As some of you know, we’re currently offering hosting at $0.98/month through DomainingServers.com and the promotion will end on June 30. Several domainers emailed me after seeing the banner on the top right side of DomainingTips.com and asked me how I can offer such low prices. The concept is simple and can be described using just two words:

Customer Acquisition

Simply put, here’s the situation you’re facing as a hosting business owner. Let’s start with some positive aspects of the hosting industry:

• every webmaster needs hosting
• every webmaster will always need hosting
• if you provide quality services, customers might become loyal – my company is also offering article writing services through Articles.biz (all of the writers are from the US), banner design services through Banners.biz, logo design services through Logos.biz, WP theme and template design services through Themes.biz, escrow services through MiniEscrow.com and last but not least, managed as well as unmanaged dedicated servers through UnmanagedHosting.com – as you can see, it’s in my best interest to turn you guys into loyal customers because if I managed to do that, I will ultimately make more money in the long run by generating win-win situations

On the other hand though, here is one negative aspect that needs to be taken into consideration: there’s a LOT of competition in the hosting industry. As a result:

Customer Acquisition Costs Are Insanely High

Did you know that you can get $100+ by selling a $4 or $5 per month hosting plan as an affiliate? Well, you can and not just from one company. LOTS of companies are paying $100+ per client, customer acquisition costs are insane these days and that’s why I’m not even touching AdWords (for example).

Now in my case, there are two possible solutions which can make me stand out:

1) Spend gazillions of dollars on AdWords and other traffic sources

2) Offer deals you can’t say no to and let word of mouth do its thing

I chose the second option and there you have it:

Hosting at $0.98/Month

I can’t compete with the big dogs (yet) when it comes to advertising budgets but what I can do is this: instead of charging $4, $5 or whatever per month like everyone else, I sell hosting at $0.98/month (here’s the link again, click on it and you’ll be taken to the $0.98/month promo page – as mentioned previously, the offer will expire on June 30).

I don’t have an affiliate program and keep advertising expenses to the minimum for one simple reason: because that way, I can afford to spend more money on quality servers (I don’t want to brag but few companies out there use servers like ours: 8 physical cores through our Dual Quad Core Xeon setup, 32 GB RAM and 8 15k rpm SAS HDDs RAID 10 for both speed and redundancy) and offer hosting on the cheap 🙂

All in all, here’s the message I want to get across through this post: as a business owner, keeping it simple is sometimes the smartest approach. Most important hosting companies are huge corporations, so they have impressive costs to deal with (the usual corporate ladder), which makes it impossible for them to offer deals such as our $0.98/month one. On the other hand, we have the flexibility it takes to pull it off and at the end of the day, it’s win-win all the way!