Care To Share?

[medfordite]

I see several people here who appear to be doing well with their hosting business. 

 

I have had limited success with some social media but not a lot.  Been toying with Adwords but not fully invested in that yet.  (Karma thing - I block ads routinely when surfing on sites).  

 

Without going into specifics (unless you want to), what avenues are you using for advertisements?

 

Google Adwords, Social Networks, print media?

 

[Bit Bayou]

Bit Bayou isn't really a "website hosting" company in the usual sense, although we do host websites! We're more in the general sense of "web hosting" as part of a Software As A Service package.

 

As part of our offerings, we set up and manage Internal (Employee) Portals for business clients so that they can be more efficient and cut costs on some operating expenses.

 

As such, we've discovered that local word of mouth seems to be very effective when you offer great service.

[Michael]

I get customers for hosting from Webhostingtalk.

 

I get customers for licensecart from Webhostingtalk, Blesta, InterWorx and Google.

[Sitrus]

Right now I'm using eBay haha, but I'm looking to expand as a local authority and also on forums like WebHostingTalk, DigitalPoint, etc.. don't really see much point in using adwords because the competition with huge budgets will just eat me up

[Paul]

My recommendation is to start local. Friends, family, local businesses. Treat them well and they will tell other people. Do not underestimate word of mouth. You won't see results overnight, but you're building a lasting business, right? People like to do business with those they feel like they can trust, and people trust their friends advice far more than a Google ad (Don't advertise on Google).

[xison]

To veer off on a tangent related to Pauls advice about building a lasting business, and people's trust.

One peice ot advice I wish someone told me when I started out: Incorporate.

Full blown Incorporation, none of this LLC crap. We don't even have them where I live. People (and small businesses) see it as a level of commitment. Depending on local laws, you cannot simply walk away from doing business. You'll be more invested as a corporation and people put trust in that for longevity.

[Ken]

My recommendation is to start local. Friends, family, local businesses. Treat them well and they will tell other people. Do not underestimate word of mouth. You won't see results overnight, but you're building a lasting business, right? People like to do business with those they feel like they can trust, and people trust their friends advice far more than a Google ad (Don't advertise on Google).

 

Best advice yet.

 

You want clients who are going to price match you with every dirty cheap host out there and will drop you the second they find something else?  Go with a pubic or national marketing campaign where you're going to invest lots of money in a very saturated market. But that racket is typically only successful for big explosive startups with big money backed by investors and front men with evangelical qualities. They also push out a lot of media which also require big money.

 

If you're a DIY, small, practical then I'd be going after quality over quantity.  I grew up around entrepreneurs and repeat, referral and word of mouth business were not only more profitable net-net but the most loyal. You conversion rates are somewhere above 80% as opposed to less than 3% (an optimistic number) in the national campaign spectrum.

 

There will come a time when wide marketing campaigns become effective (usually for brand recognition purposes) for your business.

[Ken]

To veer off on a tangent related to Pauls advice about building a lasting business, and people's trust.

One peice ot advice I wish someone told me when I started out: Incorporate.

Full blown Incorporation, none of this LLC crap. We don't even have them where I live. People (and small businesses) see it as a level of commitment. Depending on local laws, you cannot simply walk away from doing business. You'll be more invested as a corporation and people put trust in that for longevity.

 

I've owned both and disagree.  Whether we were LLC or S-Corp made no difference in consumer confidence, at all.  It never came up.  And me as a consumer never cared one way or the other.

 

LLC or S-Corp.  Both pass through taxation.  Both filed with SoS.  One allows share holders the other has managing members.  Not even sure how this applies.

[Paul]

I've owned both and disagree.  Whether we were LLC or S-Corp made no difference in consumer confidence, at all.  It never came up.  And me as a consumer never cared one way or the other.

 

LLC or S-Corp.  Both pass through taxation.  Both filed with SoS.  One allows share holders the other has managing members.  Not even sure how this applies.

 

We have had a similar experience. We operated as a sole proprietorship for years before incorporating and it was never an issue, customers never brought it up except to ask for W-9's and issue 1099's.

 

Running a sole-prop in CA can be the absolute best option for a small business. We're incorporated in California and have to pay $800/yr, every year to the state, not counting taxes on profit. That's the cost of admittance, and many small businesses can't afford it.

 

There are lots of reasons why a business may want to be a sole-prop, LLC, S-Corp, or C-Corp. My suggestion is that anyone starting a new business should do some research, understand the different legal entities and make a decision that is in their best interest. What is best for one person isn't necessarily best for another, but if you understand your options you can make a better decision.

[Sitrus]

Completely agree with some of whats being said here, tapping into the local market is fundamental and generally much easier to become an authority and build trust through word of mouth too!

 

To be honest I don't believe incorporating a limited company is essential at all, as long as customer service remains consistent then this shouldn't make a difference to your clients, after all its only a status thing (and more paperwork) unless you need to be protected from being personally liable.. but for now being a sole trader will do me fine.

