Web Hosting Articles

  Home arrow Web Hosting Articles arrow Page 3 - Loss Leaders Risky Gamble for Small We...
Web Hosting Articles  
Web Hosting FAQs  
Web Hosting How-Tos  
Web Hosting News  
Web Hosting Reviews  
Web Hosting Security  
Weekly Newsletter 
Developer Updates  
Free Website Content 
 RSS  Articles
 RSS  Forums
 RSS  All Feeds
Write For Us 
Contact Us 
Site Map 
Privacy Policy 
  >>> SIGN UP!  
  Lost Password? 

Loss Leaders Risky Gamble for Small Web Hosts
By: Terri Wells
  • Search For More Articles!
  • Disclaimer
  • Author Terms
  • Rating: 5 stars5 stars5 stars5 stars5 stars / 3

    Table of Contents:
  • Loss Leaders Risky Gamble for Small Web Hosts
  • Web Hosting as Loss Leader
  • Why Web Hosting Companies Use Loss Leaders
  • Why Loss Leaders are Risky

  • Rate this Article: Poor Best 
      Del.ici.ous Digg
      Blink Simpy
      Google Spurl
      Y! MyWeb Furl
    Email Me Similar Content When Posted
    Add Developer Shed Article Feed To Your Site
    Email Article To Friend
    Print Version Of Article
    PDF Version Of Article




    Loss Leaders Risky Gamble for Small Web Hosts - Why Web Hosting Companies Use Loss Leaders

    (Page 3 of 4 )

    Why would a web hosting company, or indeed any company, use a loss leader campaign? There are a number of reasons. Mainly, loss leader campaigns are used when the company is trying to achieve something that it canít do simply from selling its product at the usual price. Loss leaders capture customer attention; what a company hopes to do with that attention varies.

    Perhaps the most obvious thing to do with that attention is attract more customers. ďHosting companies use loss leaders to grow the customer base exponentially, with the ultimate goal being to up-sell these customers to more profitable business,Ē notes Barbara Branaman, vice president and general manager of the hosting unit at XO Communications. Thatís a good thing for large companies to do if they can handle the explosive increase in their customer base, but if youíre a small company, your customer service will probably suffer under such an onslaught.

    Web hosting companies also use the attention generated by loss leaders to help them break into markets where their brand is not very prominent (or practically non-existent). Thatís why 1&1 Internet offered such a dramatic loss leader when it entered the U.S. web hosting market. That kind of promotion was bound to generate buzz and raise the companyís profile.

    A third reason web hosting companies might want to use loss leaders to get attention should be familiar to everyone in the field: the cutthroat competition. Everybody is trying to offer the lowest prices to attract customers who arenít afraid to shop around and switch hosts to find the best possible deal. Itís worth keeping in mind that the customers attracted by loss leaders are just as likely to leave as soon as they find a better deal. Once your prices go up after that first year or promotion period, theyíll switch to the next company that offers them a loss leader. Sure, there is some effort involved in changing web hosts, but itís not as much effort as, for example, trying to move an entire apartmentís worth of furniture and personal effects (to say nothing of 50+ boxes of books!).

    More Web Hosting Articles Articles
    More By Terri Wells


    - Top Wordpress Plugins for SEO
    - Top Drupal Evaluation and Rating Modules
    - Free Network Monitoring Programs for Max Per...
    - E-store Hosting: Free Options for Beginners
    - Dropbox: The Ultimate File-Sharing and Synci...
    - Reviewing the Best Free Web Hosting Sites
    - Businesses Turn to Reseller Web Hosting for ...
    - Multiple Data Center Hosting
    - Web Hosting Goes Green
    - Web Hosting Technology Overview
    - Collaborate: An Examination of Tools for Gro...
    - Social Networking Security
    - Domain Names 101
    - Top Software to Help Manage Your Websites
    - The Evolution of Phishing

    Developer Shed Affiliates


    © 2003-2019 by Developer Shed. All rights reserved. DS Cluster - Follow our Sitemap