In today’s digital age, having a reliable web hosting service is crucial for businesses of all sizes. Your website is often the first point of contact between you and your potential customers, and a poorly performing website can lead to lost opportunities and revenue. Despite the importance of reliable hosting, many businesses opt for cheap hosting services in an effort to save money. While this may seem like a cost-effective solution in the short term, it can actually end up costing your business in the long run. In this article, we’ll take a closer look at why cheap hosting is a mistake for business websites and provide some examples and references to help you make an informed decision about your web hosting needs.
Let’s be honest with each other. There is nothing wrong about bargain hunting. Haven’t all of us shared with friends or family this one deal for a last minute holiday we found, that turned out to be amazing. Or the happiness we feel when we go to a supermarket to find our favourite bar of chocolate is now on a buy-one-get-one-free offer. There is absolutely nothing wrong with bargains. However we should clarify – in this article I won’t be focusing on hosting deals you can find during a Black Friday / Cyber Monday event sale. In this article I will focus on those absolutely cheap deals that sound too good to be true – they most likely are. To put this in more perspective for you, anything that is less than £10 per month whilst offering a fully fledged hosting package most likely will fall into this category… So let me explain why…
First of all, there are places where you can setup a website completely free. But… well, it isn’t free. At least, it’s not free if you want your website to be fully-functioning. In those cases, you need extras. Those extras will get you up and running, and they usually are how those companies offering “free” hosting make their money. A few examples of such extras can be: a domain name, your time, design and themes, hosting limitations and many many more… Does your cheap hosting company share what’s really included in that £5 per month package? Have you taken your time and actually read the fine print, terms and conditions etc? A very very common item here is unlimited bandwidth or disk space – this does not exist because it’s simply not possible. I’ll expand on why further down in this article. But first – security…
I. Security Concerns
One of the most significant concerns with using a cheap hosting service for your business website is security. Cheap hosting services often cut corners when it comes to security, leaving websites vulnerable to hacking and cyber attacks. With the rise in cybercrime, it’s crucial for businesses to have strong security measures in place to protect their website and sensitive data. Unfortunately, cheap hosting providers don’t always offer these measures.
If a website does fall victim to a cyber attack, the consequences can be severe. A security breach can result in lost data, website downtime, and damage to a business’s reputation. According to a study by the National Cyber Security Alliance, 60% of small businesses that experience a cyber attack go out of business within six months [source: National Cyber Security Alliance]. This statistic highlights the importance of investing in a reliable hosting service with strong security measures to prevent such incidents from occurring.
A reliable hosting service should offer a range of security features, such as regular security updates, malware scanning, and firewall protection. These features can help to safeguard a website and prevent attacks from occurring. Furthermore, a reputable hosting service will have trained professionals on hand to quickly respond to any security issues that do arise, helping to minimize the impact on a business.
Opting for cheap hosting services may seem like a cost-effective solution for your business website, but it can have significant long-term consequences. By investing in a reliable hosting service with robust security measures, businesses can protect their website, data, and reputation from the dangers of cybercrime. So before making the decision, please don’t be scared and ask how the business you’re about to trust with keeping your website protects your website, data and reputation.
II. Poor Performance
Cheap hosting services may not have the necessary resources to handle high traffic volume and complex website functionality. This can result in slow page loading times, poor user experience, and even website crashes. In addition, consistent poor website performance negatively impacts search engine optimisation (SEO) efforts, as search engines like Google take into account website speed and performance when ranking websites in their search results.
According to a study by Google, 53% of mobile users will abandon a website that takes longer than 3 seconds to load. This means that slow page loading times can lead to a significant loss of potential customers. In addition, website crashes can result in lost revenue and damage to a business’s reputation.
Furthermore, slow website speed can also have a negative impact on SEO. Google has stated that website speed is a ranking factor for mobile searches, and that faster-loading websites are more likely to rank higher in search results. A slow website can also result in a higher bounce rate, which can further damage SEO efforts [source: moz.com].
Poor website performance can have negative consequences for a business’s online presence. Therefore, it should be important for businesses to invest in reliable and high-quality hosting services to ensure optimal website performance and user experience.
III. Lack of Support
Have you ever been on the phone to a company, to end up in a what seemed to be a never-ending loop of call centre employees who only told you information that contradicted itself, what others have told you or what you knew, only to then be passed onto someone else who either couldn’t help or would simply transfer you yet again? Now put yourself in that situation again, but this time add in the pressure of this situation: You are about to land your biggest client ever, and they just called you because your website is down again, so they can’t fill out a form or place an order. First of all, it’s obviously great when you never have to reach out to anyone, and in an ideal world that would be it. However we all know we don’t live in an ideal world, and accidents or mistakes happen. To give you an example, let me tell you a little story…
John decided to invest into a brand new website for his business. He has spent many months getting it perfected, working with us on ensuring every little detail was spot on before his go-live date. John has also worked with his printers, created leaflets, posters, even paid for radio adverts to be played weeks before his online shop went live. This was a very large scale project, that had to go perfectly – the cost of reprinting all of those materials in case of a delay would be into tens of thousands!
