-Milo]

Simple fact: discounts will be a waste of your time. You get a client in low and the moment deal is over they jump to the next.

We have generated some very loyal clients who started up on promotions.

 

[handsonhosting]

discounts can definitly hurt a busienss.

I was a manager at a waterpark in Palm Springs, CA and the owner decided to run a "locals" special. For the entire summer, residents of Palm Springs area could get into the waterpark for only $9.00 (as opposed to the $17.95 normally charged). It was a great promotion and we have a huge flood of new customers throughout the year.

The next year, the owner figured if it worked for just the 3 month promotion, it'll be great for the entire year - so he ran it again. And it was a success! Lots of new visitors, and it increased profit initially, until numbers were done and we found that really locals were just going TWICE in the year rather than ONCE, so the promotion was actually a wash.

So the next year, no promotion - the uproar was insane. People demanded the discount as they'd gotten it for 2 years and now refused to pay the huge rate increase (even though it was originally a discount). Locals actually boycotted the waterpark for the following 2 years until the owner was FORCED to bring back the discount.

Essentially, the owner had devalued his product by running the discount, and now people perceived the value to be $9 instead of $18.

Discounts can hurt just as much as they can help!

 

[Acalita]

That is something that I would wonder about. What is the correct balance between offering discounts but not getting into the area where customers demand it or go elsewhere. At some point you can not please everyone.

 

[handsonhosting]

There's no single answer for the right formula - only which one works for your industry or niche business.

Godaddy can afford to put a 30% discount online every month, and still make money. 1&1 puts up a 12 months free discount, and still makes money.

It all depends on what your upsell is (in both of these cases, they upsell quite a bit), what your overhead is, and what the life expentancy of the client is (both churn and burn).

Smaller companies generally value their clients more, and as such don't rely on the churn and burn marketing mentality.

 

[Jon N]

We have new discounts every week and it keeps the flow of customers going.

 

[webmarshals]

Discounts do play their role and even big players follow it to add more customers

 

[a2hosting]

I think you find that most hosting companies run the same discount year round. They may run something special for say Cyber Monday, but generally most hosts run an introductory price promotion. I also think coupon sites are so prevalent that customers are searching for a coupon before they purchase anyway,

 

[_ed_]

Why not consider discount for existing customers as well to reduce bounce rate. Something like "Thanks for staying with us for whole last year next month is on house".

 

[Pay4products]

Giving discount is as hurt as helping to every company/organization.

Discount bring much more customers who need cheap products coz they have little with them, though it hurt you to gain a little loss and it help you to have many customers.

It helps.

 

[Collabora]

Some discounts turn me off. For example when web hosts (and others) will put a promocode on the site and making you enter it on check out to get the discount

 

[easyhostmedia]

Some discounts turn me off. For example when web hosts (and others) will put a promocode on the site and making you enter it on check out to get the discount

well how would you expect them to give the discount, especially with automated systems than most host have no idea on how to use correctly.

In WHMCS you can add the promocode to the order link, buit if this is a short promotion then the time it would taken them to amend their pages and then remove the code from the order link at the end of the promo would just outway then just placing the code on their site for you to use it.

 

[Collabora]

well how would you expect them to give the discount, especially with automated systems than most host have no idea on how to use correctly.

In WHMCS you can add the promocode to the order link, buit if this is a short promotion then the time it would taken them to amend their pages and then remove the code from the order link at the end of the promo would just outway then just placing the code on their site for you to use it.

Traditionally promo codes were found at other locations and businesses that would be partnering with the hosting company. For example I purchase some web designing software and get a discount at the hosts' site by entering promo code that was supplied by the software company. Or the hosting company might put a code on an advertisement.

For the hosting company to just put the code on their site next to the buy-now button without any actual promotion is just plain silly and a come-on. Just lower the price instead of playing games. Its an insult to my intelligence

 

[easyhostmedia]

For the hosting company to just put the code on their site next to the buy-now button without any actual promotion is just plain silly and a come-on. Just lower the price instead of playing games. Its an insult to my intelligence

these are not playing games its up to the business on where and how they use promo codes.

if they have a promo code then they are running a promotion.

we have used promo codes to gibe the first month free rather than provide free trials and have placed the promo code above the order link, but also added the promo code to the order link, so the discount is already applied to the order. this way is stops spammers that do searches for free trials so they can take the free trial and abuse your server during the trial period

 

[infinitnet]

I've experienced that most clients in this business would ask for discounts before they order, no matter how cheap the services already are. I think this is because of the large competition in hosting and most of them doing coupon promotions and giving discounts to get their clients, so people are just used to it. And well, it seems to work.