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Cheap prices vs Hi prices with discount
Hi!
I've seen that there are these two business models around the LEB market: cheap prices (like buyvm for example) with no discount, and more expensive price that will offer a 50% or 25% discount for LEB community.
What do you think is best?
I somehow prefer the low prices as I feel like it's more clear - but would be tempted to think that some people believe that if pseudo normal price is higher it's better quality.
What's your opinion?
Thanks 
Comments
Coupons are a provider's attempt to get someone to buy at full price and therefore make more money.
You could also argue that rebates might mean that the clients base on average pays more which would make me more comfortable with that host. I normally feel much better when I buy a rebated item at a high price store than a 1 € thingy at those cheap shops somewhere simply because I expect the high price store to last longer. At least long enough for my purpose.
Actually isn't BuyVM the discount brand counterpart to Frantech Solutions?
I also wonder why there are the discounts here. Perhaps it generates word of mouth advertising. I know that I have told others and a few sales have resulted from that.
I was also thinking that the customer base here might be a little different that the regular public. Are the support costs of clients form here less?
In marketing "perceived value" is an critical factor. It may seem counter intuitive, but sometimes you can sell more of a product at a higher price. I have to admit that when I purchased my first $15/yr VPS I was not expecting much. I was like "How can anyone do that and stay in business."
Thanks for your answers.
I would think that it's more difficult to sustain a business with really low prices (10/15$/y plans) but that at a low price (2/5$ per month) you might have a bigger userbase.
It would be interesting to know if frantech for example sell a lot of their frantech plans.
From my experience though, cheap providers often offer cheap performance and you have to go to see mid end providers if you want better performance, so the 'you get what you pay for' is somehow true.
But would I be scared if I ordered a cheap VPS and it had very good performances?
Hum...
@bobinfo just check my site and you will see raw performace is not really correlated with the price. You must also take into account things like uptime, SLA, DoS protection, support, etc. In general, the price of the pizza boxes represents less than 25% of what the customer pays.
I wonder if frantech have stock in some moment, I never found stock when tried, just to check :P
The Frantech brand hasn't had stock since like..June of last year when BuyVM opened
Frantech alas was mostly targeted towards a lot of gameserver communities and ended up with quite a bit of fraud (people stealing credit cards of filing disputes 43 days into service, etc). In the end we got tired of offering to those users and rolled with BuyVM.
Francisco
Oh, so now there is just buyvm?
So you really focus on the 'cheap' market?
Great
cough Resonably priced unmanaged market
'Affordable unmanaged VPS'
I hate the word cheap because it means/sounds like something is lacking/missing. At some point Frantech will return, likely as a fully managed offering.
Francisco
Oh so you're going into my market, huh?
I think I've seen Fran say he has no interest in shared hosting. That would be a tough market to break into today anyway.