Hi,

Many here have mentioned that hosting customers who are mainly interested in how cheap your hosting plans are:

1) quickly drop you for someone cheaper quite readily;

2) often require more support than the less price consious customers out there for some reason (why?);

3) often are difficult or impossible to please because no matter how much you give or do for them, they always want more for less.

So, what would you have to price your hosting plans at per month to avoid the "bottom feeders" who are quick to jump ship for a cheaper host and are generally less desirable than those customers not as price consious?

What are you thoughts on this (i.e. avoiding the bottom feeders) as a business strategy?

Anything else you could mention on the demographics or characteristics of the "bottome feeder" class of hosting customers?

What sort of marketing/advertising venue attracts them?

And what percentage of the marketplace do they make up?


Thanks!!

Louis

Usually these people who you describe are the ones that use the least resources, so maybe it is a tradeoff...

The answer to your question is simple. Those who don't know, think that the cheapest is best. These can be people new to the internet, people who don't feel they should pay to use your servers (but realise free is evil in hosting), etc.

So, when they have no respect for the companies who provide the service, and no knowledge of anything really, why shouldn't they hop around?

They don't care about support. They care about complaining, getting the most for the least and doing what they want (and hopefully making money at it).

These are the "bottom feeders". The "low priced hosting" customers, are those who simply want cheap hosting. They can actually be incredibly loyal. They will often have personal, poetry, etc sites and simply want "something simple" that they can trust and forget about.

It seems like you are talking about the first group. This group exists in every industry. It's a fact of life. It's equally a fact of life that any company that tries to truly cater to this group will fail.

I know of no company in any industry that catered to the "degenerate" that survived. "Rock bottom pricing" is one thing, however there still needs to be a solid business model. Wal-Mart did the Rock Bottom Pricing thing, but they redefined the way business operated as well.

Hi Jeremy (and everyone else),

What I'm talking about are the sorts of folks who are overly concerned with price -- and will readily close their account with their current provider to move their site to a cheaper host offering more for less.

The folks who may give lip service to other factors like good service and uptime or whatever, but who decide primarily on low price. The sort of folks who will always feel "cheated" no matter what you charge if some 12 year old running a linux box off a cable modem is offering hosting for less.

I really am curious what percentage of the hosting market these folks make up. Anyone want to give an estimate?

Contrast these I-want-it-mega-cheap folks with people who want hosting and realize they can't have unlimited everything for little of nothing every month -- and choose a host that charges a modest but fair price, rather than the lowest price, and is thus likely to be around long term, so they just "settle in" and are happy.

What's the rate where you get these folks and avoid the bottom feeders at the same time?

Many have posted here that the I-want-it-mega-cheap folks often resurface when their new found better deal host goes belly up or sinks to undesirable service levels...but without learning their lessons, as they are back looking for whomever promises them the most for the least.

For the I-want-it-cheap folks, you can never have prices low enough to be a good deal when somebody else has a lower price, so why bother trying?

I figure price high enough that they will not be interested and avoid the churn and hassles of dealing with them. Let them get on the merry go round of host who try and compete by being the cheapest, only to go out of business in a short while.

I would rather do business with customers who want fair value for fair value rather than everything for nothing.

So what's the monthly rate at which these bottom feeders are not interested, yet the desirable folks are not put off?


Please share your thoughts on these issues -- and vote!


Thanks,

Louis

Also, feel free to post the amount of space and bandwidth that would go along with the price per month you vote that would not be of interest to the bottom feeders, yet would be a good deal for the desirable customers wanting a modest but fair price.


Thanks,

Louis

I'd say $9.95 per month, but it really depends on how much disk space and data transfer you're offering. Most of the I-want-it-mega-cheap customers are looking for $9.95 per year, not $3.95 per month. Some of the I-want-it-cheap-focused customers only want it cheap because they won't use more than a few kilobytes of disk space and data transfer for their personal web page, but it's hard to tell who wants everything for nothing and who just wants very little for the right price unless you get to know them.

$9.95 per month plans

This is going to be fun for Chicken as it's hard to answer without promoting your own stuff - as this is a case of personal experience more than anything...

We run at $7.95 for 50 meg and go up from there. To date in over 2 years of hosting we're had the pleasure of experiencing very little churn due to customers disappearing to a cheaper host. I don't think it's got a lot to do with pricing in our case though. Our clients seem to not be of the 'ilk' that go hopping around. Mainly small business, some personal pages of people new to the net, family sites etc. All pretty stable, middle income or better, good people.

So to answer the question, around $8-10 or so, but with a rider on that saying that the overall image of your service may pay a part as well...

Greg Moore

I'd rather host 150 accounts at $9.95 per month than 500 at $4.95!

Hi Greg,

You mentioned:

"So to answer the question, around $8-10 or so, but with a rider on that saying that the overall image of your service may pay a part as well..."

Could you clarify what you meant by "the overall image of your service may play a part as well" please...and/or maybe give an example?

Thanks for sharing...andyone else with an opinion on this issue please chime in!


Thanks,

Louis

wrong forum :confused:

Anything under $10 is almost not worth hosting unless you have 20,000 clients.

The lowest price people should use is $10, its a good price..

I'd like to charge $20 per month, but the market doesnt' allow me that anymore :)

Originally posted by mrbling

I'd like to charge $20 per month, but the market doesnt' allow me that anymore :)

Sure it does, we have a ton of clients well above the $10. We have a lot of clients paying $20, $35 and even $65. These are the more experienced that not only pay more but also never contact us for support, ever. Its like the best of both worlds, experienced web goers are willing to pay more for quality.

Originally posted by Jag


Sure it does, we have a ton of clients well above the $10. We have a lot of clients paying $20, $35 and even $65. These are the more experienced that not only pay more but also never contact us for support, ever. Its like the best of both worlds, experienced web goers are willing to pay more for quality.


Yep I agree , but I think alot of the host that cater to these large resource accounts for pennies a mth profit are just as guilty.

I Just look in the request forum everyday and laugh , I see host played out like fiddles everyday cause they want a couple crumbs of bread. You see it everyday people asking for outrageous amount of resources and 99% of the time even if people say there's no way you will get that for that price , guess what they get it for there price and most the time cheaper.

that's just my 2 cents and I am sure someone will flame me

Originally posted by phantasywork
I Just look in the request forum everyday and laugh , I see host played out like fiddles everyday cause they want a couple crumbs of bread.

I check down there once in a while. I'll see someone looking for hosting at a reasonable price, then see what they're offered by others, and just not post an offer. Considering the lack of names down there I'm pretty sure a lot of other people feel the same way.

If those guys can build a business at those rates more power to them though.

Greg Moore

Thanks everyone for posting and voting what you think on this issue. I really appreciate it!


I am somewhat surprised by the number of votes for $3.95 and $4.95. Would have thought that not to be high enough.

Also interesting how the voting was pretty spread out up to $10.95, then sparse till $15.95.

I was very surprised to see how many votes were cast so widely over the entire $3.95 to $8.95 range; pretty spread out.


Very interesting vote spread.


Thanks again and take care,

Louis