Web Hosting Costs

[webling]

Should a web host raise their customer prices after a long period of time? Or is it better not to raise prices? I have had one customer for 10 years now who still pays the same thing.

 

[Artashes]

That is a very good question actually. Would love to see what web host operators say to this.

 

[webling]

That is a very good question actually. Would love to see what web host operators say to this.

That's what I'm hoping to hear also. Not sure this will be a popular thread, but I'm testing it on my own network since I have nothing to lose in doing so because of the way I have things structured. I know the trend since I started in 1995 is that web hosting prices have actually kept going down. My first virtually hosted website with 500MB of space was $30 a month. Nobody would pay that now since we can get 10GB VPS for as low as $25 a year these days for a bare bonez server with just CentOS on it. But what I am seeing is that trend now taking a turn. I hope I'm correct in my evaluation of the market even though this industry is extremely competitive. My first dedicated server I ever ran was out of my own home on a dedicated with with Linux 6.2 and I ran my own domains editing the configuration files. We didn't have Plesk, cPanel or other such things even though I saw the vision for it. When I presented it to the support at my upstream provider they thought I was cRaZy, but we have that and more today. And I crazy now?

What I'm working on next is Websites for $9.95, not per month, per year. Now you can call me cRaZy, but I already have a way of making it work. And I assure you, I am NOT insane. Yes, I had myself tested.

 

[HostMarket]

I think if the customer is happy and still paying why cause them to maybe want to leave you after you tell them about price increase. This is just my 2 cents

 

[Artashes]

As a customer, I don't like price increases. But I can understand them, especially if properly explained why they take place.

On one hand, a price increase can relate to rising cost of business, software price hikes (looking at you, cPanel), development that goes directly into making my life as a customer better, etc. On the other hand, I do not see why you would annoy a customer who is paying a monthly fee for 10 years. Chances are, the package that I signed up for 10 years ago would actually be less expensive today, so if anything, you should be adjusting the price/package in reverse.

I greatly value companies who manage their clients' offerings proactively. Conor from BigRedSEO used to do that with the company he used to run. For example, they would upgrade my server's RAM free of charge, just to keep the specs in line with the price I was paying, against competition. I thought it was a brilliant strategy, one that would win any customer for life.

 

[easyhostmedia]

You have to think more than just the server costs when looking at price structures.

when i was hosting i was paying $48 a month for my managed server, but as i am in then UK and with the currency exchange this equated to anything from £35 to £45 a month.
then i have WHMCS, Softaculous, various security packages, backup packages, modules etc.
you then have your wage and staff wages (if any).

Just like any business, these prices from suppliers will increase and yes you will try and keep your prices the same, but sometimes this is not possible, so prices have to increase.
Here in then UK we must inform customers at least 14 days before any increase of the planned increase and the reason behind this. In my 18 years as a webhost i only increased prices twice and i never lost any customers over theses increases.

 

[ughosting]

If your old customer is not costing you money, then you should leave them alone. Chances are that they are one of your new customer streams.

The minute that customer starts costing you money though, then you should look to raise the prices, you cannot afford to lose money to keep customers. (Do take any new customers they bring into this equation though).

One of the biggest lessons I learnt, was to let unprofitable customers go. It goes against the grain because you have to fight hard to get a customer. But you will need multiple customers just to offset an unprofitable customer.

I'm happy that my time running a business is over!
I merely rent space now to subsidise new ventures.

 

[webling]

If your old customer is not costing you money, then you should leave them alone. Chances are that they are one of your new customer streams.

The minute that customer starts costing you money though, then you should look to raise the prices, you cannot afford to lose money to keep customers. (Do take any new customers they bring into this equation though).

One of the biggest lessons I learnt, was to let unprofitable customers go. It goes against the grain because you have to fight hard to get a customer. But you will need multiple customers just to offset an unprofitable customer.

I'm happy that my time running a business is over!
I merely rent space now to subsidise new ventures.

