The web hosting industry is extremely competitive, and it is a dog-eat-dog world out there. While it is true that the digital world is growing and there are more websites being added each day, the truth is that infrastructure to run web hosting companies is expensive.
Hosting Companies are Losing Money to Win New Customers
The cost of servers and bandwidth, not to mention the technical expertise needed to support everything can beggar companies that don’t have a large enough user base to support its costs. This means that web hosting companies need to not only retain as many customers as they can, but also grab as large a share of it as possible.
Poaching is the word of the day and most hosting companies slash prices down to the bone in order to entice new users to sign up with them. When it comes to time for renewal, prices usually go up by a significant margin.
Examples – GoDaddy and BlueHost Hosting Renewal Prices
It has long been my thought that many web hosting companies in fact lose money on acquiring customers in this way. The reason for this is not just are they lowering sign up fees significantly, but there is also the cost of users acquisition to consider – advertising, marketing, payments to affiliates, and so on.
There is a reason to this madness though.
Getting a customer on-board is often one of the few ways that a hosting provider can demonstrate its true value to customers. It does this by offering an excellent product and strong support for customers. Hopefully, in this way, customers will stay with them and that is something that I do recommend.
Should You Hop Around for Cheaper Hosting Rates?
Although hopping from host to host for each contract is a way you can potentially save a lot of money – there is always the chance that something breaks in transition. You also might be leaving a host that has been good for you, hopping into a who-knows-what kind of situation.
My advice would be to take advantage of these renewal fees to get out of an existing bad relationship rather than simply for the cost. Then, you can hop until you find the right one that suits your needs. If you ever do find that gem – stick with it!
A good host isn’t easy to find and can mean the difference of success or failure of your site.
Compare Shared Hosting Signup vs Renewal Price
I studied the differences between renewal and signup prices for more than 20 shared hosting services. The data is shown in table below. Renewal price is, on average, 160% more expensive than signup price.
ChicagoVPS, HostMetro, Interserver, NameCheap, and Rose Hosting are the few that do not jack up their prices after first term.
You should check out these renewal rates in detail and consider the long term cost when choosing a web host.
Note – Price data is extracted and checked accurate on December 2019.
