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  1. #1

    When Prices Change, Should Hosts Update Old Customers?

    I have had a reseller account with a host for about a year. At the time, I got a decent deal, but hosting prices since then have dropped rather dramatically.

    My question to you is, if a host changes their prices or adds space/bandwidth to their plans, should old customers be updated?

    You see, the reseller plan being sold on their own website is now better than what they are giving me, because times change and prices change.

    But I'm at the higher rate because I joined earlier, and they seem to be refusing a revaluation.

    What do you think? What can I do about this?

    Thanks!
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  2. #2
    Join Date
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    This is an interesting question and the answer to which may vary from webhost to webhost. I guess some webhosts will say no and may use dedicated servers as an example. When you sign up for a dedicated server and in 12 months time faster servers are released at cheaper prices than your server, do you deserve your server to be upgraded to todays equivalent?

    If your webhost won't upgrade you, then really, your only option is to change webhosts.
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  3. #3
    Join Date
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    Our rates have gone up quite significantly since we first started doing business. Our customers are given the choice to stay with the package they signed up on, our sign up for one of our new packages at current pricing.

    Just because you see some ridiculous offers on WHT, you shouldn't automatically assume that prices have dropped dramatically. Price is not the same as value.
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  4. #4
    Join Date
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    Same, we pass on the increases to customers. Some of our customers are still paying $24.95/year
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  5. #5
    Join Date
    Oct 2003
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    Our clients have their price freezed guarantee. When we increase the pricing they will not be affected.

    But one of our resellers left us then opt to join again, and he's paying more than what he was because we increased our prices
    Cyber Ultra Network - Reliable Budget Web Hosting Provider Since 2003

  6. #6
    Join Date
    Mar 2004
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    South Wales, UK
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    UK law is a little different so my comments may not apply but...

    If you are a customer purchasing a service (hosting) at a fixed price, and then the host dropped their price for the same product, I would expect you to be charged the new lower amount.

    An exception would be if the new price was just a temporary 'offer' to try and attract new trade. However if their new price is permanent then they should charge you the same.

    Likewise if they increased their prices, I would expect you to pay the new higher price - it works both ways.

    EG.
    If you are paying a set price for your electricity/gas bill and the provider dropped their price, would you be happy if they kept charging you the higher price when your neighbours are paying less?

    They may get around it legally but it's not very good for customer relations is it? If they are being difficult I'd ask myself whether I'd want to stay with them or go elsewhere.

  7. #7
    Join Date
    Sep 2003
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    It works both ways:

    If you increase your prices and apply them to existing customers, the chances are, a lot of clients will start looking for a cheaper solution.

    However, if u decrease, customers will be asking to be with the new lower priced plan. Now the hosting company may be in a struggling situation which is why it decreased prices to attract more customers. If existing customers downgrade, then its very bad for the firm if it indeed used the price reductions because of the bad state its in.

    Maybe an alternative approach would be to price freeze, however, when you must change prices, alter the existing clients resources in accordance. However, this can get controversial, so make sure you notify clients very early on before you do.

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  8. #8
    Join Date
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    We just raise our prices at the end of the customers term so at the end of a 6 month term then its affected but not until there term is over. We dont want to change the price the second month of a 12 month term and make them angry. I would rather make less and have them happy. Ive seen lots of people get mad at hosts cause they raised prices the first month in at 12 month term.
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  9. #9
    I guess all the points have been stated already, but why must it be one-sided would you have a problem if the host updated you to the higher priced plan? Of course, after agreeing to the old, you don't want to pay more for the same. So, why should you expect the host to charge you less for the same. You agreed to pay that price once you signed up.
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  10. #10
    I think you account also need to update. It's not a special offer.

  11. #11
    Join Date
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    Lisbon - Portugal - Europ
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    If we have a long term contract with a customer, then the price negotiated on that contract applies during the period of that contract. Usually long term contracts include hosting and other services.

    In the shared hosting market, current prices should apply to all customers. Any changes should affect old customers. I'm considering 1 month contracts. And the customer should be informed several days (I would prefer several weeks!!!) before the price change.
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  12. #12
    Join Date
    Jan 2002
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    We added about 100% more diskspace to all of our plans in early 2003 and all cleints were upgraded to the newer package.

    We may also increase prices a bit down the road and all clients would remain at those prices they signed up for and all add-on and new accounts would be at the newer rate.

    If you think about it then you will realize it would not really be fare or I doubt even legal to offer the newer larger packages to new customers while denying older customers, also I think some people forget that the old customers are the ones who got you to where you are.