This was in the back of my mind, thank you for saying it. Mostly it is because server costs have gone up. And my increase that I am working one is not a lot, it's just to keep up with my own expenses. I have carried the extra cost of going from SSD to HDD over the past two years. But in my estimation with SSD becoming the standard, I think a reasonable increase is justified and fair.

 

[webling]

I think if the customer is happy and still paying why cause them to maybe want to leave you after you tell them about price increase. This is just my 2 cents

Under normal conditions in the past I am in full agreement. However, every industry takes a turn that challenges current prices and other things, not only are we now dealing with a drastic cost in cPanel being increased, we are seeing SSD becoming the standard over HDD. So we are having to deal with a lot of considerations at this time and over the course of this year and next year. We're not looking at any isolated incidence, but more changes now than I can remember in the last 15 years that I have become involved in any kind of web hosting.

Many new companies if you have kept up are now developing server management software that hopefully will compete with cPanel. Remember what happened to AT&T before they disappeared? They are doing the same thing again now and many people are moving to other providers. History repeats itself, and not that I want to hurt anyone, but when they figure out how to seduce people in such a way that they become dependent that it crushes everyone else, that's just down right evul. (spelling errors intenshunal) Everyone needs a fair chance and even the courts of our land in the USA support that. I have a lot more to say but hopefully this is enuff for now.

 

[webling]

As a customer, I don't like price increases. But I can understand them, especially if properly explained why they take place.

On one hand, a price increase can relate to rising cost of business, software price hikes (looking at you, cPanel), development that goes directly into making my life as a customer better, etc. On the other hand, I do not see why you would annoy a customer who is paying a monthly fee for 10 years. Chances are, the package that I signed up for 10 years ago would actually be less expensive today, so if anything, you should be adjusting the price/package in reverse.

I greatly value companies who manage their clients' offerings proactively. Conor from BigRedSEO used to do that with the company he used to run. For example, they would upgrade my server's RAM free of charge, just to keep the specs in line with the price I was paying, against competition. I thought it was a brilliant strategy, one that would win any customer for life.

One of the things with my own upstream provider is that with my newest server if I upgrade they said they will give me double the RAM because I have been a long time customer with them so I can run the server management software I want to use which is CWP. Now, I do think that is a combined effort because they haven't put that into production yet either and as we work together we can learn from one another. I do communicate with the techs in the data center and share info. So there is value in a long time hosting customer and not raising prices for THEM.

So what I am considering is that even though I have raised prices across all of my hosting plans, is to see if I can keep current costs the same for long time hosting customers.

 

[webling]

What I have done.

I decided to raise my prices for NEW customers, without reflecting this fact on my site. But the new prices are still lower than some hosting companies out there who operate in a similar fashion to my own company. But I kept prices the same for my current hosting customers.

I gleaned this understanding from the company I rent my apartment from actually. They are the best company I have ever rented from. I had owned my own homes for over 20 years and considering going back to renting during the past recession. I kind of shuddered when I thought of going back to renting because when I was young I rented from some landlords that resembled Hitler to a degree. At least in my mind.

I try to listen a lot, and also consider what I like and dislike. This is one of the things that has helped me throughout life. So even though I am sharing about renting and owning my own homes, this is about marketing and many of the same concepts in real estate hold true in the web hosting industry I am learning. I have a lease with my apartment and I am thankful that I do. And it is a reasonable lease. Yes, I'm one of the few people who reads this lease while I am sitting in their office making them wait until I decide to sign, or reject it. Okay, enough of that.

So here goes, I restructured everything in my company so it pleases me if I were the customer. Does that sound fair?

 

[aclassnz]

Web hosting should be treated like any other business
Overtime your costs can increase and if so you need to pass on those costs usually in order to maintain a profitable business
But you also need to balance this with keeping your customers happy and making sure you are still providing a great service for the amount you are charging
Another options when you costs increase instead of raising prices is to look at different ways you can structure your business to bring your costs down and have a much greater chance of retaining customers
Last point you are better to have small price rises if needed than wait too long and have a large increase, this will upset customers much more!

