Cheap Hosting & Brand Recognition

Cheap hosting is sometimes frowned upon by those not willing to offer it, and regarded as "too good to be true". While this does have truth to it, it doesn't necessarily consider all the factors which lead the host to offer such a package.

Brand recognition is priceless. It's expensive and difficult to achieve but very sought after. Hosts can boost brand recognition by offering cheap hosting deals for a limited time. Penetrate the market with your cheap pricing and scoop up as many customers as you can - even at a loss.

After the promotion, you will have had a good deal of customers. Those customers may not be making you any money, but give them a good service, and they will spread the word by forum threads, talking to friends etc. They will also be paying for some, maybe even all of your costs at least.

It may also be possible that you will reach capacity and still be operating at a loss. This is completely normal. In such cases, you will need to expand your capacity. It is thus important that you have the funds to support such a model and be able to operate at a loss for small amounts of time. However, if you are at maximum budget already, offering very cheap hosting may not be always ideal. At least do try to break even.

If you have extra services, you can market it to them. For example you can sell them a reseller account, an SSL certificate, website design and whatever else you can do.

It is also important to control the rate at which you receive sign ups. You also need to understand that you will scoop up some customers which will expect the world for the couple of dollars they pay you per month. From experience, I have noticed the higher the price, the less a customer contacts support. But for customers signing up on cheaper packages, they tend to ask for more support. For those of you utilising the InnoHosting end-user support, it won't be something you will need to worry about much, since it will be us handling the support for you. But something to keep in mind for the future.

On a side note. I hope you all enjoyed your holidays and had a very happy new year!

Getting The Price Right - Part 2

I was reading through my original post about pricing strategies. I think with all that text, I still didn't cover everything. So in this article, I would like to cover:

1. Sustainable Pricing
2. Modifying Pricing
3. Cheap Pricing Re-Visited

Sustainable Pricing

When you are a reseller, you may think your costs are limited to the monthly price you pay every month, which is of course true - but then what happens when you reach capacity? Need to upgrade? Need a server?

It's therefore important that the pricing you choose is sustainable to future growth. Consider the expenses of a dedicated server, and then consider the expenses of a 2nd server. Under the current pricing, how many customers will you need? Will the amount of customers per server mean the server will be overloaded?

Always consider future growth and how your pricing will sustain it.

Pricing Modifications

Prices are not set in stone (for new customers anyway). Existing customer won't take a price hike, however that is not to say it is not possible. Nudge prices up ever so slightly, but match that with extra value on the service. Introduce something new which justifies the increase. Give your existing clients the ability to upgrade to the new pricing scheme. If your incentives are good enough, many will be queueing up to pay you more.

Cheap Pricing Revisted

Now cheap pricing isn't the worst thing in the world. If you have enough cash reserves, then cheap pricing can be a good thing. Cheap pricing can be the key to the success of your business - it can also guarantee your business will fail. It is a fragile strategy to adopt, but done correctly, then you could be on the fast lane to success..

So how can your pricing make you successful without making you look cheap? How can you set low prices and still be able to sustain the model?

Check back soon for the next article where I will be talking about cheap pricing and brand awareness :)

EndSupport V3

For our existing customers, you will probably know our EndSupport software has reached version 3 and it was released a couple of months back.

To those who are new and have not seen it, here are some screenshots which demonstrate what EndSupport looks like:

Main View - This is the home page you will see upon logging into EndSupport:


At a quick glance, you are able to see 5x open, closed and on hold tickets. On the left you have announcements, the top you have navigation console and centre you have the main screen.

Ticket List - A view of all tickets for the chosen status (open/closed/on hold)


Ticket View - Viewing a ticket

You are presented with the necessary relevant information such as date, priority, department, email, subject and of course the actual ticket. Above the details is a navigation pane allowing you to perform different functions on the support ticket.

Integration Options - Various options for integrating your website with the EndSupport

The integration offers a vast array of different way you can integrate the software. It features a full API for integrating the site *fully* on your own site to the look and feel you like. It offers the option of just branding the header+footer.

Other options include setting the reply to email address, a signature, company profile and much more.

The features of EndSupport are fully documented.

EndSupport is an in-house developed product by InnoHosting, and is exclusively only available to InnoHosting customers. We provide the support desk free of charge to all InnoHosting customers requesting it.

That's all for this part. I will be gathering some integration demos of our customers so clients can see how easily the EndSupport software can be integrated into their own site.

Getting The Price Right

Reseller's commonly ask us what we think of their hosting prices. It can be difficult getting the right price, but many make the mistake of setting a price so low that it will either deter customers, or make it very difficult to sustain the low prices.

