Webhosting Coupons Drive Prices Down The Tubes; But Do Users Take Bait?
Every major webhosting company out there is working to kick the competition to the curb and win the affection of webmasters. As a result, everyone from GoDaddy to BlueHost and Hostgator is pulling all stops to make sure that anyone else is obliterated. Said companies are using price cuts, discount coupons and even affiliate marketers in order to reach their goal. Commission Junction seems to be the most popular affiliate network for the webhosting services outlined above. Word has it that the average take home is $100 if an affiliate manages to make successful referrals.
A coupon war where prices are tanking
Hosting plans are now selling at below $5. GoDaddy, for example, is pegging its Economy plan at $3.99pm. Another 30% goes off the price because of promo codes.
Hostgator is now charging $3.95 pm for their Hatchling plan, and they argue that their discount coupon will take an extra 60% off the top. The also promise free hosting for the first month.
Domain.com has not been left behind either, offering $3.75 per month on its hosting plans. A further 15%-25% goes off in the annual bill.
BlueHost has not taken the coupon path but has actually reduced the cost of its shared plan from $7.99 to $2.95 pm.
In addition to these price cuts, webhosting companies seem to be throwing in deals like free domains, unlimited space as well a great share of bandwidth.
Math doesn’t add up
If you look closely at the plans webhosting companies are trotting out there, the math simply does not add up. On average, the big companies are selling shared hosting plans for less than $60 a year. This is further cut away by discounts and coupons. Take off affiliate commissions and they are at $40 out of pocket-and that is in the first year of implementation alone. It looks like users will have to stick around for 3 or so years before the webhost breaks even. What these hosts are doing is essentially negative acquisition cost, which refers to a scenario where webhosts have to keep hacking away at prices till they are basically buying the customer to use their services.
Sure, the bigger firms have been around for a bit and have loyal following. It would be safe to say that they can take the heat. Well, how about the small fish who have to keep the books lean and neat? A good idea would be to look at what happened to eHost, who were charging $2.75 for hosting a month. They went with the low price and high affiliate commission model, and it failed. They announced that they close shop to affiliates as of July 2017.
Will users take the bait?
Sadly, no. Researches carried across the UK and US indicate that a whopping 80% of bloggers and webmasters are not going to budge just because some web host charges half of what their current plan offers.
“The reason is simple; businesses and pro bloggers know the need for security and won’t take chances for the sake of a few dollar cut. Also, 80% of the users will never sacrifice the good customer service they get from current hosts for the sake of a coupon code that’s devoid of support efficiency”, said Alex Papaconstantinou, founder of Webhostingology.