^Why the old forum was better.

Useless replies used to occasionally be funny. Now they're just useless.

So, perhaps you have something useful or funny to add, Jamiet99uk?

"Should I offer several options?"

funny how that is a question. i know close to nothing about webhosting, but offering several options is the best choice concerning almost everything.

If I give more options, customers will generally choose whatever is more beneficial to them, fitting their needs as cheaply as possible, therefore paying less money to me.

Of course, there's more incentive to advertise if people can tailor their rewards in their favour, so it might work better. The question is whether that outweighs the disadvantage I mentioned above.

So which options should I offer in your opinion, kasimax?

So ideally, I don't want people to have to spend less money because of their rewards while it's still appealing enough to get me customers, but that's purely theoretical. I have no problem with losing a little bit of income in order to gain a bit more. So what gives a good amount of incentive and costs little income?

i don't know your exact age, but you're still in school, right? so you don't need to make a living out of this. then i would offer as many options as possible.

To give some concrete examples, who would consider getting 5% of the amount spent by the customer you drew to me in credits, to be spent on any of my offers, enough incentive to tell anyone you know who might be interested in hosting a site/moving to a cheaper host about my site?

@kasimax: True, but earning money is kind of the point here. The aim is to earn as much as possible because it never hurts to have some more money and because it would be great to slowly but hopefully steadily build up an income which I keep with minimal effort. Perhaps do more with it later.

Optimizing my profit is 'important' because it helps with all the things I hoped to achieve with this little enterprise:
1. Having fun (optimizing profit and such is quite enjoyable to me, being able to tell people how thriving my own little bussiness is could be fun too)
2. Learning (optimizing profit is obviously a useful skill to learn on it's own and I learn other things by trying to do so)
3. Earning some money (never hurts, steady income without steady workload has extra appeal for me)
4. Building something up which I may or may not expand on later.

Why wouldn't he want to make money off of it if he can?

the question isn't about money or not, the question is more money per client or more options for clients.

Ok steephie, sorry for being cheeky. If I was a potential customer, as long as the service met my minimum requirements, the main thing that would sway my decision would be the price. So, to answer your question, I'd say offering discounts would be the most likely option in terms of attracting sales.

@kasimax: "the question is more money per client or more options for clients"
That's not a question though, merely an option. Here's the actual question: what brings in more money in the end: more money per affiliate client or more options for affiliate clients (hopefully meaning more affiliates)? If potential affiliates are not (interested in becoming) clients, they'll have to be rewarded with money I suppose, but significantly less money than they would otherwise save on my offers perhaps.

To be clear though, I do appreciate you're thinking with me here, but in the end I want the whole affiliate program to be appealing since it's probably going to be the main form of advertising for quite a while, and ideally for a small cost. I'm not just thinking strangers on the internet here FYI, also thinking about classmates potentially spreading the word to earn some extra bucks while helping a classmate for example.

So taking into account what Jamiet99uk said, currently I'm thinking about giving someone say 1% discount per euro spent per month by someone who was referred to my site by them..
The discount would be continuously up to date, so if someone else takes an offer or someone upgrades they'll get a bit more discount and if someone stops paying, the discount goes down.

If someone wants cash rather than discount, perhaps a cent per euro spent on my site because of them.. Now that does sound low while I'm writing it, but I want incentive to choose for discount of course, so that should save potential clients more money. Maybe I need to raise both the discount and cash reward. I'm kind of clueless on what would have enough appeal and cause an optimal profit..

So to give examples for people who have trouble following my brainwaves:

A is a loyal client already. He currently pays €4/month for his hosting package. He uses the affiliate program and brings B to the site. B decides to go with the €3/month package I offer. As a reward, A receives 3% discount meaning A only has to pay 4*0,97=€3,88/month for his hosting package now.

B decides that he doesn't want a site anymore and ends his contract asap, but he does tell C about the company. C decides to go for the €6/month hosting package. As a result, B could get a 6% discount which would save him €0,24 on the package he used to have, but since he doesn't want to have his site hosted anymore, he takes the money reward; he now gets paid 1 cent for every euro spent by the customer he brought to the site, so €0,06/month right now.