Although tempting, and natural sense to believe the lower the price, the more people will purchase, it does not necessarily work that way.

Of course price is a deciding factor, but it is not the only deciding factor either. There are so many hosts that offer "low cost, affordable" hosting, that it reaches a stage where you have hundreds of hosts offering the exact same thing, at the same low price which non can sustain.

Consider this, say you have enough money to purchase an average affordable car. It's low in price, it's affordable - so why not? But then consider you know that if you save up a little longer, or try your best to budget well, you can go and buy yourself your dream car. Which one will you be more motivated to do? Obviously, you would wait a little longer and buy your dream car. The same philosophy can be applied to webhosting. Setting a higher price but justifying it with extra features will tempt those that can't afford it yet, but know they will soon, to keep your company in mind and probably sign up in the future.

Another motivation for higher prices, is that you can save yourself a lot of time. For example, if you advertise for 4 weeks, and you manage to get 10 customers paying $2 each, that's $20 revenue per month you have generated. Consider online processing fees, that amount will probably reduce to $16 or $17 per month. What if you set your prices higher and targetted the more premium customers? If you set your prices to $5, and manage only 5 customers - that's $25 per month already. If you manage to get 10, that's $50. Not only now are you making more money from less amount of customers, but you are also cutting down on the time you need to spend supporting those customers.

So in summary, don't fall for the trap of setting your prices low thinking it will generate more interest. It won't. Set a high price, justify it with your services and justify it clearly on your website. Show what the customer is getting for his/her money. Over time, feel free to tweak your prices. Even increasing them as necessary.

There is a good demand of reliable webhosts and webhosts that are unique.

Yesterdays DNS Issues

Well, yesterday was an eventful day to say the least. At approx. 9am GMT, a cPanel bug in one of our servers corrupted the DNS zone files. As our DNS works in a cluster, it wasn't too long before the corrupted zone files were synchronised by each server causing all zone files on all servers to be corrupted. The zone files contain information regarding your DNS settings.

By chance, Chris was able to catch this problem early on. This was by sheer luck that a customer was using dedicated IP's for his nameserver (thus not on the cluster anymore) on the same server which had the bug first. While he managed to fix a few hundred files, the other servers had already synchronised and so the problem was spread out across most of our systems.

Chris fought with his eyes to keep them open, but eventually he did need his sleep. He delegated the tasks to fix the problem to our 24x7 staff, and the lucky folks on shift were charged with the duties of going through thousands of zone files, checking the integrity and fixing those that need to be fixed.

Whenever we thought we had just about finished, more corrupted files were found. Not to mention the servers still kept synchronising making the job much harder..

Chris woke up not too long later and went straight back to work on fixing those zone files. He, along with the rest of the team did eventually manage to fix all zone files by isolating a server from the cluster and working on that alone. The rebuilt zone files were then copied over to all other servers, and the isolated server was brought back into the cluster.

This was the first major outage we had experienced due to a problem with our systems. Although we had no plan of action, the experience we have gained over the years with dealing with minor problems had prepared us for such an event. Chris delegated tasks to other staff members, and kept charge of the situation, while I handled things on the front and continued to send out updates by email as I received them.

Despite the extreme work loads staff were under, we still managed to answer all support tickets in under an hour.

For the most part, all customers were very understandable as they know downtime is really not something which has ever been a concern. We have maintained a steady 99.9% uptime throughout the years we have been around. However, we did receive the odd clients which decided they knew what they are talking about and demanded "answers" and an ETA. I did originally give an ETA based on information I had received, however after it be obvious that the issue is more complex than first anticipated, we stopped giving any ETA whatsoever...

One person in particular moaned about the lack of ETA at first and requested a "ball park" figure - so we gave him one. He then asked for another ETA, but this time, we told him we have no ETA. He for some reason decided that we did have an ETA and so demanded it. He failed to comprehend "I have no ETA" really does mean that we have no ETA. After which, he complained why we gave an ETA out in the first place.

But despite that, customers did adhere to our requests. Our forums served their purpose and allowed customers to communicate amongst themselves about the problem. Some pointing out our faults, some praising us - of which we appreciated both :-)

All that said, we did learn something from this experience, and we have already implemented measures to make sure this doesn't happen again. All systems are fully functional, and things are all back to normal :-)

Blog?

Well, I guess it was a matter of time before InnoHosting launched its own blog. Personally, I always rejected the idea - I simply didn't want to copy other companies for the hell of it. But after evaluating the benefits (SEO, informal communication, talking about general things etc.) I think it is a pretty good idea to have a blog..

I will be looking to post some tutorials, communicate our ideas and plans for the forseeable future and just general chit-chat.

But here it is, our company blog. Enjoy :-)