Its true that a lot of people are trying to just get rich quick and then abandon their company. This shouldnt be the case especially with all the competition going on. Starting over could make it harder and harder if you continue that cycle. People should stick with their company and just work hard.

I am hoping that the customer are smart enough to stay far away from the I will do anything for $1 a month crowd.
I have seen many very low priced ads for hosting running around. I have seen support quality dropping as well with hosting providers. They have dropped their prices to attract as many people to their servers and then answer tickets at their leisure so that the response times are now going as long as an hour or more. And justifying it by the fact that you didn't pay much so you shouldn't expect much.
I think this is a horrible attitude.
To me if you can give top notch quality support at all times for what you are charging then that is your own fault not the customers.

This tactic is no different from a contractor giving you one price to get the job then jacking the bill up at the end to compensate for failure to properly price the job to begin with. To me it wreaks of dishonesty.

I think that it will be that some customers will leave their host to take advantage of the savings with someone cheaper due to the economy but when they see how lousy they really are they will see that it was not worth it and come back.
I would advice to be very helpful and cheerful and apologetic with customers for leaving that way they will be more likely to come back to you when they find out what mistake they just made.

I have been in business doing hosting since the late part of 1999 so don't feel bad. Even though I have been around for a long time that does not stop them from flocking over to some penny host with a flashy website that just started. It happens to the best of us.

It might be best to start two lines of marketing one avenue that emphasizes the cheapest rates around to catch those that can only see the price tag of the plan and not the actual value of what they are getting. And a premium line that emphasizes top notch services and support. That is a bit pricey but worth the value. At that point I would create two domains to market separately.

you just need to look at ebay the amount of unlimited reseller hosting for $0.99 a year or 5 yrs for $3.
being in the industry 11 yrs i know these prices are just a non starter, but being a bit cheeky sometimes if i am bored and see a new host seller on ebay i will ask them some simple questions that any host should know. i was amazed ad the replies from 2 of these cheap ebay hosts when i asked about DNS and dedicated IPs and on both counts the reply was "What is DNS and a dedicated IP"

not all Noobs as we were all Noobs at the beginning

Too many cut and run businesses are on the market. Unfortunately this does have a negative effect on legitimate hosting companies. These fly by nights will take in customer dollars, close after a time period and then open shop again under another domain. Industry professionals try to warn people that you can't get reliable hosting for less than the price of a cola but that doesn't seem to stop them from flocking to the lowest priced hosting. Experience is the best teacher and in time hopefully those in need of reliable service will see that good providers do exist for only a few dollars more. Too good to be true still holds as one of the ultimate truths.

ive had clients return to me after they left citing cant afford hosting when they have tried a fly by night who offers no support or just took their money and flew the nest