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  1. #1
    Join Date
    Feb 2004
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    i'll reduce prices...

    i have a plan that cost $12.90 but I'll reduce to $11.90
    (it's not dollars, but doesn't matter)

    I have 2 questions:

    1) should I send an E-Mail to my current clients explaining that and asking if they want to move to the (what I'll call) "new plan"? or should I just don't say anything and, if they find out and request, change it?

    2) i offer option to people pay, for example, yearly... do you think those ppl should be eligible for a refund proporcional to the ammount reduced?
    my oppinion here is that they shouldn't, because they paid yearly to have a 20% discount and to have a guarantee to don't pay more even if the price raise... but not to get refudns if the price reduce

    thanks
    Last edited by Lem0nHead; 05-05-2004 at 10:26 PM.

  2. #2
    Join Date
    Mar 2003
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    this should be dealt with in Web Hosting Forum
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  3. #3
    Join Date
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    This is always a touchy issue. Heres the best way I found to go about it:

    - Create a new plan with whatever pricing you wish, being certain to call it something diffrent and offer diffrent stuff to go with (diffrent quotas or whatever).

    This will differentiate the product enough so that you're not obligated to change existing customers over. Not that you're cheap and dont want you customers to have good prices, just that it saves you the operations hassle of having to deal with it.

    Then:

    - Send a notice to your customers letting them know that you have a new plan available for anyone that wishes to convert.

    This way, you save a lot of time and money in the long run and you're still being fair to your customers.

    Regards.

  4. #4
    Join Date
    Jul 2003
    Location
    Liverpool, England, UK.
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    Just inform all your clients that you will be lowering the price of the plan and you will need to ammend their payments to conform to the new lower price. As it is a lower price, they should only be too happy to oblige
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  5. #5
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    Originally posted by thelinuxguy
    this should be dealt with in Web Hosting Forum
    Maybe he's talking about dedicated servers though?

  6. #6
    Join Date
    Feb 2004
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    Originally posted by DeathNova
    Maybe he's talking about dedicated servers though?
    no
    that was my mistake

    sorry

  7. #7
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    Mar 2004
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    You should have it on your website maybe as a special offer if its for limited time or in the news section if you have one. re: refuding yearly customers, yes i think you should refund the money or maybe give them a month of free hosting.
    "Web Hosting is not just about selling space, it is about facilitating customers needs with your plans and supporting the customer for a long lasting mutually beneficial relationship."- Yaser

  8. #8
    Join Date
    Nov 2002
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    Canada
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    I wouldn't refund yearly customers, they've decided to lock in their rate and pay for a year of hosting. When they come up for renewal then they would be eligable for the cheaper price.

    Just send out a notice to your customers saying that your prices have been lowered slightly and their account will automatically updated at their next billing date.

  9. #9
    Join Date
    May 2003
    Location
    Melbourne, Australia
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    341

    There's another way too

    There's another way to do it also - I've found this much easier.

    Rather than decreasing prices, just increase your plan quotas and bandwidth allocations for the same price - this works fine for me. Means all you have to do is update packages in WHM and all accounts automatically get new plan quota and size - customers love seeing their diskspace go up - only ever had one customer downgrade.

  10. #10
    Greetings Lem0nHead:

    Why do you feel it is necessary to reduce your prices?

    Thank you.
    ---
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  11. #11
    Join Date
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    Originally posted by dynamicnet
    Greetings Lem0nHead:

    Why do you feel it is necessary to reduce your prices?

    Thank you.
    Yeah, that was my first thought, too. Why even bother? Surely if a client is going to pay $11.90, they wouldn't mind paying $12.90...?
    Erica Douglass, Founder, Simpli Hosting, Inc.
    »»» I founded Simpli Hosting, and sold it in 2007 to Silicon Valley Web Hosting after over 6 years in the business.
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  12. #12
    I was wondering the same thing. If you feel it's necessary to give something back to your existing clients, why not just keep the pricing the same and add a new service/feature for them to increase the value of your services to them?

  13. #13
    Join Date
    May 2003
    Location
    Kansas and PEI
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    instead of lowering prices, why not offer more for your current prices?

    We had a special running for a month of double bandwidth/storage and had good success with it, we extended it by a month, then afterwards I just said the heck with it and upgraded all our existing clients that signed up before the special to the double plans for good and made those our current plans.

