How much should you charge people for web hosting?
This is a question new reseller hosts ask over and over again.
How can I compete with -Insert Company- with that price?
Why would anyone buy my hosting when they can get hosting from -Insert Company- for $X?
This is how I can quickly spot a beginner who has no real business plan in place and someone that thinks if they’re the “cheapest” they’ll get the most business.
I can head over to Web Hosting Talk right now and find the “beginner” web hosts as they’ll be offering some ridiculously low priced deal such as $0.99 for first year of web hosting.
While that may bring some customers, most have no clue what they’re getting into.
Who is your target audience?
If you say, “people that need web hosting” that’s your first problem.
The first thing you need to decide when starting a reseller hosting business is who you’re trying to reach, specifically.
You want to find a niche that’s not too granular, but one that is in need of web hosting, and that will allow your company to grow.
We all know WordPress hosting is a hot area right now, but you have to be a bit more specific. Who uses WordPress and why?
I like to think about local businesses looking for a reliable platform to develop their website on where they can update regularly without having to know HTML, code, etc.
We focus on Resellers
Throughout 2017 we’ve rapidly grown much because of Resellers.
But if you look at our prices we’re by far the cheapest Reseller hosting provider out there. But we’re also one of the fastest growing.
Our competitive advantage isn’t price! There are so many companies that offer reseller web hosting it would be virtually impossible to try and be the cheapest.
Even if we were, that wouldn’t give us a ticket to become the industry leader.
Rather than price, we use customer service, our high speed infrastructure, and our Reseller training as our main competitive advantages.
Setting the right price
Once you know your target audience, you can then determine what a good price point is.
For example, if you’re going to be offering hosting as an add-on to your customers you already develop websites for, you may want to include it in a “monthly maintenance package.”
When I did local web development back in 2007, I always had that “one customer” that would want to tweak colors, pictures, logos, etc. at least once a month. By charging them a monthly maintenance fee you can be very upfront and transparent how many updates this includes.
You may even get as specific as to how many face-to-face meetings this includes. Your time is valuable so you certainly want to manage it accordingly!
Adding hosting to this type of “package” would be the cherry on top allowing you to make the most ROI possible.
I think it’s fair to say, many local businesses would pay upwards of $100+ for a couple site updates, 1 meeting, web hosting, and some basic social media management. Add phone support in for even more!
Don’t guess, test
You may find that you have to alter your price many times until you find your “sweet spot.”
I strategically have spent hours (if not days) when determining our pricing here at Name Hero.
I plan all of our discounts according to how well the company performs at different times of the year and evaluate every single client that signs-up to ensure we’re hitting our target audience accordingly.
There is nothing more valuable though than experience and actually testing to see what works! You can always make changes later!
There is always going to be more companies
In conclusion, price should be a factor in your business, but don’t let it be your competitive advantage.
There is absolutely no shortage in companies online offering web hosting, but there is certainly a shortage in the number of companies that do things “the right way.”
As Ray Kroc put it, “If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.” This is what I live by.
Ryan Gray is the founder and CEO of NameHero, one of the fastest growing independent web hosts in the United States. Ryan has been working online since 1998 and has over two-decades experience in Internet Entrepreneurship.