Web Hosting Articles

  Home arrow Web Hosting Articles arrow Page 4 - 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 
Support 
 USERNAME
 
 PASSWORD
 
 
  >>> SIGN UP!  
  Lost Password? 
WEB HOSTING ARTICLES

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
    2007-01-10

    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 
      ADD THIS ARTICLE TO:
      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
     
     

    SEARCH WEB HOSTERS

    TOOLS YOU CAN USE

    advertisement

    Loss Leaders Risky Gamble for Small Web Hosts - Why Loss Leaders are Risky


    (Page 4 of 4 )

    I’ve hinted at some of the reasons why loss leaders are risky for a small web hosting company, particularly the kind of loss leaders that larger web hosts can afford to offer. Let’s take a closer look at some of the problems a small web host may experience when it tries to emulate the big boys in this area.

    What will happen if you offer a year of free web hosting as a loss leader and experience the kind of growth in your customer base that you only dream about? Well, that dream can turn into a nightmare pretty quickly. More customers means more customer support calls, and if you don’t have the staff to respond, your disgruntled customers will complain – loudly, and to anyone who will listen, not just your staff. DreamHost may have fallen prey to that very problem, if the web site dreamhost-sucks.com is any indication. In that case, your loss leader will seriously backfire, attracting the kind of attention you don’t want.

    Also, as noted above, you may not really want the kind of customers that would be attracted by loss leaders. Branaman has observed that loss leaders “attract the wrong type of audience.” You don’t want to have a “base of customers that are not loyal to the services or interested in additional services, therefore making the overall business unprofitable.”

    Looking at the web hosting industry as a whole, loss leaders as a marketing strategy may be doing more harm than good. While they force web hosts to increase their efficiency, they also create expectations of unnaturally low prices in web hosting customers, commoditizing the market. It may not be too harmful to offer domain names as loss leaders, but before you offer free web hosting as a loss leader, take a close look at your business and figure out whether the customers you gain (and the income you lose) will be worth it.


    DISCLAIMER: The content provided in this article is not warranted or guaranteed by Developer Shed, Inc. The content provided is intended for entertainment and/or educational purposes in order to introduce to the reader key ideas, concepts, and/or product reviews. As such it is incumbent upon the reader to employ real-world tactics for security and implementation of best practices. We are not liable for any negative consequences that may result from implementing any information covered in our articles or tutorials. If this is a hardware review, it is not recommended to open and/or modify your hardware.

    WEB HOSTING ARTICLES ARTICLES

    - 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

     




    © 2003-2017 by Developer Shed. All rights reserved. DS Cluster - Follow our Sitemap