Meanwhile, A no longer receives his 3% discount because the guy he brought to the site, B, ended his contract, so now A has to pay €4,00/month again.

Discounts and payments stack, can't get more than 100% discount I suppose.

What do you guys think about this model? Would it be profitable and create the incentive to tell people about my services? Does anyone see a dangerous loophole? I guess I do need to think about what would happen if someone manages to get customers bringing in €100,00/month meaning he would get a 100% discount and therefore be able to get everything for free, but I guess it makes sense to say one package per account, and as long as I don't get packages that cost €100,00 I would still benefit.

Maybe a lower maximum discount is better though, although 100% discount probably isn't going to happen in practice anyway, and if someone does get €100,00/month worth of clients to my company, I'm a happy man either.

Also, no problem Jamie :-)

Kasimax is right, you need to look longer term steephie. You are in customer acquisition mode. You need a base, and once people respond positively to you you can raise prices. Offering more for less at this point is your best hope of acquisition.

@ssorenn: So would you alter/add something to the model outlined above? What other options would I need?

I should note that for now(/the foreseeable future), I expect pretty much all customers will be people I contact personally or people personally contacted by those people I contacted personally. So that means that the amount of clients will probably be quite limited for quite a while, no matter how much I spend on affiliates.
The simple fact is that you don't find my site on the first couple of pages when googling webhost and I don't have the site to compete in normal advertising in general, so I probably have to approach people for now, and through this model hopefully have those people approach other people.

So yeah, getting a good client base is definitely best, but that might just be out of my hands mostly.

I worked for educational software company. We were transitioning from a desktop product to a subscription-based web site while I was there.

Two things I learned:

1) Do not give out your entire product for free, even as a sampler. If you want to entice customers, have a sandbox area where they can register and try things out for free, but they'll eventually have to pay for the privilege.

2) Do not offer steep discounts to customers on the base product, except for quantity purchases. If you offer discounts on the product, it cheapens the value of it and customers will start to expect the lowered price. Offer extra months of service for free instead. That keeps the price always high but rewards customers who want to feel like they're getting a bonus.

Both of these ideas also keep the money flowing rather than cutting into your own income. Implement them as best fits your service.

What Jeff meant to say is that you should be more like playDip than webDip.

I was thinking I could perhaps sell the fact that I'm not using action prices or stuff like that as an advantage. One good price, plain clear, no surprises, no renewals at increased rates without explicit permission etc.
So I was planning to make the affiliates-thing the only way to get discounts. Other than that, just cheap, no discount. I guess free months as a 'standard' bonus is still an option, but I'm not sure.

Also, no setup costs. I guess I should make that pretty clear, could perhaps even call that the 'bonus'.

Also @Jamiet99uk: bo_sox is just funny enough, just so you know :P

all of your opinions are inferior

@JY: Same counts for you as I said to Jamie before: Please add something useful or funny.

@jeffKuta
he's not offering software.He's web hosting. Looking for customers who are not one offs and will continue to be customers. In my opinion, offering services at discounted prices, to acquire customers at this point is the right thing to do. There are alot of people in this space and you need to do whatever it is to get an initial customer base. it's the price of customer acquisition.

just my opinion

If you offer 12 months of service for the price of 9 months, that's effectively a 25% discount, and you can legitimately market it that way. You haven't *actually* lowered the price. What you've done is bought yourself time to prove yourself to the customer. Then after 12 months, you can renegotiate pricing. Sure, there is a lot of competition in the space, but I hope that price isn't the only factor in customer decision-making. If you keep your price reasonable, you can then tout your premium features as differentiators that help justify the pricing. There's no money to be made in the race to the bottom.

Also, buy 9 get 3 free is more appealing and marketable than 25% off. You can say 33% more for free! Giving the customer more works better than charging them less. It sets up positive feedback rather than an adversarial relationship over price.

The one 'discount' I currently have typed out but not uploaded is that I charge 10% more if you pay per month instead of per year (since per year seems safer and less of a hassle in a couple of ways and gives me a more stable view on what's happening if that makes sense) and therefore it's cheaper to pay per year. Sure, I could sell that as a discount rather than not charging more, but I just don't think that's the message I want to bring across.
Package prices start at €3/month without setup costs, that's cheap and honest and it should be clear in roughly 5 seconds on the hosting page that that is not an action price, you know exactly what's coming for what price and for how long, no setup fee hidden somewhere, no automatic renewals at larger rates. Plain and simple. That's my special offer.