  13. #13
    Join Date
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    So in 2020, 2003 clients will be paying $5 per month for hosting... We respect all our customers.
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  14. #14
    Join Date
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    Well in that case if 2002 customers were paying $5 and new customer pay $7 and in 2020 the new(then) customers will be paying $20 then the inital customers will be paying $18.

    The is not much you can do as far as that goes because as with everything prices go up after time but you cannot make a
    'new' package with better options only available to new clients.

  15. #15
    Cell phone companies do this all the time.

    They have 2 or 3 year contracts and if the price goes up or down then it is TOO BAD FOR YOU.

    You must pay $xx to even break the contract so you can re-sign up.

    Or how about your mortgage, for example.

    You sign up for a mortgage at 7% interest and then 2 years later you see the same bank offering 4% interest.

    So do you expect the bank to give you the new 4% interest rate? No. You expect to pay a penalty and then re-finance at the new rate, etc...

    If our customer signs for a 1 year hosting contract, then that is a contract. We do allow them to stop their contract, but they must either pay a 2 month penalty or they must forfeit their payment.

    If they don't want a 1 year contract, then they have the option of going month to month, although at a higher rate.

    We are able to charge a penalty and ENFORCE our TOS because we have a SIGNED contract with the customer for any business greater then a certain amount.

    It is the only way to really run a true business, unless you wish your customer to tell YOU how much THEY want to pay.

  16. #16
    Originally posted by OKIHost
    If you think about it then you will realize it would not really be fare or I doubt even legal to offer the newer larger packages to new customers while denying older customers,
    It is perfectly "fair" and legal as long as you include the terms of the contract in your terms of service and as long as you have a valid contract with the customer. (ie: You need an actual signature, etc....)

    If the customer doesn't like the price they are paying, even though THEY SIGNED the contract 1 year ago... then it is too bad for them. They have to pay. It is how a contract works.

    If you are not willing to enforce your contract, and wish to give away free services in order to keep this customer, then that is a business decision you must make. But why bother having payment terms in the contract in this case if you aren't going to bother enforcing the payment portion of it?

    The key is to be certain you have a valid contract (signature) and that you can provide a high value for your customer so that they don't mind paying the "higher cost".

    If they are so upset about paying an extra $10/month more for the same service, even though THEY signed a contract... then they are not a good customer and we don't want them. We'll send them to the cheaper hosts. Customers like that are just not worth the effort.

  17. #17
    I see how it makes sense in a contract, but in this particular case there is no contract and the account is paid for month-to-month. In fact I would be better off cancelling my account and opening a new one with the same host; but transferring files and settings might be troublesome. It seems rather ridiculous that, considering we are not under a contract, they can't simply change the account to the new plan (same as closing the old account and opening a new one, which I'm sure they would allow).
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  18. #18
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    Tell your host you want the same deal as every one or your looking else where.

  19. #19
    Join Date
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    South Wales, UK
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    If the price is for a years contract then that's the price you pay. At the end of the year when you renew your contract then the host should charge you the new price.

    However if you are paying month to month, then you should get the new deal at the end of that month when you renew. Likewise if the price went up, I would expect the new price to apply.

    With regards to the example futher up on house mortgage, the Halifax tried that here in the UK. Charged a lower rate for new customers. They were overruled and forced to change the same to everyone because the package/product was the same. Even had to refund the customers that were charged the original amount.

    Paul Creedy
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  20. #20
    Originally posted by Sizzly
    I see how it makes sense in a contract, but in this particular case there is no contract and the account is paid for month-to-month.
    Yes, in this case the "contract" is simply month to month. So at the end of the current month, the customer is released from their "contract" and simply starts another one at the new price.

    This is why monthly prices are more expensive.. (well, one of the reasons).. for us. There is no guarantee or "lock in" for the price. If the customer wants to take the risk that prices might increase, then they go monthly. If they want to "lock in" their price, then they go yearly.

    Same concept as a mortgage term. You select 5 year term if you prefer less risk and want consistancy. You select 3 year term if you think rates might go down...

    Or you select variable rate, etc...

  21. #21
    Join Date
    Feb 2004
    Posts
    161
    I say give them the lowest price they've seen posted on your site. At any time. Unless it's for a dedicated server that you only had a limited quantity of or something.

    I think you should do this because it will give them trust in your services. Which can lead to additional sales, and word of mouth about your honest service.

  22. #22
    Originally posted by p[]
    I think you should do this because it will give them trust in your services. Which can lead to additional sales, and word of mouth about your honest service.
    It has nothing to do with trust or honesty.

    If they sign a 1 year contract for a higher amount, then you are still being honest and trustworthy.

    It comes down to how you wish to run your business. Period.

    If you have 10,000 customers and you give ALL OF THEM a lower price by even $1, then will you see a $10,000 return of additional sales as a result?

