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The 5 Worst Sales In Webhosting Part 2 of 2

This is the second entry in Christian Dawson’s The Five Worst Sales In Webhosting.

 

Sale Type #4: Out of sight, out of mind

I treat new customers better than my existing, loyal ones.

Have you ever been a loyal customer of a company and suddenly noticed them advertising a far superior deal to new customers? How does that make you feel about your purchase?

Banks, cable, and phone providers do this a lot and we see it EVERY DAY in webhosting. Look at the ad above and think about what it says:

“New Customers Get The Best Bundle Prices.”

We’ve all fallen for this at one time or another, and it never stops sucking. Why should a new client be treated like gold when a dedicated one is left to languish? In hosting you see tons of promotions that give new customers special promotions that “double your RAM” or “double your bandwidth” if you sign up right away.

From a business perspective, it can do a lot of damage to your product and your brand. It cheapens your product by revaluing it and ostensibly charges your current clients a “loyalty tax”.

You’re getting something as a new guy they wouldn’t give to a customer who’s been supporting the company for years. How will you feel when YOU are the old customer? Would you rather have a host that spends every day trying to make their whole server farm more robust and powerful — and enjoying the benefits of that investment in infrastructure — or would you rather jump from sign-up deal to sign-up deal, knowing you’re always getting a great price for service at a company that’s clearly spending most of its money acquiring new customers, rather than investing in their business?

Like many of you, I’m ‘value’ conscious. I don’t need the best price, but I do want the best deal. I do want to know that I am not paying too much for too little. And I’d rather not go with a company who has me constantly looking over my shoulder, lest I be left behind.

 

Sale type #5: The Spaghetti Sale

I throw everything at the wall to see what sticks

We really want your business, so what’s it gonna take? Try it for $1? 50% off? How about baseball tickets?

Baseball tickets!?!?

How is that in any way relevant to what I’m looking for?

Anybody who has ever signed up for a sub-$10 a month hosting package knows that this tactic is rampant in hosting. As far as freebies and add-ons go, they throw the proverbial kitchen sink at you. But how much attention do they pay to your needs? How much attention can they realistically pay to you when it’s clear their number one priority is finding the one thing — or the 15 different things — they need to do to just get you in the door?

Ask yourself:  are you buying hosting in order to run a business, or in order to go to the ball game?

It’s easy to become a bit jaded when analyzing these tactics. But there’s some good out there too! Now that we have the negatives out of the way, what is an example of a positive sale? A sale that doesn’t dilute the value of a product, and also doesn’t leave customers old and new out in the dust. I found an example in the most unlikely of places.

 

Sale type #6: The Up and Up

I have confidence in my product and I want to entice you to try it

I’m not defending the often reckless and underhanded marketing that some gyms are famous for. Please don’t mistake this for an endorsement of gym marketing tactics in general.

But, if you ignore the industry baggage, the ad above is actually a great example of what I think the best type of sale or discount is. It’s a temporary discount – something to encourage people to walk through the door and try things out. If you are confident in your product, and you treat your customers well, it’s the best type of sale out there.

We price our product according to what we believe it’s worth. To get to that number, we take a lot of factors into consideration. What physical resources does this product need? What about power and cooling, how much time does this product require of our staff and how much support, on average, does that product require? That’s a gross over-simplification, of course, but by and large we price our products at a rate that we believe is competitive, fair, and sustainable for our business.

When we do run sales here at ServInt, these kinds of enticement discounts are the only kind I completely approve of. Our sales generally discount the first month or two of service, to help ease people into moving in to our hosting service. We understand that transferring can be time consuming and expensive, and you might even need to pay two places for a little while. We try to help when we can. We’ve actually got a promo like that going right now! Contact our sales department for details! ;^)

What our sales don’t do is discount a select group forever just for signing up at the right time. In fact, when we released the Solo Express a few months ago, we had only intended it to be a limited-quantity promotional product. We never thought it would be as successful as it was, so when we launched it along with a $20 off lifetime promo code and things really took off, we were overwhelmed by the response. A server of that caliber at that price point was truly unique and compelling, and so we decided to eliminate the coupon code, drop the price formally (along with other price drops in the Solo Enterprise line), and bring the Solo Express into regular rotation.

We try to treat all customers fairly, that ensure we have happy clients who stay and grow with ServInt.

Ultimately, we have confidence in our products and our price points, knowing what our service is worth as well as what it costs to offer. We know what investments in service, support, stability and reliability are required to offer top-notch service and we aren’t willing to sacrifice that to try to create false ‘bargains’. If things are a little more expensive than our competitor’s temporary “sale” price, you can be sure they’re worth it.

What we make from our products, we reinvest in making them better. It’s that commitment to bettering our products and services that makes us who we are, and it’s why I’m proud to work here.

- Christian

Agree? Disagree? Let us know in the comments, on Facebook, or on Twitter.

Follow Christian on Twitter.

About Christian Dawson

Christian Dawson has been with ServInt since 1998 and has helped it grow into one of the most innovative Cloud providers in the world. As ServInt's COO, he has spearheaded its green initiative, and drives ServInt's efforts in fighting for customer privacy and consumer protections. He does so in part as co-founder and Chairman of the industry trade association, the Internet Infrastructure Coalition (i2Coalition). You can find him on Google+ and Twitter.


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