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Thread: Shared pricing?

  1. #1
    Join Date
    Jan 2004
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    Boise, ID
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    2,453

    Shared pricing?

    We have been going good for about 7 months now. We have a good reputation, stability, and good support.

    That being said, I was reviewing a variety of sites and noticed our pricing is under par to what others charge.

    Now, I would never affect my current customers in a pricing change, but I have been thinking of changing the prices I charge new customers and doing an across the board $5.00 per month increase.

    I would like some opinions here.

    Thanks,

  2. #2
    Join Date
    Jan 2003
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    singapore
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    yes you should, 1G/20G for 4.95? it's way far too low.

  3. #3
    Join Date
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    Well, our pricing structure currently is based on Server Specifications/Cost to create a profit (not much but a profit) if we had to fill a box with clients that used everything we gave them.

    What I am looking at though is how we compare to our competition, then I read all this about "you get what you pay for" and wondering if we aren't losing clients due to such a low price.

    I take great pride in making sure every client is made happy. I work with my support people to make sure we response rapidly and with answers. We have spent hours making sure our servers are right, etc...

    I don't want to lose clients because of the price being to low, but the other way around applies also, so I'm not sure what to do.

    Thanks,

  4. #4
    Join Date
    Mar 2004
    Location
    Indonesia
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    Thumbs up

    I know some famous hosting that has a low price but still have a great support and I am still with one of them now.

    Just recalculate your future cost with maximum clients to give them your best support. Some low quality company drop their prices to get so many clients untill they realise that they have to much clients to handle. And their income not high enough to employing the support staffs.

    If you think you still provide the best support then just go for it!
    And you'll be the top list in my hosting company I should look for.


    "You get what you paid for", careful, that's the powerful weapon of high price company to fight the low price company.
    I know many famous high price company that has poor clients support. Just name it and search in WHT you'll get so many complain to so many high price companies.

  5. #5
    Greetings Larry:

    “Well, our pricing structure currently is based on Server Specifications/Cost”

    One good thing is your honesty and being forthright about your structure.

    While only my opinion, the bad thing is this strategy is what 14,000 or more hosting providers are doing; and is often the strategy that is used which promotes business failure or being stuck without the ability to grow.

    You probably know this (at least by now) that pricing should include all costs rather than just the server cost and how many clients you think might fit on a box.

    In any event, there should be no problem with your increasing your price for new customers; and you may even want to test the waters with existing clients by calling a few to see if they would mind paying the increase.

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

  6. #6
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    We actually do include the costs of admin and support into this. To me a "Server Cost" is "hardware, software, support, admin".

    I hadn't thought about that. I do know we recently increased prices on our servers and I have a reseller I had to increase on. I actually thought I would lose him. But he responded, "I don't mind if you increase prices as long as you let me know so I can change my prices. I am with you because of the technical support". That is what prompted these thoughts.

    Thanks,

  7. #7
    make sure you let your current clients, or current prospects even, know that you will be increasing your prices weeks before you do so that they would have the chance to increase their allocation or upgrade their accounts before prices increase.

    this would promote goodwill among your clients and maybe they'd even tell their friends/family to avail of the promo period before the price increase takes into effect.

  8. #8
    Join Date
    Apr 2004
    Location
    Phoenix, Arizona
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    151
    First of all the scrolling testimonals are fantastic. If you want to do something no one does, include the DATE. Impress your prospects that it's fresh information - and that you know the difference.

    The other cost not mentioned in this thread is the "cost to acquire new business."

    If you want to combat the "get what you pay for" cliche consider putting trouble ticket data on your front page.
    Something like:

    SUPPORT SNAPSHOT 5/28/04 9:22 am
    13 of our 150 customers opened trouble tickets in the past 7 days. 12 were resolved within 24 hours by our 3 full time support people (Manny, Moe and Jack). 1 requires assistence from a 3rd party vendor and we are actively managing that process.


