Hosting and the sunk cost fallacy

Hosting and the sunk cost fallacy

It’s a story we hear all the time: “I’m really unhappy with my current hosting. The server is slow, and when something breaks I can’t get decent support. I want to move my site to Agathon.”

After conversation about which hosting package is the best fit for the site, the shoe drops: “You guys are great! But I’ve prepaid for my current hosting and have another nine months left. I’ll sign up with you after that.” This could be a polite brush-off, but in our experience, it’s usually sincere regret at being locked into a long-term contract and the idea of “throwing that money away.”

This is known as the Sunk Cost Fallacy, the idea that you can’t walk away from a bad situation because you’ve already paid for it. Wikipedia has this to say about Sunk Cost Fallacy: “Many people have strong misgivings about ‘wasting’ resources… They usually feel they’ve passed the point of no return.”1

Let’s take a step back though. There’s a reason we’re having a conversation in the first place: the current situation has brought things to a breaking point, and it’s impacting traffic and income. Most of our hosting clients generate revenue from their sites. In the poignant words of one client, “[This blog] feeds my kids.” In these situations, the worst choice is to not make a choice, suffering through months of stress, frustration, and diminishing income due to poor site performance and support. Bad hosting can hold back growth and that doesn’t change on its own. It’s better to chalk it up as a learning experience and make a fresh start.

When people do make that hard choice to walk away from a bad web hosting experience, we often see results right away. Sites perform better, visitors come back, and revenue increases more than enough to wipe out any prepaid contract. Most importantly, the bloggers themselves are happier, at ease. They feel relief, not regret. It’s a breath of new life for their “baby.”

Of course, good hosting alone can’t make a site successful. But bad hosting can ruin it. Your site deserves better.

What’s next for your site?

The point of this post is to help identify a common mental trap, not to be a sales pitch. But our Director of Marketing (Hi, Mandi!) would give me a hard time if I didn’t extend the invitation: Are you stuck in a bad hosting situation? Perhaps now is the time for your fresh start. Contact us today for a no-obligation hosting assessment.

Hosting and the sunk cost fallacy

Alan Ritari

Founding Partner and CEO at Agathon
With more than 25 years in the business, Alan’s passionate about defining clear goals for any project we work on, whether for a client or internally, knowing that doing so makes the execution 100x easier.
Alan Ritari

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Footnotes

  1. https://en.wikipedia.org/wiki/Sunk_cost#Loss_aversion_and_the_sunk_cost_fallacy

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