Too cheap makes a person look Unreliable and Too expensive scares off new clients. Its not just about price but about Psychology too!!!
Actually what the common preception after the .com burst is that you must be very professional and ' corporate type ' if you have to survive. and most of corporates will never provide something at very thin margin.
I have some really good as well as really bad experiences with cheap hosting companies. Most of them turned out to be scams. The best experience ( pleasent ) i have had was with smarterlinux.com (hostmysite) and they are not cheap but reasonable.
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What's important is what you do with your customers. Support, support, support! You gotta be friendly. I think prople are fed up with rude support staff.
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I will second that