    If not, then you have just voluntarily thrown out $10,000 of revenue.

    Do you see what I mean?

    Yes, maybe if you only have 100 customers then it is fine to give a new lower price to all of them... because you aren't making much money anyway and it really makes little difference. In this situation you are not really running a business but more of a hobby. (See Indy4's posts about this subject for some good reading.)

    But, if you are running (or trying to run) a serious business and desire to grow to a serious level of customers and revenue then you should try to establish your policies now.

  23. #23
    Join Date
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    Connecticut
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    A digitally signed (input form or email signing) form is legally binding, correct? If so, you should have no problem enforcing anything in your TOS.

  24. #24
    We believe that old customer should be given a price freeze. If the prices increase, old customers should NOT be affected.

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  25. #25
    Originally posted by QualityHost
    We believe that old customer should be given a price freeze.
    For how long? We believe the same thing... but only for the duration of the contract they select. If they choose a yearly contraact then their price is frozen for one year. if they choose a monthly contract, then their price is frozen for one month.

    Originally posted by QualityHost
    If the prices increase, old customers should NOT be affected.
    What happens if YOUR costs increase?

  26. #26
    Join Date
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    Canada
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    I don't think I've ever seen a dedicated provider guarantee a price freeze. What if all dedicated providers turn around and double their server fee next month?

  27. #27
    Originally posted by UniversalGuy
    I don't think I've ever seen a dedicated provider guarantee a price freeze.
    If you do, then be sure NOT to sue them. It is not a sustainable business model.

    What happens if THEIR network provider increases THEIR prices?

    If they aren't allowed to increase the dedicated cost (because you have a price freeze), then they will go out of business because they can't make enough money.

    Simple.

  28. #28
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    mrzippy

    You keep saying a year contract can you show me where the poster said they had a year contract? Maybe I missed it.

    If it is month to month then he is renewing each month and as such should be entitled to the lower price or increased specs if the plan he is on changes.

    What to many host miss is that if you are going to increase specs on a plan increase the price by $1.00 then if current customers want to upgrade great they are paying you a $1.00 a month more and if a 1000 customers do that you have increased your revenue by $1000.00 a month. If you lower prices then decrease the specs. But if you increase the specs and lower prices you are asking for a revolt of current customers and in my opinion being unfair to them.

    After all your current customers are what got your business where it is, why advertise for new ones when it cost less to take care of and retain current ones.
    Last edited by The3bl; 03-04-2004 at 12:15 AM.

  29. #29
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    We have always try to maintain the same price ratio, which we have done for the past year. We do from time to time, increase disk space and bandwidth, and we pass these increases off to our current customers at no charge.
    Linux junkie | steward.io

  30. #30
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    Originally posted by mrzippy
    Cell phone companies do this all the time.

    They have 2 or 3 year contracts and if the price goes up or down then it is TOO BAD FOR YOU.

    You must pay $xx to even break the contract so you can re-sign up.

    Or how about your mortgage, for example.

    You sign up for a mortgage at 7% interest and then 2 years later you see the same bank offering 4% interest.

    So do you expect the bank to give you the new 4% interest rate? No. You expect to pay a penalty and then re-finance at the new rate, etc...

    If our customer signs for a 1 year hosting contract, then that is a contract. We do allow them to stop their contract, but they must either pay a 2 month penalty or they must forfeit their payment.

    If they don't want a 1 year contract, then they have the option of going month to month, although at a higher rate.

    We are able to charge a penalty and ENFORCE our TOS because we have a SIGNED contract with the customer for any business greater then a certain amount.

    It is the only way to really run a true business, unless you wish your customer to tell YOU how much THEY want to pay.
    there you go

    this is the MOST logical post ive read here in a long time
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    eliminate your debt, keep the property you want, most people qualify.
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  31. #31
    Join Date
    Mar 2003
    Location
    VA
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    My opinion has already been voiced here but I still would like to provide my $0.02.

    When you sign up whether it's a month-to-month contract or a yearly contract, you've signed up to a specified plan and that's final.

    - Month-2-Month Clients -
    If prices go up, currect customers can pay so much more and upgrade their plan(s) otherwise they stick with the original contract. If plans get altered and become below their specs, they become notified of the change and can either go along with the downgrade or upgrade to a plan closes to their original contract.

    - Yearly Clients -
    If prices increase they will be notified of the increase and have 2 options. (1) Pay 20% of the yearly cost, cancel the account, sign up again under the new plan. (2) Pay the 20% and be on their way.

  32. #32
    Go by the contract, dude. Once contract ends, clients will always be free to renew contract on a new basis.

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