Price VS Quality / Quantity

[Tech Entrance]

As you all may know. web hosting is a very competitive industry and it's not easy to get a client and in marketing there are many approaches to make sales and 2 of them in hosting industry are:-

 

1- High Price > Hard to get a client > Easy to maintain (Less support).

In this approach you have less number of clients and getting more $ per client and you don't have to overload servers to make profits so clients love your fast servers and with less number of clients you are able to handle support quickly so your clients enjoy having faster support.

 

2- Low price > Get clients easily > Hard to maintain (Support stress).

In this approach you want to get as much clients as you want so you offer low prices (those 99 cents plans) but with loads of clients you have to get some support staff and the cost per ticket is high for you and you need 1000 clients on the server to make profits.

 

I know low price will give more quantity and the cumulative profit might sound larger but would this be enough for you to handle supporting much cheap clients ?

 

What approach are you using ? is it working for you ? how do you handle it's negative side ?

[robbo]

I don't have high prices but I don't have low either. My plans are set to provide a quality service at an affordable rate to customers, without overselling.

[Si]

Why do one? I do both.

 

Granted for 9 years I did the low end only.....with a very high level of customer support. It wasn't oversold on the site, we probably undersold and then exceeded customers expectations. Long term though, its unsustainable. So.....

 

I have just introduced high-end hosting as an additional option to with a totally new range of hosting plans. Some customers have moved across to the high end from the low end. They pay almost 3 times the price but now get a SLA with defined support and standards.

 

It has also helped manage the expectations of my low-end customers. If they now expect support on demand in 10 minutes, they see that others are paying more for those services and so don't expect it.

 

Si

[generic]

the low cost hosting is for the birds. tons of support issues, tons of spammers and others that dont understand programming etc just starting out will choose you if your cheap. they will get your ips banned and screw up your server with bad programming code. just not worth it.

 

there is no way you can compete with godaddy and 1&!. if you really want to offer it cheap, just resell godaddy. then you have no support issues, etc, just collect a few $$ a month.

[chickendippers]

I'd like to think we have a nice balance of the two

[Troy]

Nobody has mentioned pricing. Where is the line between higher price and budget price?

 

I consider our service to be budget priced, at $8.95/month, (lower with longer term), for 10GB storage, 100GB bandwidth, unlimited domain hosting on CPanel with pretty much all the features on and unlimited. Our dual processor servers average a load well under 1 because everything is tuned. Spam Assassin is tuned and does a good job blocking spam connections, CSF blocks intruders and disables scripts that attempt to exceed our hourly email threshold, so even if a spammer breaks in he can't really get enough spam sent out to cause problems for us.

 

Sometimes though, you see the crazies like HostGator promising so much more for less, and $8.95/month starts to seem like a higher price.

 

Those of you in this discussion should indicate your price and features so we know where you're coming from.

 

We've done fairly well, but we also serve a vertical market that probably limits the number of "bad" customers we get. I do about all the support and systems work, and our customers get very fast support responses. I am, however, thinking about raising prices myself.

 

Whenever you have more business than you can handle, you should increase your staff or raise prices. If you raise prices in small increments, you may lose some of your customers, but your most appreciative and loyal will stay, and the raised prices will cover the loss of customers. In turn, you'll typically earn the same or more, and have less work to do.

[railto]

our lowest plan is €5 per month or €55 per year for 1gb hdd and 10gb trans, i class it as budget hosting, but just dont seem to have that many issues, most of our users seem to have a fair understanding of scripting, which is a real blessing

[Jordan]

Honestly being a smaller hosting company, it IS hard to compete (as if it's possible) with places that offer high [oversold] volumes of disk space and storage. People equate less money spent with getting more for their value.

 

When I started off, I had small packages, with small prices to match. Eventually, I upped the disk space and bandwidth, as well as the prices. But I made it so that even with a budget, you can still afford to pay per month or even annually.

 

I don't think the my support is any less effective if I were to offer expensive packages versus cheap packages. It's just the client base that I attract, rather than what I sell.

 

Even so, I do think that you have to have a good mix of quality but still make it affordable for your market. Just look around and compare to other hosting companies that don't have massive amounts of resources (eg: their own datacenter.)

 

My approach is typically the 2nd approach, though your "99 cents" plans are hardly what is offered. To me, that's just asking for malicious activity on the server ;\