Everything was ready for going live on the day. We made special arrangements with John that we would turn on the new website at 12pm on the 1st of June, set all the wheels in motion and simply had to wait for our automation to work. It all went perfectly, the website went live as intended and everything was great! Too great! As John has always been with this one hosting company ever since he started his business, never having any issues in the past, he wanted to continue their relationship and keep the new website hosted with them. However what John hasn’t tested was their support.
When the company provisioned John’s new hosting package ready for the new website, they didn’t take into the consideration how much John’s business has grown over the years and that with all of the marketing efforts that John put into his new website launch the amount of traffic reaching the server would be a lot more than this server has ever seen. So that company ended up putting John on what’s called shared hosting, where John was sharing a server with several other websites of other clients of the hosting company. When John’s website went live, it ended up completely filling up the shared server, suddenly stopping not just John’s website, but 50 other businesses too. This was a terrible start for John – his dream was slowly shattering as he kept reading Facebook comments saying “the website says it’s not working”.
First thing John did, was he tried to reach out to the support team of his company. He started to search for their phone number, as this was an emergency, only to discover that they don’t even offer one. The only way to reach out to them was via email. So John quickly typed up an email to them, and pressed send. Only to receive an automated reply about 30 seconds later that basically stated:
“Thank you for reaching out. We aim to respond to your queries within 3-5 working days.” John was crying. So much money spent, all in vain! Fortunately, he remembered about Borders Websites, picked up the phone and gave us a call.
Within 15 minutes we had a copy of John’s website that we have taken earlier in the morning up on a cloud server that handled all of the visitors, John was also no longer sharing the server with any other businesses, meaning that no one else’s websites would affect John. Because even though it was only John who had a lot of traffic show up that day, there probably were at least 50 other businesses who’s websites went down that day and who also reached out to their support. How soon do you think John received a reply? 4 days later…
Put yourself into John’s shoes for a second. Can your business afford to lose it’s website, emails or any other aspect of its online presence for 3-5 business days?
Cheap hosting services often lack adequate technical support for businesses, leaving them to handle any issues or errors on their own. This can be a significant problem for businesses with limited technical expertise or those that rely on their websites to generate revenue. When issues arise, the business may experience prolonged downtime and lost revenue, and there is no one available to assist them. In contrast, reliable hosting services often have dedicated support teams readily available to assist businesses with any technical issues they encounter. This can include timely resolution of issues, proactive monitoring and maintenance, and expert advice on how to optimize website performance. And this all boils down to this next point:
IV. Hidden Costs
Why is that you may ask… Well let me tell you… Being in the hosting industry for over 10 years, I am more than happy to share with you that the average cost of goods sold for a typical hosting company is around 30% (actual cost of servers at a data centre). This math, leaves around 70% of each pound to pay for all other business expenses, like paying staff etc. If the company is paying taxes, and trying to grow (which they better be!) then those will account for around 20% for taxes, and 10% for marketing business. So removing the cost of goods sold, marketing, taxes leaves us with around 40 pence of each pound the company brings to pay salaries of staff and cover all other expenses.
The numbers don’t lie
Let’s break these down even further… Assuming you went with cheap WordPress hosting and you’re paying them £10 per month (£120 per year), you will be told by their marketing department that they are the best on the market, have amazing 24/7 support, and experience to deal with any problems. So you are expecting them to be like any other companies you ever dealt with in your personal life. We all know that calling British Telecoms(BT), Sky or EE is not that amazing of an experience, but with enough persistence when a problem has occurred they will get the issue fixed. The difference is however that you’re not paying any of these large companies I mentioned £10 per month – you’re paying them a lot more for the service they offer (even internet access at home is more than £10 per month). At the same time, their support agents can offer help at around £25-30k per year salary, as they do not require an IT systems administrator to manage the problems users report. So how do you think a server can have a professional internet access 24/7 for less than what you pay for your own home broadband? There must obviously be cutbacks somewhere…
Looking at the numbers, if the hosting company is charging you £10 per month, and as of May 2023 Glassdoor is reporting an average salary of a system administrator to be £45k per year, how many customers are needed to cover the salary of just this one administrator? The answer – it’s not 375 as you may think. 375 x £120 = £45k. But this assumes that the company has no expenses or cost of goods sold. But remember our prior maths? Accounting for all typical expenses, a typical hosting company only has around 40 pence of every pound to account for salaries. So factoring this assumption into our previous math, we now arrive at this result:
£45 000 = C (customers) x £120 x £0.40
£45 000 = 48 x C
C = 937.5
By solving for C (customers) above, we found that the answer is equal to nearly 938 customers. Therefore to afford to hire a system administrator who actually knows what they’re doing, a hosting company needs to have just under a thousand customers. But how can one system administrator fix any technical issues that arise for a thousand customers 24/7? They cannot. And this doesn’t even account for any other business costs like rent, running expenses, paying the founders and directors, other staff costs, systems that help in their everyday jobs. Even simple things like Microsoft Office 365 packages to have Outlook available for that admin to be able to reply to emails costs money.
