Jealous of expensive hosts.....

[Frosty]

Weirdo question:

How in the world do those expensive hosts (charging over $20/month) like Verio and Interland and FutureQuest get so many customers when someone can get the same quality hosting for only $9.95/month?

I`m jelous of those expensive hosts. How do they manage to get so many signups when someone really can get the EXACT same thing with quality service for much cheaper like say $9.95?
What the heck is their secret?

[Jaiem]

All I can figure is brand name recognition.

[Design R]

Also I think its because they have been established for a long time. They must have been one of the first to offer hosting. And basiclly I guess with their clienst its a case of " If it anit broke, dont fix it" !!! But also customer services does come into it.

[Frosty]

Geez.....i still don`t understand it. Why the heck would someone pay 30 bucks when they can pay ten bucks for the exact same thing. I`m jelous.

[Jason Ellis]

Originally posted by Frosty
How in the world do those expensive hosts (charging over $20/month) like Verio and Interland and FutureQuest get so many customers when someone can get the same quality hosting for only $9.95/month?

Well, Verio and Interland both spend a huge amount of money on advertising. You can't open up a computer-related magazine without seeing a Verio and/or an Interland ad. And in those cases, they get users who just don't know any better. And, incidentally, neither is a particularly good host, in my experience.

As for FutureQuest, that's a very different story. FutureQuest doesn't advertise anywhere. But they provide a superior service. If you've never taken the time to read FutureQuest's customer vBulletin, it's a very interesting read (it's on my must-read-daily list). Their customers are bordering on fanatical about FutureQuest. I've never seen anything like it (and honestly I'm quite envious because although we have a large number of customer referrals and the vast majority of our customers are pleased with our company, I've never had the type of customer reactions to our service that I see on FutureQuest's customer forums. Amazing.).

I`m jelous of those expensive hosts. How do they manage to get so many signups when someone really can get the EXACT same thing with quality service for much cheaper like say $9.95?

I disagree that you can get the exact same thing for a lower price. I know from my own experience that we could never run our company the way we need to run it if all of our customers were paying under $20.

The other difference is that a lot of these companies are focussing on business accounts - and businesses are willing to pay more for better service (or even the appearance of better service). Put it this way - you're driving down the road looking to have dinner, and on one side of the road is a little run-down pizza joint that has a sign outside saying "Prime Rib - $9.95", and on the other side of the road is a neat, tidy, presentable restaurant with a sign that says "Choice Cut Prime Rib Dinner - $19.95" - which would you rather eat at?

Jason

[Jaiem]

Jason,

Good example except when it comes to net business anyone can look like they are a presentable restaurant but are really a run-down pizza joint behind the scenes. You won't know until you eat the meal.

[Frosty]

Yeah, and where the heck do those hosts whose cheapest plan is 20 bucks advertise?

I bet they can`t advertise in directoris like this cause they`d NEVER get any signups when there are many very decent looking hosts right next to you offering the same thing at $9.95/month?

I`m still jelous gosh darn it........

[Jaiem]

I bet they do a lot (if not all) offline marketing and door-to-door corporate sales.

[akashik]

People often look at a higher costs as an investment in stability. By charging more for plans and packages businesses are making sure their bottom line stays in the black. We never went in for 'loss leaders' or super cheap deals when we started out. As a result it was slow starting, but the signups we got were solid, profitable business.

Could we charge Verio's pricing? Doubtful... You can't open a magazine without seeing their ad somewhere. You just need to pick your audience and play right to them. The $5 a year hosts are going to pick up a different strata of customer to Verio, while all of us in the 'middle' will pick up varying types of customer.

We tend to get 18-35 males (70%)
Most have programming knowledge
Most are experienced internet users.
Most register their own domains

That's just an estimate of course on what I know of our customer base through talking to them.

There's a small pocket of people very new to the web, who've found us through others we already host, but for the most part 'newbie' users tend to drift to the unlimited and super cheap hosts.. Verio seems to aim more to small/medium business, with enterprise offerings as well.

I think you'll find companies like Verio don't plan their pricing on a whim, but are very keen on targeting a particular client

Greg Moore

[Frosty]

I think i messed up and made my prices way too low........but now it`s too late. If i raise them i bet i`d loose every single customer and they`d say goodbye to me with four letter words.



I wonder if maybe later on i could raise prices but only for new customers.......but then billing is gonna be double annoying. Maybe i`ll kill this site (not advertise it anymore) and start all over again. I suck!

[Jaiem]

Frosty,

You could raise them for newcustomers.

[Frosty]

Yah, that`s true. I`ll just raise it for the new customers then :)

[Eladesor]

I've always found that there is a certain 'snob' element when buying anything.
Web hosting is no different from any other commercial product - just ask a teenager to have 'perfectly good' jeans (probably made in the same factory) instead of a well known 'branded' version.

Private / personal hosting customers will go for the cheapest price that they can get. Business / Corporate customers don't 'think' that they are getting value for money - even though the service may be exactly the same.
i.e Can you imagine the credabilty 'Universal ... Ltd' would receive if it was known that there services were provided by 'Joe Bloggs under $20 web hosting' ? Even though Joe Bloggs might provide excellent support / value for money. Most Businesses won't touch them! - 'Snob' value.....

It would be interesting to know if anyone has got any statistics on the 'life' span of 'Cheap hosts' compared to 'Average' or above 'average' price hosts?

Personally I would rather negotiate any potential customer rather than loose a sale, but at the end of the day, I prefer a few good paying accounts rather than many cheap ones - just my view.

[akashik]

Originally posted by Eladesor
Personally I would rather negotiate any potential customer rather than loose a sale, but at the end of the day, I prefer a few good paying accounts rather than many cheap ones - just my view.

Agreed. It's fine and good to cut a deal every now and then, but too often or keeping your prices too law and you start to walk that thin line between value for money, and going broke.

I do think there is some merit in paying for a higher priced product (in anything really), and know they'll be around in the future

Greg Moore

[computerclone]

I couldnt help but reply to this one since I was one of those guys making my 100+ dials a day in sales to get new customers for Verio....

1. They have had as much as 100 outbound sales people cold calling potential web hosting customers... Can anybody add..

They have a channel for everybody...The rates your talking about are for retail customers...

As I said I was a sales rep..... Most of my customers were new people to the net... First Timers.. I had to explain that they will also need a hosting account to go with there domain name...Most thought that was it...lol And believe me they used the support....I would get all kinds of calls.. There are alot of reasons why they are expensive..but think about it....Network, Support, Investors....Investors,,,, Investors....Sales.....

Wouldnt you want to get top dollar for your services... You might say I had low self worth....lol I was a slow starter in Sales at Verio..But after I got over whining about how high the price was... I spent more time giving good service and making dam good money...And you know what They do have a pretty good thing going... They arent perfect but who is......

So now that I'm not working for them I am starting my own...I am looking at Verio....and others...for a dedicated server...I learned a whole lot from them and will be happy to share with anybody...



For me I sold