And that's what I'm trying to sell. Brutal honesty for a product that needs nothing else because it's good.
Brutal honesty has always been something I believe in and stick to in my life and I firmly believe that it tends to pay off.

So far for my preach. Still open to suggestions and I will consider the things said here.

@ssorenn: What kind of discount would you have in mind? Do you think there's an advantage to discount rather than simply a cheaper price? Should I go cheaper in your opinion?

@Jeff Kuta: Wouldn't simply reducing the price by 25% without calling it a discount actually differentiate me from the competition?

It might just be me, but a discount suggests to me that the price is temporarily low and will probably increase again soon. I'd be more inclined to go with something that is permanently low when we're talking about an ongoing service with renewals if things go as planned.

The main focus of this thread is the affiliate model though. What do you guys think of this model? Appealing enough? Any dangerous flaws spotted which can be abused or something?

Isn't web hosting really cheap nowadays ...... also with so much free web-hosting do private individuals pay a lot for a web presence?
With companies I understand but for individuals the smart ones already get free web hosting surely.....

I guess maybe it is more for companies since individuals rarely need a site and it is quite cheap, but I don't really see a problem there. I know that I'm not going to make a fortune with webhosting. My costs are really low so that helps..
I want to get as much profit as possible sure, but even if it just covers the costs of keeping my own site online I'm fine with that, because that would mean that anything I earn with webdesign is pure profit while I do have a web presence, which I may very well be using for other things soon enough anyway, so I want to keep the website for sure.

Still, I might make a small monthly/yearly profit, which is fun and a long-term income, however small, which I can probably increase slowly.
And I guess it could be handy if I can offer a bit more than just webdesign which is also achieved this way. I can now offer a more complete package if that makes sense.

Really though, the hosting is happening anyway, so unless someone thinks the prices should go down or has a new argument for why I should call something a discount rather than just cheap or has some other suggestions to increase profit for example, I'd like to focus on the affiliates-model.

You may want to try advertising on business forums rather than here, just an idea...

True but I think that will not exactly be the most efficient way to spend my time on this right now, especially since I haven't had the time to fully work out my site yet because I've been busy with designing for clients and school and, well, life. It's definitely something I'll do when I've got nothing better to do, but for now I think the time is better spent working out details and updating info on both the Dutch and English version of the site, then improving some design. Maybe make a French version at some point too.

This wasn't meant as advertising to be clear, but you may be referring to a while ago.
For the record though, most people showing interest right now are webdippers, the other people are personally contacted by me. I didn't expect to get clients from webdip but that worked out quite well, probably by coincidence. It hasn't been a secret but I haven't really gotten the word out very well IRL, at school for example. I imagine that various people would be interested for various reasons.

With people I know personally or online, I have an edge. On a business forum, I'm just another guy offering webhosting for a few euro's.

So yeah, I think I should probably bet on the edge of familiarity from people I know or am in contact with, since there's little that would make you pick me on business forums I think. Without being annoying about it of course, but I can handle that :-)

Advertising on business forums can't hurt so I will probably do so when I can't think of something better to do.

No thoughts on the affiliates-model? Does it sound about right? Is it missing an option? Do the numbers need to be higher to convince people to actually spread the word for me?

Incidentally, I was looking at the visitors statistics and there's some weird things in there. For example, in the top 30 of 73 referrers, a Russian porn site is number 4 (amount of hits). I can't imagine that that site has a link to my site, so I'm wondering what the definition of referrer is in this case.. Maybe which sites were visited before someone went to my site.
Another funky thing is that the top 4 countries are:
1. network (.net)
2. commercial (.com)
3. Ukraine
4. The Netherlands

.net and .com makes sense because of webdip and facebook, but Ukraine?
Netherlands behind Ukraine seems very odd.
Exactly one hit from a webdip profile, probably mine I guess.

Funny stuff.

Shameless bump. I'd like at least one thought on my affiliates-model..