    Everyone was happy

  14. #14
    Join Date
    Feb 2004
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    because I have a competitor who offer the same thing than me for $11.99 instead $12.90

    and I think most people may prefer having 300 MBs space and 3000 MBs BW for $11.99 with him than, ie, 400 MBs space and 4000 MBs BW for $12.90 with me, just because 90% of my clients that ordered this plan don't use half of the resource they could

    up to now i think the best suggestion would be to create a new plan with different features, but there would come a design problem (i just can't add much plans to the current design of the site, and it wouldn't be necessary to have a plan, ie, with 300 MBs and another with 250 MBs, just to justify the $1)

    my idea now is to lower the price of this plan (i'll change all other plans, increasing 1 or 2 GB or resource, but then it doesn't come to price) and don't tell my current clients..
    no where in my terms of service is said that i must tell current clients that i lowered prices or changed plans...
    but in the other hand i'd have to communicate them if i RAISED the prices...

  15. #15
    Greetings:

    Do you believe it makes sense for you to follow your competitor's lead?

    Do you think it might work if you found ways to be different than your competitor in terms of values you provide?

    If your competitor dropped their price after you dropped yours, then what would you do?

    What will you do when your current customers see your lower prices, and ask for you to provide them the same price or they will go to your competitor?

    If your competitor lowers their price again, and you match or beat their price again, how long could you last if they just kept beating you by lower their price every time you did?

    What will your existing customers think if you keep lowering your price to match a competitor’s price?

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  16. #16
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    Florida
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    I must agree with dynamicnet, lowering the price could also lower the customer's perspective of the value of services that you provide.

    Just my 2 cents worth.

  17. #17
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    Originally posted by dynamicnet
    Greetings:

    Do you believe it makes sense for you to follow your competitor's lead?

    Do you think it might work if you found ways to be different than your competitor in terms of values you provide?

    If your competitor dropped their price after you dropped yours, then what would you do?

    What will you do when your current customers see your lower prices, and ask for you to provide them the same price or they will go to your competitor?

    If your competitor lowers their price again, and you match or beat their price again, how long could you last if they just kept beating you by lower their price every time you did?

    What will your existing customers think if you keep lowering your price to match a competitor�s price?

    Thank you.
    Once again, dynamicnet kicks a** with his post. Heed this man's words; he is wise!

    -Erica
    Erica Douglass, Founder, Simpli Hosting, Inc.
    »»» I founded Simpli Hosting, and sold it in 2007 to Silicon Valley Web Hosting after over 6 years in the business.
    Now I'm blogging at erica.biz!

  18. #18
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    Seattle
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    I think he'd be cooler if he gave advice rather than ask more questions </lame sarcasm>


  19. #19
    Join Date
    Mar 2004
    Posts
    93
    This is good advice. Maybe you should be raising prices to differentiate yourself.

    I mean lets say you have two plans with identical features from two companies. One costs $25 the other $10 a month. Your automatic assumption assuming all other things are equal is that the $25 offers superior service since it costs more. Most people believe (becuase it generaly is true) you get what you pay for.

    So why not raise prices a little so people looking for the cheapest price go to your competitor, but those looking for something a little more reliable in the same category will go with your service. Raise your fees by around $5 to $10, advertise on reliability and support. Don't be suprised if your sales volume actually increases.

    With your current custmers you can either raise fees or better yet grandfather them in at the rate they are paying. They will be happier that they are paying a lower fee for a more expensive service.

    I know it sounds weird but it is true. Take for example my membership with BoxedArt.com. I signed up with them when they were cheap < $30 for a year. They now charge $80 a year. So I was all excited about being able to still stay on at the same rate. In reality the service is pretty much the same as it was, it's just more popular now.

    Sometimes raising your prices can have the opposite effect then you would think. Let your competitors have all the cheap problematic customers while you concentrate on the profitable low maintenance kind who like to pay above market average for services.

    Just my opinion but I think you will be much happier with the results and you can always back track if things go south.

    At the very least your retention rate will probably increase if you grandfather people at the same price they signed up at but increase the cost of the services that they are subscribing to.

  20. #20
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    Wise men give answers in questions do they not?

  21. #21
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    Feb 2004
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    thanks for the advices

    i decided not to lower this plan price, but instead to give more resources... and to create a new $6.90 plan (minimum payment quarterly) with less resources


  22. #22
    Join Date
    Mar 2004
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    You should not follow your competitors or their tactics. Lower prices, discounts leads to perception of lower quality and your customers wont be happy when you raise your prices. Provide stellar support! have great uptime, its not always about price, its what perception people have towards you.
    "Web Hosting is not just about selling space, it is about facilitating customers needs with your plans and supporting the customer for a long lasting mutually beneficial relationship."- Yaser

  23. #23
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    Mar 2004
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    Discounts and reductions only boost sales for a short term, you plan to be in the business for the long-run benefits not short, so sell yourself well through your USP, spend money on good advertising and you will see good signups which add value to your business and when happy holler the message to others.
    "Web Hosting is not just about selling space, it is about facilitating customers needs with your plans and supporting the customer for a long lasting mutually beneficial relationship."- Yaser

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