    In other words, take credit for this with data, front and center:
    " take great pride in making sure every client is made happy. I work with my support people to make sure we response rapidly and with answers. "

    Anyone who did this would demonstrate they are on top of the "back end" That will mitigate the "get what you pay for" reason for not joining better than raising your prices, imo.

    Keep up the good work
    Daniel
    http://www.IwantFUI.com
    If you could host a new kind of content from your old-fashioned web servers
    and make new money from your customers and differentiate your business all at the same time... could you afford not to try? See the new site

  9. #9
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    I definitely like the date idea on the testimonials. Just means I need to build it off a database then so it can be updated regularly.

    As for the support part, i will have to think on that. Need to figure out the best way to integrate something like that.

    Thanks. This thread is really helping.

  10. #10
    Join Date
    May 2004
    Location
    Québec, Canada
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    23
    The idea of warning your clients and/or prospects before the prices increase is a very good one.

    I think about changing host for some time now and been very impressed with your ability to provide excellent support. I would consider paying more for your basic plan but I would like to know when you would raise those prices so I can get in before!

    Actually, I understand your point about maybe loosing potential clients. My current host is working to keep me from going elsewhere and he tried to used the "with prices so low, you shouldn't expect anything good in performances and support..." Actually, your support is miles ahead of everthing he can come up with and I don't think he has machines any better than yours. But for someone who doesn't actually TRY the support, it's pretty logical to think the staff in this department me be lacking.

    You have a nice challenge ahead of you but proving to your potential clients that your support AND network are up to par with other, more expensive, companies is still a better way to go, in my book, than charging your customers just because others do.

  11. #11
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    Actually, current clients wouldn't have a price increase. I wouldn't do that to them.

    As for the price increase, I've recieved a lot of good information here. I'm leaning more towards trying somethings such as the dates and support statistics first.

    Thanks,

  12. #12
    you mean if they upgrade their plans or get bigger allocations they would still be able to avail of the old plan prices?

  13. #13
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    I hadn't really thought about that. I was thinking more in terms of there current plans and what they are currently paying.

    Depending on how things work out with some of the recommendations made here for implentations to avoid price increase it may never become an issue.

    If it does, that is definitely something I will have to take into thought.

    Thank you for bringing that up.

  14. #14
    Join Date
    Mar 2004
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    1,301
    You can keep the current clients on the same prices as long as their contract is due. You can re-develop one of your plans and increase the price on that. Send out a mailer to all your clients informing that you are upgrading your support systems and getting new hardware so to host them better your costs have increased but they can expect a higher quality of network and server uptime and your support team is always at stand by to help them out
    "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

  15. #15
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    May 2004
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    Québec, Canada
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    Unless these are real investment I wouldn't recommand making up stories. Larry is know for his honesty and telling stories may only hurt that reputation.

    Anyway, I think he made up his decision and we can all expect the better out of it.

  16. #16
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    Boise, ID
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    Where did telling stories come from? I'm confused.....

    I know the testimonials on our site are valid. I actually took the time to email each client that said something I wanted to use as a testimonial. It actually worked out well because many of them improved upon the comment I was initially requesting to use.

    I also have a few more that I need to add. We are currently working on adding the date feature into the testimonials.

    The support snapshot I am still trying to figure out the best way to do.

    We use Kayako with Email Piping enabled. I have two problems.

    1. It doesn't report it exactly the way that was recommended here and I like the way shown here rather than just how many, but how many customers as we have some customers that open 50 tickets. I would like people to know that yes, maybe there were 150 tickets, but those were opened by 15 customers.....

    2. With email piping we get spam and also our signup emails into the ticket system. These are not valid tickets so I don't want to report them.

    Any ideas on this would help.

    Thanks,

  17. #17
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    After re-reading I understand what you meant by stories. But actually Yaser would be right in what he said to mail.

    1. We have upgraded our servers to Dual Xeon 2.4's from P4 2.8's. There is a cost increase, but these are also larger servers and can handle more clients. I expect this to offset any possible price increase.

    2. We have added additional support people, but this was an expected cost and already planned for in our current pricing system.

    Thanks,

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