Man, am I tired of being compared to cheap hosts, and what they offer.

While this issue came to me on another forum, the problem exists throughout the industry.

After posting an offer on a different forum, it was followed by a few compliments, and then one user implying that our prices were too high.

This irritated me beyond belief. It wasn't that fact that he questioned the prices, it was the reason he questioned the prices.

Every day we run across those hosts that start their company on a shoestring budget, get themselves a reseller package, and determine that the best course of action is to have the lowest prices in the industry, only to be out of business a month or two later.

The number of these hosts that are out there, create such a false saturation of this industry, that it leads consumers to believe that these prices are normal.

They don't take into account the costs of running a company, compared to the costs of running a hobby like business.

The costs of running a legit company have to be calculated into the prices you set for your packages, and of thus have reflection in your set prices.

Many consumers are made to believe that everything is free or almost free on the internet. Many of them have no idea about what it takes to power these technologies.

While it comes right down what the consumer's needs are, it also comes down to how much grief the consumer is willing to deal with, just to pay a smaller price.

It depends on the quality they can live with.

higher quality and a price to match may not be for everyone, but then again, some folks prefer fish sticks over lobster.

It's sad to say, but I truly feel that the only way they will become more educated in this aspect of our industry, is to get ripped off, over and over again, like a hammer smacking them in the head. Only then will many of them stop to say "Hey quit, that hurts"

Mark,

I know exactly what you mean. In fact, the other day someone had called and wanted a reseller account, 80 GB disk space and 1200 Gb transfer for $100/mo. I almost fell out of my chair. Then they proceeded to say that XYZ company is offering that.

Now I know in the back of my head that XYZ company wont be around for more then 5-6 months before they disappear. I dont let it get to me anymore. We are coming up on our 6th year and I have seen many "hosts" come into the market and fail within a few months.

I know we will be here for a long time and our customers know this which makes it all worth it.

I feel the same exact way. I see it here all of the time. "Sorry, I found a lower price elsewhere"...well, when your host sells you off, I'll be waiting. This industry isn't like the airline industry where you are still going to get there, just maybe without the peanuts if you go for a cheap flight. There are real factors to take into consideration when chosing a host besides price, unless you are running a personal site and you don't care if your site is up for about 3 minutes/month. I've taken on the attitude that if they have this mindset, I don't want them as a customer anyway, because all they will want is more for less.

Exactly. This is pretty much what I had stated to that member as well. Our clients choose to pay more, for quality, and the personal satisfaction in knowing that we're not going anywhere.

Totally correct. They also bring the aspect to the table that the sell is not over when they signup. You constantly have to fight to keep them, no matter how good your service is, because even while they are with you, they continuously look for the better deal. It's just not worth it.

If they can't recognize quality, too bad for them.

We legit hosts try to put all of the information out there, to help these consumers be more well informed, with forums like these, etc They just don't seem to catch on, no matter how clearly it is spelled out for them.

That is because some customers cant see past the $$$$ amount.

Example: I have a handful of customers that just call up to BS every now and then. I dont mind because they are good customers, and they always give me new ideas.

95% of cheap hosts dont even have a telephone number let alone a toll free number.

Why even try to cater to the low baller customers? That spells nothing but trouble. The more you give away, the more they expect. And they drop you for another host for $0.50 savings per month. Who needs that churn rate?

Target your site to real businesses. Preferably local ground level businesses. They will pay you exponentially more, give you many more referrals, send you far fewer support tickets, etc,. etc.

Stop thinking that you have to actually compete with the mass of online illegitimate "hosting sites" out there. You're just banging your head against the wall.

Vito

Indeed, I've done my share of this. Ironically foot size holes in PC monitors, don't sit well with computer repair shops for some reason.

Posts like mine come and go, and become a new testimony to why a consumer should research companies far beyond the price aspect, and a new resource that will be ignored by consumers.

We've done some local efforts in the past, and by far they have the best ROI of anything you'll see online. At the same time, you have legit companies however, seeing posts like the fella that posted in my offer on the other board, and saying "Well hell, if this fella is right, why should we go with these guys if they're charging more?"

It then becomes a matter of explaining to these people, exactly why you charge more than the other guy. Whether it is or is not worth the effort, is a relative issue. It really depends on how much you value that particular potential client's business, and if they will add value to your consumer base.

One of our newer clients, who is a member of HD btw, I truly love clients like him. No matter how much I tried to give him a discount, he kept trying to pay more lol by asking "Are you sure?" He understands very clearly the value of GOOD hosting, and a host that cares about their clients. He reminded me that not all consumers are out to get the cheapest price, and even though he said that he wanted to make sure he wasn't taking advantage of us, I'm sure that some small aspect of his concern was that he was going to get the same level of service and support as our clients that pay listed prices. That is a completely understandable stance too.

