A Niche No Company Is Dominating - Business Hosting
Why is Business Hosting such a great niche?
1. High Profit Margins - Businesses are willing to pay more for better services and dependability. So instead of making $1 profit per cheap hosting client you can make $20 dollars profit per business hosting client. Business owners email me about twice a day with negative reviews of a cheap hosting company complaining that their email or website is down and costing their business a lot of money. These people are willing to pay more but need to be educated to understand that it is worth paying more. Once they understand that they are willing to pay a lot more for dependable email and uptime.
2. Easier Marketing - Marketing hosting to businesses is much easier because you don’t have to achieve the sign up volume that marketing cheap hosting must produce in order to make a profit. It also has more marketing opportunities because you are not competing on price but rather on a service. It is easier to sell and retain customers when you are selling your services and not just a low price.
3. High Demand And High Growth - This is a mega niche, meaning one that is in high demand and will have high growth in the future. Currently there are no large hosting companies dominating this niche and there is a lot of room for small hosting companies to get involved. Every year the number of businesses wanting to get online is increasing and they need web hosting. There is also a lot of additional revenue to be made if you get referral fees for sending them to Google Adwords, Yahoo’s PPC ads, web designers, web programmers, and other related services a business will need as they begin to fully utilize the internet. And once again businesses will be willing to pay a premium for your help so you could handle all their web design needs and all you have to do is charge a 30 to 40 percent premium that that web designer charges. Reseller hosts should focus on this section as this is a nice recurring hosting fee in addition to providing SEO or design services.
What Are Business Hosting Customers Looking For?
In order to know how to market this hosting niche you need to know what business hosting customers want. The three core things a business will want is website uptime, email uptime, and quality service. Why?
1. Uptime - Businesses that are active on the net need their sites to be up, especially if they are selling online or showing clients demos off their site. Downtime costs them business and they will move to another provider if you can’t deliver. You need to put fewer people per server and watch servers very closely to ensure you don’t have much downtime.
2. Email Uptime - You must ensure email is there as it is usually more important than their website. Just yesterday I saw a review where a user had 10 employees checking mail and when that is down their ability to do work was seriously hurt. You need to give your clients redundant mail servers which is not too hard and explain how this works in easy to understand lingo.
3. Quality Service - Business hosting is a service industry and you must reflect that. Any support requests must be handled professionally and phone support is a must. One thing businesses hate is putting in a ticket and getting back an incomplete or unclear answer. I also highly recommend investing in a CRM tool (CRM = Customer Relationship Management Tool) and start getting to know your customers. Check in with them once a month to make sure they are happy and keep tabs on them and anything they want. Good customer management will ensure that your customers stay with you as they upgrade and grow. I know of several stories from hosting company owners who had customers start with $25 dollar a month plans and who are now paying $5,000 a month for 4 to 5 servers.
Those are the three core services but there are lots of smaller niches inside business hosting. By focusing on one of these or offering all of them you can appeal to prospective clients. Plus if you get good at explaining the benefits of SEO or social marketing you can sign a lot of clients up for those services as well as your hosting.
- Hourly Backups (Example)
- Spam Protection - Example at Doreo (MailFoundry)
- iPhone Support (Example at Eleven2)
- BlackBerry Support
- PPC Ad Credits
- SEO Services
- Design Services
- Programming Services
- Social Marketing Services
So How Can I Market Business Hosting?
I think this niche is an easy one to find customers in for several reasons. The biggest reason is that the local market is so untapped, just look at your city and state and how many businesses in those areas need a web host or a better web host. The second reason is that the internet market is so wide open too. There is not hosting company that has yet branded themself as the “business host”. Plus there are plenty of smaller niche areas on the internet where a new business host can pick up 30 to 100 clients a month. Especially as cheap hosting companies are alienating their business customers with their lack of uptime and service.
7 Specific Marketing Ideas For A New Business Host
1. Find Pissed Customers - Sound crazy? Find the customers that are leaving negative reviews of companies based on their uptime or email dependability and contact them. At Web Hosting Unleashed we get about 2 reviews a day from business owners who can’t find dependable hosting and are willing to pay more. They just need someone to explain why they need to pay more for quality service. Start watching popular hosting review sites and emailing the reviewers who leave negative reviews or call them. Or work out something with hosting review sites to give your email and phone number to the people that need help.
2. Give Out A Free PDF On Why To Pay More For Web Hosting - On your website give out a free PDF you have written that clearly explains why cheap hosting is not good for a business or anyone needing quality hosting. Give examples from reviews people have left and show that paying $25 a month for hosting is worth it when the service and uptime are there. Businesses making money off the net will be fine paying a larger fee per month. Plus you can print off this PDF to give out to local businesses.
3. Business Forums - Find forums that business people would visit and use your forum signature to advertise your services in a way that will attract them. We recently posted an article with examples of companies publicly posting their uptime and that would work great in this case. The forums can be for online commerce, drop shipping, web design, or a more specific topic like running pet stores, running book stores, entrepreneurship forums, starting a business forums etc. Pick out a list of these forums and spend a few hours each day posting helpful remarks and so on. Slowly you will build up a name for yourself and attract customers. And if you do your job right those customers will start spreading your name for you in those forums and others they visit.
4. Call or Visit Local Businesses - Just grab a phone book and start calling or stop by and leave them an info packet. Cold calling might not be your strong point but it is a great way to attract business. If you are shy, give out a four page packets about what benefit a website can have for a business and include your info and rates at the end. Even better, pick out 100 companies in your area that don’t have a web site and need one, write a customized packet for each one of them. It will cost a few dollars per packet plus your time but you should get some good sign ups.
5. Newspapers Classifieds - Placing cheap classified ads is a great way to pick up customers from around the United States and can be done easily over the internet. Google has a newspaper ad setup, most newspapers have their submissions online, and it is a cheap and effective way of getting business oriented clients. This method won’t have great ROI but if you can get an ad in the business section it might be a tad better.
6. Focused PPC Advertising - PPC advertising has gotten very expensive for hosting keywords so you need to go after the long tail. Advertising on “business hosting” might cost $5 bucks a click and that is not worth it, so work out a keyword list that focuses on customers you want. Examples would be people searching for hosting and uptime, or hosting and backups, or so on. This will be harder but there is still some room to see this done right.
7. Affiliate Marketing For Business Hosting - I left this till last because a new company couldn’t do this without some funding or until they have enough money coming in. Because business hosting customers pay more and stay longer you can pay affiliates more and thus attract some great links and attention. So start an affiliate program and pay $150 per sign up if your minimum monthly plan is $25 a month. Most cheap hosting companies pay $100 dollars per client and make their money back in 10 to 12 months, you can pay more to affiliates and make your money back quicker. Plus this will really help your SEO effort as links start coming in.
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