The Biggest Mistake I Ever Made in Online Marketing

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I was misled for my first few years in online marketing.  Misled so severely that every time I think about it, I want to bang my head against the wall.  It is easily the single biggest mistake I have made yet.  A mistake that has not only lost me thousands of dollars, but led to a lot of headaches along the way.

You see, up until recently, I always hosted my websites with discount web hosting companies.  Bluehost, Host Gator, Siteground, etc.  Everyone recommended them.  Everyone said it was all I needed.  Everyone said that they used them too.



Discount hosting is worthless.  Trying to build a business with discount hosting as a foundation is setting yourself up to fail.  A few reasons why…

  1. Discount hosts use shared hosting.  A term that means nothing to most people.  But those who do understand steer clear at all costs.  With shared hosting, your website shares an IP address with many other websites.  Most people who are actively using shared hosting are up to no good.  When their activity gets noticed, they get flagged.  Blacklisted.  But it doesn’t just affect their website and efforts, anyone else sharing the IP are blacklisted too.  No more e-mails to your readers, no more posting your link on facebook (they will block it); you’re blacklisted too.  This happens way more often than you would imagine.  It’s happened to me several times, and each time it was a nightmare to deal with.  In fact, I hosted on a shared host in the beginning just so I could make a tutorial for migrating sites to WPEngine.  Before sending a single e-mail from my domain, Mailchimp had already flagged my domain as malicious!
  2. Page load times on discount hosts are terribly slow.  Slow page load times make visitors bounce.  Bouncing/frustrated visitors means less sales.  Walmart did a case study on page load times that showed conversion rates dropped exponentially after 3 seconds.  Before I migrated from a discount host to WPEngine, my page load time was 4.5 seconds.  After the migration, with no other changes, my page load time dropped to 1.4 seconds.  More than a 300% improvement!
  3. The security and support are terrible.  Enough said.  With WPEngine, my site is not only harder to hack, but backups are automatically made several times daily.  And when I need help on the technical end, there are WordPress experts available and happy to help, 24/7.  They probably lose money on me as a customer, considering how much money they pay their support reps 🙂

For those of you who want to move your site from discount hosting, I made a video tutorial here.  It was surprisingly fast and easy.  Enjoy!

Why are discount hosts so heavily recommended?

When I started venturing into affiliate marketing, I realized why so many trusted bloggers and authorities in the online marketing space recommended discount hosts, despite all the hassles associated with them.

Web hosting pays big commissions.  Discount hosts charge $4/month to customers, and pay affiliates about $100 for each referral.  These online marketing “authority bloggers” could recommend good web hosting to set their readers up for success, but that wouldn’t be in the blogger’s best interest.

You see, while better hosts pay twice the commission ($200), they cost a few dollars more.  Seriously, good hosting still costs less than $1/day with a provider like WPEngine.  But when you think about the ratio of affiliate commission to customer’s monthly price, discount hosts pay 25-to-1 ($100/$4).  Great hosting pays 7-to-1.

Which leads me to the best decision I ever made in online marketing…

That is, always aligning my success with that of my customers/readers.

There’s a metric in business you are probably familiar with called Customer Lifetime Value (CLV).  Customer Lifetime Value is the amount of profits you can generate on one customer over time (you can also factor in the value of referrals they make to you, which are hugely important).

When you recommend or sell poor quality products and services, customers/readers won’t trust you, won’t come back, and won’t refer friends.  In the case of web hosting, you make $100 on a discount host sale.  Congrats.  The reader’s chances of success just dropped 95%.  Your customer lifetime value is $100, incredibly small compared to what it could have been.

Recommend great hosting, and you might not sell as much at the slightly higher price.  But you will attract more serious, more capable customers.  They will succeed.  They will trust you.  They will take more of your recommendations (including offers with much higher payouts, like advertising where you make a percentage of their spending).  They will refer friends (most powerful marketing channel).

Aligning your success with that of your customer is crucial in any business or industry.  Customer Lifetime Value is so much more important than what you make on one sale.  Your best new customer is an existing customer.  Always serve them well.

When your CLV is high, you can afford to spend much more money acquiring new customers.  And that is how you scale your business aggressively.