Hey folks, I used to run a web hosting company back in 2002-04. I ended up selling out and working for a local company for awhile. Now I'm considering starting up another hosting company.

My question is, can a small company still get new customers to signup online? Back in 2002 I got quite a few customers that signed up online, but then it started trickling off when all of the companies started overselling and giving away their plans for $6.

What about local customers? Anyone having any luck signing up local customers for web hosting?

Any thoughts/ideas would be welcome.

Thanks,
Joe

If you had run a web hosting already, you can see the important of services. We still have many local customers in Vietnam, even our systems are setup in the US. Just plan your new company carefully and do it :)

I think as long as you plan you will do ok. We still get in many local customers mainly in London/Essex and we do not oversell but as [U]gate2vn said services provided that are good and true will also get in business. Its the old word of mouth thing.

Good luck if you go ahead with the hosting business :)

We are new in our market (China) and I can definitely agree that marketing locally is the way to go unless you have deep market for advertising. Do some basic research and you should be able to find a profitable niche to expand from.

When you guys say market locally, what forms of marketing do you mean?

Just plain "word of mouth" type stuff, or do you advertise in your local media?

Regarding marketing, has anyone here had any luck advertising hosting services in their local newspaper?

I think you certainly could! I mean look at what people get away without reselling. Some charge twice as much as the oversellers and manage to offer only say 1gb disk space for the same price. I think people are not just interested in the how much they get, but the quality of what they get. You could offer 1000GB disk space for 3.95 and get hundreds of customers or offer 1GB disk space and good quality for 3.95 and get hundreds of customers that are happy and refer others. Just something to think about.

Many customers new to the game may start with one of these hosts who completely oversell and charge peanuts, but they will eventually get burned, and if their website becomes big enough to make a profit, they will be looking for a more stable host, i think its all about finding your right market, and targeting them specifically.

I'm certain there is still money to be made in this industry, however I think the bargain basement kiddies that were once dragging it down will find it very hard these days to make any cash.

If your serious about the industry and can build a good reputation, have a portfolio of customer sites that you can use as demos, and prove you are serious you will make a fortune. Also, getting your company name out there is your number one goal. While that won't get you instant customers, they will remember your name in the future.

As with most things in life, it's fight for your survival. You have to be better, quicker, smarter than all the competition out there. If you can do that (and still find time to design your sales site, make scripts work, find the financial support and work a normal job full or part time to tide you over) then you will be a great success.

Good luck pal!

In lots of industries, not just hosting, startups and small companies wonder how they can ever compete with the big giant companies that everyone has heard of with multi-million dollar advertising budgets.

The quick answer is indeed to market locally. The big guys don't know your car mechanic - but you do. The next time you get an oil change, ask your mechanic if he has a web site for his business. And so on - word of mouth starts from your own mouth. :)

We've found that as with real estate, hosting is sometimes about "location, location, location".

Now let me shoot myself. I hate that phrase and always have. But in this case, it's applicable. :)

We receive quite a number of inquiries for Oregon / Pacific Northwest hosting from people who want to stay local. They like the idea of hosting with a provider in the same Time Zone as they are. Someone who understands the local culture, the way business is done.

And, they are willing to pay a little more for the service. Sure, we offer very low pricing on the most basic plans, but many people want the add-ons and it's a no-brainer.

To draw in a local focus, geolocation has been a key factor in our SEO. If you try a regional (oregon, portland, etc.) search for hosting in Google, we come up on the first page. This directly ties into active users who want to find a real "localhost" and so have turned to Google as a starting point.

In an industry where competition is everywhere and USPs (unique selling proposition - what makes you different from the next guy) are rare, we've found that geotargeting our message, service, and SEO have all had a significant role in building up our business.

Cheers,

David

Find a niche market and mine it.

You are unlikely to make a breakthrough in the general hosting market as the trend is for there to be fewer larger hosts charging less and less.

We would be out of business if we did not own our own data centre and connectivity because its the only way to keep the costs down.

if you are starting in an almost unexplored niche...you'll find lots of costumers..but today there are so many competitors

I don't compete with hosting prices online anymore. There is more money in selling the complete package to a local business than there is overselling space for pennies.

If you tend to market locally, go door to door. The good ol cold calling system does actually work, and I make great money doing it.

wow, thats big sales promotion door to door bozz :)

There is money to be made here like any other industry , you may just have to work alot harder to get it !

I don't compete with hosting prices online anymore. There is more money in selling the complete package to a local business than there is overselling space for pennies.

If you tend to market locally, go door to door. The good ol cold calling system does actually work, and I make great money doing it.
Selling to local businesses really does work. But you can't do it sitting in front of your computer screen; like Internet54 says, you have to go out and sell them what they need: web sites, not just web hosting. Most, if they're lucky, are using AOL for email and have no knowledge at all about how to get on the web.

You know, i hate it when hosting comapanies are overselling. It makes it hard for the little guys too. Customers dont seem to understand how much work the little guys have to put in just to get 1 customer. Its so hard to compete with companies like hostgator and such.

3rd Rock Hosting: There are still a lot of business, problem is, "little guys" don't want to invest a dollar in thier business, they think that $10 reseller + $20 template will make them money. With somethhing like $2000, a lot of research and really hard work, many "young guys" can get real money.

here is no money in web hosting for newcomers - current market already oversaturated and current leaders/oversellers killing each other for tiny profits.

Be a creative and invent something new - then, you will have a chance for profits ;)