Common Tricks By Web Hosting Companies To Lure You In To Their Services

By Alex HD

Most web hosting companies use tricks to lure you in to their services. Some of the popular tricks are;

A common tactic is to advertise more than they can deliver

A prime example of this is HostGator. They advertise a rate of $3.96 for their entry level plan. They don’t advertise the fact that they expect you to pay for 36 months at that rate upfront! That is $142.56 out of your credit card when you sign up. However, if you were to take the month to month package, the rate goes up to $7.16 – the big question is, why do they do this ? How does it benefit them to lock in rates for 36 months, and make you pay more ? A couple of reasons;

Firstly, web hosting rates are historically falling – hosting is getting cheaper every year, and more companies are competing for your account, than ever before. Way back in 2003, ie. about 11 years back hostgator charged $9.95 a month for just 500 MB of space, and today their main plan (the 36 month lock in) is $3.96 a month. So, common sense would suggest that 3-4 years down the line, its probably going to be less, while your rate is locked in at 3.96.

Secondly, the loss of opportunity, and advantage of booking revenue in advance is greater for the provider. Think about this — as a web hosting company – if you can spend $10 on advertising to get 1 more user, while maintaining the same fixed infrastructure – why would you not spend the entire money from the sales – to keep getting more users ? Just 1 click on the keyword ‘hosting’ can go up to $31.91 – can you imagine what that is like ? If a hosting company is willing to pay $31.9 for just one click in google on the keyword hosting, what would their profit margin be for potential customers ? If you assume that their conversion rate is 30% (which is very high), they would spend $957 to acquire 30 customers, while those 30 customers would generate 4276.8 in revenue. This is probably the highest advertisement/sales ratio in any industry. This means that the competition is steep! This literally means, that if you pay them $142, they could use that to get $634, which gives the hosting company a huge incentive to lower prices and make you lock in rates for longer times. That way, you’re locked in to the rate – and they get to use your money today, to get more clients. Now, obviously its not a never ending game – because they have limited resources on their servers and at some point they would have to upgrade their systems to accommodate new users. Dishonest companies like manashosting – do not upgrade their systems and end up losing business, or they give you abysmal service by saving on customer service personnel. Here is what a customer of manashosting had to say;

“I am the existing customer of manas hosting since 2010 and I took windows unlimited hosting and 3 domains from them. In 2013 they are started some migration process with extra money and those who don’t want paid migration they are offered free migration but it doesn’t work and now my websites are completely down and facing so much of problem from manashosting.”

Another tactic is to add hidden fees and cross sell.

A prime example of this is the ICANN fees for domain names. Godaddy adds the ICANN fee of $0.18 to the cost of the domain. Not all providers do this. Many providers quote the price of the domain as including all the fees and charges. On their website Godaddy says that the fee is mandatory, but what they don’t tell you is – that the fee can be borne by them, like enom or any other provider. Why do they not tell you this ? So, you get lured in to the price on their website and buy the domain from them. By the time you are at the checkout page, you are already mentally committed to buying it – and would naturally be hesitant from going elsewhere.

Don’t fall prey to gimmicks, buy web hosting from an honest provider. Ask your friends and colleagues who they use. Ask them if they are satisfied. If you google the reviews for any provider, you will get a fairly good idea as to their reputation. Do a little homework before you pay. It helps in the long run.

At Hosting Xtreme we pride ourselves in honest and fair advertisements. We give you what you see. No tricks or scams. We give you the clear and honest truth. Plain and simple web hosting. Check us out at Hosting Xtreme.

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