 

Also, do any of you think it would be worth me printing out some business cards and posting around on ad boards around the city? Or would this just be a waste of time/money... any thoughts on this would be appreciated 

[Ken]

Also, do any of you think it would be worth me printing out some business cards and posting around on ad boards around the city? Or would this just be a waste of time/money... any thoughts on this would be appreciated 

 

I can't speak on that about the hosting industry but in the past I've done it for local computer/network service.  Again you're in that under 5% range which is great in that line of work because the profit margins are bigger than hosting. I find that the business card thing is most effective when you're shaking someone's hand. I've always been a slight hermit and not really go to social events unless they sounded what I considered fun. Now days I force myself to go to almost everything I get invited to, unless there's a clear sign of no potential, and it's rare that I don't get asked for my business card.

The only caveat is it does involve being social and not being a wall flower. Something I had to train myself to do.

The open bar helps.  

[xison]

I guess as with everything, YMMV.

I live in southern Saskatchewan, Canada.

Because I'm dealing web application development, Incorporating makes my business stand out in a sea of "web designers" in my local area.

My potential customers are looking for longevity. They dont want someone who is going to build it and leave them stranded with no support thereafter or hold their domains hostage.

[Ken]

My potential customers are looking for longevity.

 

It's probably agreed among everyone that their potential customers are looking for this.

 

Here in The States there is very little difference in how you file an LLC or a Corp.  The filing is actually only a tiny fragment of the process to do it properly.  You'll spend more money in legal fees preparing Bylaws and Minutes Agreements which the customer does not see and is not required to file with the state. As far as filing the corp that's just an online application and a few hundred bucks.

[medfordite]

I am an introvert by nature which by the same token, one with few people I can call friends to do any word of mouth with which I have covered that base quite well.  Family, on the other hand has no use for web hosting and would tell people they know if they are looking for hosting to go through my service.

 

For the sites I have produced for clients, they are hosted by me and have a backlink at the bottom pointing to my services, but with the traffic which comes from there, not a single order.  I am at a disadvantage in my hosting at the moment and am about to restructure it to be more of a unique hosting service but not until the weekend maybe.   Once I do that, I will be starting to do advertising more.  I have one awesome customer who has referred one client to me which later left my services, but is half way back to me paying for a service that complements his hosting.   The same client that referred is working on referring another client to me.  

 

I do have a deal with every client that basically gives them some money back each month for referrals which has motivated some but not all.  Being small is a pain in the neck sometimes, but nice at the same time.  I am personally wanting to have enough income monthly to pay for my overhead (licensing, hosting fees, etc) and maybe a tad more.   I know I can't compete with the big dogs out there, but I also know with longevity, it can really build trust as well so you know you aren't dealing with a 'fly by night' hosting company that we all hear about on WebHostingTalk. 

[Ken]

I am an introvert by nature which by the same token, one with few people I can call friends to do any word of mouth with which I have covered that base quite well.  Family, on the other hand has no use for web hosting and would tell people they know if they are looking for hosting to go through my service.

 

For the sites I have produced for clients, they are hosted by me and have a backlink at the bottom pointing to my services, but with the traffic which comes from there, not a single order.  I am at a disadvantage in my hosting at the moment and am about to restructure it to be more of a unique hosting service but not until the weekend maybe.   Once I do that, I will be starting to do advertising more.  I have one awesome customer who has referred one client to me which later left my services, but is half way back to me paying for a service that complements his hosting.   The same client that referred is working on referring another client to me.  

 

I do have a deal with every client that basically gives them some money back each month for referrals which has motivated some but not all.  Being small is a pain in the neck sometimes, but nice at the same time.  I am personally wanting to have enough income monthly to pay for my overhead (licensing, hosting fees, etc) and maybe a tad more.   I know I can't compete with the big dogs out there, but I also know with longevity, it can really build trust as well so you know you aren't dealing with a 'fly by night' hosting company that we all hear about on WebHostingTalk. 

 

Word-of-mouth meaning referral business and not limited to friends, family and social gatherings.  One company that recently comes to mind is Rack911.  While they're a service company and not hosting (that I know of) I think it's fair to say that people mostly learn of them by word-of-mouth whether it be on WHT or referral.  But they've also made their name known by becoming, like Sitrus suggested, an authority of their trade.  In particular they've fulfilled a need by securing software that is commonly used among the hosting industry.

 

I can't stress enough the line that the portrayed Bill Gates says in "Pirates of Silicone Valley":  We need people to need us.

Even the best marketing agencies in the world will tell you "I can bring the leads to your door step but it's still up to you to covert the sale". Find something that your prospects need that others don't generally offer and make it a first impression. The fly-by-nighters occur in all industries and it doesn't usually take long to pick them out.

Also I'd recommend attending some conferences if possible.

Hang in there and learn as much as you can along the way. You'll find your groove.  

[strategicmoves]

I've found that social media works when you have a network of like minds around you or put another way, when you're a member of a "social circle" within whatever platforms you use. I've gotten clients via referrals through G+, Twitter and Skype.

 

(Maybe OP could add "referrals" to the poll as one of the ways we get clients) 

 

Interestingly, "word of mouth" sort of covers social media and referrals because it's personal in nature (unlike print media or radio, etc.) and results in certain kinds of paid work more often than other methods. (I'm not a web hosting company but like Ken I offer hosting to some clients as a value-added service.)

 

I have one awesome customer who has referred one client to me . . . I do have a deal with every client that basically gives them some money back each month for referrals . . . 

 

 

Like medfordite, I give a referral fee to clients when their referral moves from opportunity to paying client.