More consumers should actually take that stance.

I just don't think some realize that their site is protected the way it is - fire supression systems that won't damage servers, on site generators that will keep their server going in case of a power outage, etc... Most, it seems, think that said servers are run from a basement with a cable connection. :-p

The way I see it, as a customer:

I ask myself: what am I worth for this business? If they get a $1/month profit out of me, how much could they care about me? I see profit as a motivator. I like profitable businesses and I like to know that the other party is really happy with the deal.

Is there such a thing as outrageously expensive hosting? I'm sure there is, but that doesn't mean the host is bad or a ripp off. All businesses want a higher markup. Some are able to make potential customers see that a $100 value is there, some can only make them see a $10 value. Such is business.

I can't say that price should be totally disregarded though. We're all price sensitive, but each of us has his own threshold, depending on many factors.

Take my father for example. He makes some $250 per month, yet, if he had the money, he would be ready to spend 6000 euros on a certain new car (obviously what you'd consider a budget car, but that's luxury for the regular folks here).

However, I don't think I would spend those money on a car even if I earned $2000 per month. I just don't see the value there. That car would only be a liability in my eyes.

The optimum price/quality or price/value ratios are unique to each individual.

You cannot blaim someone for being cheap if you don't know their situation, level of knowledge, actual needs etc.

So, while for some, paying $1/GB of data transfer is a bargain, for others it's outrageous. Earning $1000/month can be curse for some and yes it can be a blessing for others. Everything is relative.

The average customer can easily live under the impression that hosting is $5 for 100GB when the price war is fueled by some "informational" sites, top hosts, many hosting directories and many of the "big hosts" out there. Wherever you go you see "sort by price", "best rates" etc.

My hat is off to those who manage to sell hosting at what should be the normal prices.

I can agree with everything you said.

A customer should not be turned away over the fact that they only want to pay $0.99/mo. The cost is not something that the host should be concerned about as much either, but rather what that client expects for $0.99/mo

There is a big difference between a client who wants to pay $1.99/mo and only needs 100MB space, and 2GB of bandwidth, and then the client who wants to pay $1.99/mo and wants 100GB of space and 1TB of bandwidth.

There is a level of responsibility on both the client and the host.

I think it more boils down to a client wanting the world for a few cents, while others that can see value, or the perceived value at least, know their budget, and are willing to claim their stake on whatever they can get, within a quality range, for that price.

I offer that. Its a dedicated server, which requires that they manage it.
Mojoservers.com ( i resell chi servers for them) offers a similiar thing for the same price, with a 24/7 tech at the datacenter.

Thats not all uncommon.


I do hate the people that offer amazing prices, amazing support (24/7 ability to support tickets [sic]), and then dont deliver.

Look,

Personally, as someone starting off in this industry as a total novice, I would naturally be interested in offering 'competitive' prices. For an average site (maybe a blog or forum like this one), $8-10 USD seems to be the norm as far as quality hosting is concerned.

Anything cheaper than that, I deem to be looking on the dodgy side. There is however a difference between 'insanely cheap prices' and 'discounts on the regular price'. I for one know that (and in fact I got another today), Globat sends me discounts on my next contract. When the year expires (so as to keep me as one of their customers) they send me emails giving me 50% off their package if I buy a year upfront. I'm not sure that is altogether bad...They're not moving me off the package I've been satisfied with for the whole year. Instead they're just offering me a discount in order to stay as one of their 'valued' customers.

Therefore I would say that it 'is possible' to get decent hosting for cheap prices, as long as you play your cards right. Then again, it is also an earnest upon the customer to get their choice of package right before they purchase it. A site like HostingDiscussion isn't going to fare very well on a 200mb/5gig package, whereas PlayDesign.co.za gets only a few hits a month and can survive easily on that sort of package...

In the end, I think that this sort of decision is often overlooked on account that the consumer is looking for the most cost effective way to get what they want, 'INSTANTLY', when in fact they will find that they trip up, further down the line!

Regards,
~Equinox

I totally agree.

There is a major difference. Some consumers even get this confused however, and determine that these are your normal prices, surprisingly, even if you stats "Sales" or "Promotion."

We've been in that boat a few times as well.

I agree. I can add that it is a totally different thing to offer huge discounts on the regular price when the prices are already insanely cheap.

I make 40-50% profit on most of my plans. And they are large and costly enough, that I can give personal and very lengthy support to each customer.