Ever since the hosting industry was born the rate of inflation has been low. Historically speaking today it is considered moderate, hovering around the 4% mark.
Well everyone is complaining so ...how can that be? Most people have either forgotten what it was like 25 years ago, or are just not old enough to really have experienced it. We like McDonalds.
Then those gas prices...news, news, news, blah, blah, blah
Given the current perception of reality all prices have gone up 30% in the past year...well gas did, so that is logical.
TAKE ADVANTAGE OF THE SITUATION. Raise your rates. It is easier to do so today during these high inflation times (4.18%) then when inflation is low (2.5%).
Some reasons to raise your rates today ---- or at least some great reasons and excuses:
- Our electric bill is going up...”energy you know”
- We are investing in alternative energy sources…”everyone has to help”.
- Due to energy prices more people are using the Internet. Demand for Hosting and bandwidth has never been greater…”you are actually a winner”...or.."The world appreciates you."
- We went Green (always use the capital "G") and are passing just a fragment of the cost on to our customers..."Thank you for helping!"
- We are reducing our carbon footprint…”Do you know what carbon credits cost today?”
- Your client is vacationing at Disneyworld...Tickets (no air, hotel, tips or gratuity) for his family of 4 is about $300 day...your increase is peanuts.
Or my favorite..."We have not raised our rates in 5 years".
I usually think that the first of the year is the best time to raise rates. It should be an annual event. But with gas, airfare, luggage surcharges and Budweiser increases - now is the time to jump on board.
After all, AOL just raised rates 20% - they have always understood perception.
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NCC - New Commerce Communications
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Your article about raising rates couldn't have been more timely! I haven't raised our rates in several years while my collo facility has steadily bumped our rack space and bandwidtha few hundred bucks a year. Considering the availability of cheap brownbag hosting, I've always been nervous about losing customers to $4.95 all-the-bandwidth-you-can-eat accounts.
To seperate WebOperations.net from that crowd, we've always offered programmer support and done everything possible to be so service oriented that I'd lost track of just how much having 24/7 that support was costing me.
I think I'll use all of your "reasons" in my next state of the union newsletter and include a bump in fees with the quarterly hosting.
Thanks!
Webby
Michal "Webby" Douglas
CEO - WebOperations.net
www.WebOperations.net
Yes there are times when a rate increase is not prudent. Putting them off however is not a good business move. Your costs go up like everyones, do you deserve a declining margin?