Why should you promote upgrades

Submitted by Robert MacLean on Thu, 02/01/2007 - 07:52

I enquired with my hosting company (Hetzner) about upgrading the amount of disk space, and only disk space. See I am planning to upload my photo's and that takes space, lots of it and it's the only thing I have come close to using. The bandwidth is great, the amount of email address is ridiculous (I only use 2 and they are both just forwards anyway), and so on. The options available to me are
1) Upgrade, which doubles my disk space
2) Buy 10Mb more for R5 more.

Here is the downside for the upgrade, they are charging me R49 for it (. The logic told to me is that they have to manually do the changes to quota's etc... This for me is horribly flawed because
1) They have this great "award winning" H-Console which did the entire set of my account automatically
2) They don't charge for downgrading. This is really the part that shocks me as I could understand if they only charged for downgrades (penelizing the end user in a way) or charged for both (due to the "manual" work required) but they don't. They seem happier to have people downgrade than upgrade, which in my mind means they will make less money.

Anyway the other funny part of this how story is that if I pay R5 per 10Mb and buy the 100Mb I will end up paying the same amount as if I upgraded, but without the penalty for an upgrade.

I actually think this is a horrible side effect of one of the value propositions that Hetzner likes to tell people: "Stable pricing since 1999". The problem with stable pricing is no one ever goes back and reviews it and applies all those business lessons learnt in the last 8 years, like getting existing customers to spend more money is easier than getting new customers.

Note: This is not a issue about amount of money but rather the logic behind it.