Using
Direct Marketing in Web Hosting
Using Direct Marketing in Web Hosting
Most Web hosting companies rely on conventional online marketing
techniques to reach their prospects and gain more clients. Advertising
mediums like banners, hosting directory listings and pay-per-click
search (PPC) engine placements are flooded with hosting marketing
messages. Although this has proven to be an effective traffic builder
tool for a lot of hosts, it has not provided them with a high enough
growth rate. This form of online advertising is considered the creation
of the dot com boom/bust era and only reaches potential customers
that are currently online.
There are other mediums that the Web hosting industry needs to
also consider as effective sales and marketing channels. They include
the conventional methods of promoting businesses like print advertising
and direct marketing. Now that hosts are operating their business
the old fashioned way to please Wall Street and their shareholders,
they also need to have a broader marketing strategy in order to
increase their market share.
This is where direct marketing, using tools offered by companies
like Nevention (webhostingprospector.com)and Harte-Hanks (harte-hanks.com),
can become a useful business channel. Most marketers will tell you
that the success of a direct mail or an outbound telemarketing campaign
is dependent on two things: how targeted your potential customer
list is, and how attractive your offer is to recipients. The latter
depends solely on how well Web hosts understand why their current
clients stay loyal to them and keep referring new business.
Should you decide to conduct a direct marketing campaign, finding
a suitable list of potential customers can be tricky. There are
over 10,000 business-to-business lists that reach every type of
company and decision maker in North America. Most of them offer
targeting methods like industry type and company size.
The problem with demographics like these, however, is that they
do not provide Web hosting firms with enough information, as they
do not take into account what those businesses are actually doing
on the Internet. In other words, these lists lack the most important
demographics that Web hosts need - the technical characteristics
of a potential customer's Web site.
Fortunately, recent technology can extract and develop e-business
profiles from Web sites and provide hosts with important information
that allows them to better promote targeted packages to the right
customer base.
Other online features can also identify the size and popularity
of the site, what technologies and scripting languages are being
used in order to measure the complexity of the site, as well as
getting a sense of how well maintained the site is. All of this
and more provide Web hosts with ways to build a customized business
list that corresponds to their technical target market criteria.
Take a hosting company that wants to target businesses for its
high-end hosting package as an example. In the past, it had to rely
on demographics such as the size of the company to try and determine
if it might be a suitable sales lead to approach. However, companies
with over 100 employees do not necessarily spend $100,000 a year
on critical online applications. On the other hand, sometimes smaller
companies with fewer than 10 employees can have 10 racks at a data
center somewhere. In each case, identifying the companies that are
currently using dedicated or managed hosting saves Web hosts time
and money.
Other ways of targeting include identifying companies that have
stretched the limits of their shared hosting packages, and have
therefore become solid prospects for dedicated services. Also, identifying
those e-commerce site that use specific software like Miva also
saves hosts money by pinpointing sites that can be easily transferred
to their licensed e-commerce software.
When establishing a direct marketing campaign, Web hosts should
also carefully consider the source of their data. A lot of hosting
firms still rely on WHOIS data as an information source. Not only
is it illegal to use this data for mass marketing purposes, but
it can also be inaccurate. Research conducted earlier this year
by Netvention found that 35% of the data provided in WHOIS data
was out of date, as companies tend to update their information only
when it is time to renew their domain.
Luckily, advances in data extraction technology have solved this
problem. Netvention's technology, for example, crawls and extracts
key business information (such as company name, address, phone,
fax and contact names) directly from corporate Web sites. Because
the information found on these sites is public, the data is typically
accurate.
Once you have obtained the information required to conduct a direct
marketing campaign, the next step is to determine what medium should
be used to convey your offers. The simple rule of thumb is: if the
total revenue that could be generated from one client on an annual
basis is between $100 to $250 (typically shared or e-commerce hosting),
traditional "snail mail" is recommended. You can also
take advantage of email, but I highly recommend keeping to opt-in
email addresses from reputable vendors such as NetCreations and
not be seduced by the cheap and opt-out kind that is easily attainable.
Direct phone solicitation has proven to be more effective for sales
that will result in more than $250 of revenue a year. We are not
talking about using a simple method of telemarketing, but a more
sophisticated approach: one that will further qualify the prospect
by identifying the right decision maker, who is their current hosting
or colocation provider (although this intelligence too can be obtained
from the e-business profile directly) when their contract expires,
etc.
Following initial contact, a relationship between the account manager
of the hosting firm and the prospect can be developed - even if
they don't immediately purchase services. This method can take months
to materialize, but when the right opportunity presents itself,
such as in the case of Cable & Wireless or Sprint closures,
a hosting company that has proactively developed the right relationship
has a much higher chance of winning the account. Those that simply
react to industry events face an uphill battle, because even when
they get there, they often realize that the window of opportunity
has already been lost.
Web hosting companies should seriously consider incorporating the
old but proven methods of direct marketing to accelerate the growth
of their business. Helpful data is available to hosting companies
at a reasonable cost, and Web hosts should use this to their advantage.
About the Author Tarik Qahawish is the
sales and marketing director at Netvention,
a leader in information extraction technology from the Web. Graduating
from Concordia University in 1993 with a degree in marketing and
international business, Mr. Qahawish began his career as an entrepreneur.
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