Why having the lowest cost isn't always the best

J

JamesCWilson

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As we all are well aware, the web hosting industry is full of many hosts which over hosting solutions for very low prices, but many of these same hosts offer service that is inferior to hosts which charge only a little bit more. Hosts such as Host Gator and other large low cost providers count more on a constant influx of new customers, as opposed to returning customers. So what usually ends up happening is these customers will try to move on to a better host after a short while, and many of them are probably going to go for a host which costs a little more on a second try, and chances are they will be a little more cautious about what they choose the second time.

My point is, it's better to charge a few dollars more, than to skimp on a services quality. Forgive me if this post doesn't entirely make sense, but I just woke up.
 
Just woke up?!! It's 11:30PM !! Only kidding .. your post makes sense. The one thing you cannot skimp on is customer support. It's so much easier to retain a paying customer then to sign on new clients.
 
Yes, taking care of the clients you have now is easier than finding new clients. Also, if you take care of your clients then your clients will refer their friends or family members; which in turn brings in more clients. :D
 
its always better to have ten customers than 25 paying less, if the monthly income is the same - 50% less support calls for a start.
 
its always better to have ten customers than 25 paying less, if the monthly income is the same - 50% less support calls for a start.
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I'd have to say it depends, actually. With 10 customers, you are more reliant on them to stay because each customer counts for a larger proportionate share of your revenue. So, in theory, you could spend as much or even more to keep these ten customers than to support your 25.

It depends upon what the clients expect and what the host offers.
 
webfreak08 said:
I'd have to say it depends, actually. With 10 customers, you are more reliant on them to stay because each customer counts for a larger proportionate share of your revenue. So, in theory, you could spend as much or even more to keep these ten customers than to support your 25.

It depends upon what the clients expect and what the host offers.
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not really, as you have more time to spend supporting the client which helps retain them. If you quickly upscale the numbers to 100 / 250 or 1000 / 2500 you soon realise the need for long term quality clients.
 
If you quickly upscale the numbers to 100 / 250 or 1000 / 2500 you soon realise the need for long term quality clients.
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Exactly. However, wouldn't you have a better chance of finding one in a bunch of 25 than in a bunch of 10?

All I'm saying is that it depends. I'm not necessarily "for" one or the other.
 
no as the 25 are paying far less that the ten - different type of client and more realistic to stay if the service is good. Point being if your price point is more realistic (higher than lower) you can afford to give the service they expect,
 
The number of new customers is important. As you said most will leave and to choose their second, only a few will stay. These people could be chronic clients. And most of profit are from these clients.
 
Web Hosts should never be afraid to charge as much as they feel they need to, and if your service is of a high enough quality, customers will keep coming back to you, even if you may have fewer of them, than the lower priced hosts would.
 
I actually agree wholeheartedly. With my new cloud hosting venture, Stratocenter.net, I'm shooting for the real high end of the market. The low end customers in this industry are often more work - i.e. my colo provider has customers that buy from them 1U for $52.99 a month and file 10 support tickets in a given month, vs. some guys who have multiple cabs, and never require any assistance beyond occasionally having someone accept a shipment of servers for them.
 
JamesCWilson said:
Web Hosts should never be afraid to charge as much as they feel they need to, and if your service is of a high enough quality, customers will keep coming back to you, even if you may have fewer of them, than the lower priced hosts would.
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Although I'm pretty much satisfied with my host, I have couple of issues with them. Nevertheless, I pay them 7.95$ a month and I would be willing to pay even more for their service.

JamesCWilson, you are right, completely.
 
Many hosts out there have good plans and all for the prices like lets say a $5.45 plan for like 40Disk and 400Bandwidth (this ant real) And there support is really really bad.


Meaning you could get a good plan but you might not get the support your looking for..
 
IkY0294 said:
Many hosts out there have good plans and all for the prices like lets say a $5.45 plan for like 40Disk and 400Bandwidth (this ant real) And there support is really really bad.

Meaning you could get a good plan but you might not get the support your looking for..
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That's always a risk, but the price of the plan isn't a guarantee that you'll receive either good or bad service. :)
 
It all depends on the host's target market. Who they are selling to. You can't make everyone happy.

From the standpoint of the consumer, I would personally not spend more than $5 for a small business or personal site. There are many hosts who offer decent service and price, you just have to search for them.
 
I agree. I think that many big hosting companies are playing the price game and are just getting lower and lower in price. That only attracts those who are not always so serious in web hosting, and usually are never long term clients. so revenue wise, you're going to have to get a lot of customers to make any kind of profit.
 
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