 

[easyhostmedia]

Web hosting should be treated like any other business
Overtime your costs can increase and if so you need to pass on those costs usually in order to maintain a profitable business
But you also need to balance this with keeping your customers happy and making sure you are still providing a great service for the amount you are charging
Another options when you costs increase instead of raising prices is to look at different ways you can structure your business to bring your costs down and have a much greater chance of retaining customers
Last point you are better to have small price rises if needed than wait too long and have a large increase, this will upset customers much more!

I agree when i first started hosting and had a good clientbase i had rvsitebuilder as the business grew and i needed a larger server which was more expense i looked my overheads and RVskin was not being used, so that went saving $19 a year and when i looked at RVsitebuilder 2 clients out of the 150 i had at the time were using it, so i contacted them 2 clients and found they were only using it on test sites and asked them would it be any lose to them if i stopped offering rvsitebuilder and they told me would not bother them if i was not offering it, so i removed it from server saving $60 a year.
I then amended all plans for new signups with a new price and then made a small 50p increase for current clients, but giving them 14 days notice of the price increase and i never lost any clients.

 

[technicalguy]

A few years ago I had bought a web hosting customer base which was offering crazy low prices - and almost zero-sum profit, however it looked like a faithful customer base. Raised prices and lost 70-80% within a 2 years.
Yes, you have to raise prices, but you also need to understand your customer base. Why do they choose you? Are they strictly price conscious? How long has the price been the same?
At that time I had mis-read the client base.
Make sure you know yours.

 

[easyhostmedia]

A few years ago I had bought a web hosting customer base which was offering crazy low prices - and almost zero-sum profit, however it looked like a faithful customer base. Raised prices and lost 70-80% within a 2 years.
Yes, you have to raise prices, but you also need to understand your customer base. Why do they choose you? Are they strictly price conscious? How long has the price been the same?
At that time I had mis-read the client base.
Make sure you know yours.

I think if you offer excellent support and communicate with all your clients then you have more chance to keep clients if you have to increase the prices.

It was May last year that i closed down my hosting business and even now i get ex clients asking if i would start up again

 

[adroitssd]

While increasing price you may offer some extra benefits to that client by considering 10 years of business!

 

[easyhostmedia]

While increasing price you may offer some extra benefits to that client by considering 10 years of business!

You would need to look if these extra benefits would cost you money as no good increasing prices and then give clients benefits that would wipe out the price increase.

Its a fact of life prices increase, just look at supermarkets where prices increase almost on a weekly basis, but hosting a price increase maybe annually or biannual.

It is how you handle any increases, you have more chance of losing clients if you just increase prices without notice, but if you inform clients at least 14 days before any increase and give them a reason to why you are increasing the costs then you have less chance of losing clients.

 

[HostOX]

hmmm hard one! Personally I have done it a little over the years but not much and mostly to new signups only.

You have to rise with the rising costs so even if you do, they will only be slightly.

One of our datacenter emailed us a few months ago and said prices were going up by 2% but I never really noticed much extra on the bills.

 

[easyhostmedia]

hmmm hard one! Personally I have done it a little over the years but not much and mostly to new signups only.

You have to rise with the rising costs so even if you do, they will only be slightly.

One of our datacenter emailed us a few months ago and said prices were going up by 2% but I never really noticed much extra on the bills.

The worse i had was related to brexit. I had a backup server in Germany and was paying $7 a mth, when then leave vote was announced within 24 hrs i got and email to say then my price was going from $7 to $21 a mth.

I will not print my reply to them on here otherwise i may get kicked off HD

 

[adroitssd]

You would need to look if these extra benefits would cost you money as no good increasing prices and then give clients benefits that would wipe out the price increase.

Its a fact of life prices increase, just look at supermarkets where prices increase almost on a weekly basis, but hosting a price increase maybe annually or biannual.

It is how you handle any increases, you have more chance of losing clients if you just increase prices without notice, but if you inform clients at least 14 days before any increase and give them a reason to why you are increasing the costs then you have less chance of losing clients.

If that extra benefit costs a very littel portion and the client becomes happy to pay increased price then I see it's a good idea.