When you apply this model to looking at £20 per month packages, the math still isn’t in your favour. Even at £50 per month it’s a little better but we’re still not looking that great, with the company now requiring just under 200 customers per each systems administrator. As you can see, until you really get into £100 + per month range, the economics don’t really work out. And trust me, you do not wish to see this math applied to £5 per month hosting packages.
So why do these companies still exist?
The answer is simple but twofold – either they make their buck on upselling 7 million different items and all of the hidden fees, from SSL certificates to domain registrations, with sometimes even forcing adverts onto your websites and collecting the revenue from those. But these quite often don’t fully work out for them, as people using cheap hosting services typically are trying to save money. So this is where the second option comes in – the “churn and burn” tactic. To simplify this, it’s where the business has a model when they charge their clients too little using a bait-and-switch strategy. They know their customer service will be terrible, but they prey on people like John to either never get in touch, or when they do, they know John will get upset. But they accounted in their business model for losing X amount of clients each month and they just focus on replacing those customers they lost.
How does that play out in reality?
These companies simply offer unlimited everything, or just thereabouts. And they let their clients think they have unlimited everything, simply by not showing the limits, and instead throttling (intentionally slowing down) those clients that start using a lot of their resources. Eventually they end up suspending those websites for “exceeding a fair-usage policy” or similar tactics, ultimately killing those websites. This causes the client to leave unhappy, but making the host happy as they can now replace this one client who used a lot of resources with around 10 others websites that get little to no traffic.
V. Reputation Damage
Just as I explained in the John’s story, when a business website experiences downtime or a security breach, it can have a significant impact on its reputation. Customers may lose trust in the brand, and choose to take their business elsewhere.
According to a survey conducted by Dyn, a provider of DNS and email delivery services, 77% of consumers stated they would not purchase from a company that experienced a website outage. Additionally, a study by Kaspersky Lab, an anti-virus software developer, found that 52% of consumers would not use a company’s products or services after a data breach. These numbers show the importance of maintaining a reliable and secure website. On the topic of data breaches, handling the situation well following an incident is usually even more important than protection from such an event occuring. This is because for some businesses, a substantial reputation damage can literally mean make-or-break. Can you imagine an ice-cream van that develops a reputation for giving someone food poisoning? Or a Website hosting company that has a reputation for their websites to be constantly hacked? Would you purchase a service from such a company?
Choosing a cheap hosting service, is like playing with a magnifying glass in the middle of a matchstick factory. Okay, most days the roof protects you from the sun rays, and setting the place on fire. But all that is needed is just one ray of sunshine to cost a business its reputation and future success.
Choosing a cheap hosting service may seem like a cost-effective solution in the short term, but it can ultimately result in more harm than good for a business’s website. From security concerns to poor performance, lack of support, and damage to reputation, there are many potential pitfalls associated with choosing a low-cost hosting provider. It is important for businesses to prioritise reliability, security, and support when selecting a hosting service for their website, even if it means spending a little more upfront. Investing in a high-quality hosting service can ultimately lead to a better user experience, improved search engine optimization, and increased revenue for a business. And keep in mind that a website is never about now – it’s an investment for the future of your business.
At Borders Websites, we understand the importance of reliable hosting for businesses, which is why we are proud to offer our in-house hosting packages starting from just £50+VAT per month. We also provide consultancy services to analyse the needs of your website and offer suggestions on the best approach for hosting. Our staff is always available to discuss your needs further and point you in the right direction. Now, you might be asking yourself – how can Borders Websites afford to provide hosting for £50 + VAT per month when I just stated that you really have to look at £100 + packages to get a good service? Why don’t you reach out – I’ll be happy to explain why we are different than others. Don’t make the mistake of choosing a cheap hosting service that could potentially harm your business. Contact us today to ensure your website is in safe hands.