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  1. #1

    How much does it cost for a successful web hosting company ?

    Hello,

    I wonder,
    How much does it cost for a web hosting company to be come successful, a web hosting company that offer the kind of UNLIMITED Shared plans for beginners just like JustHost and Ipage etc..

    we are looking to build our first 10,000 new customers by the end of this year,
    we have a strong business plan etc.. no worries about this,

    But, how much do you think we need a budget for advertising to archive that kind of results ?

    Best Regards,

  2. #2
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    For 10,000 by the end of the year I would estimate you spending a MINIMUM of 20,000 per month and then if you are lucky you will get maybe a third of that. You are already entering a saturated market where people will undercut your pricing due to mass scale and company's with 100k+ clients.

  3. #3
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    Honestly if you are asking then you are already in trouble.

  4. #4
    No, i'm just asking to support my information so the business plan won't fail and everything work as expected,

  5. #5
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    Your goal is set so high. You have to really gain reputation and get some reviews. Which is hard as customers may not always write reviews and you don't want to force it on them.

  6. #6
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    The best method is to set small goals achieve those and build hosting is spread mainly by word of mouth and ads considering that geeks talk to geeks.

  7. #7
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    Quote Originally Posted by askhostinc View Post
    Hello,

    I wonder,
    How much does it cost for a web hosting company to be come successful, a web hosting company that offer the kind of UNLIMITED Shared plans for beginners just like JustHost and Ipage etc..

    we are looking to build our first 10,000 new customers by the end of this year,
    we have a strong business plan etc.. no worries about this,

    But, how much do you think we need a budget for advertising to archive that kind of results ?

    Best Regards,
    You will need to make sure your company is listed first on all of the fake web host review sites. I'm talking about those "top 10 web host" style web host review sites. You will need to be using affiliate style marketing, so those fake review sites will list you first. You will need to pay more per customer than what the individual customers are worth, but that is what it takes to be listed first on those fake web host review sites.

    As long as your site looks better than the other web hosts listed in the fake top 10 AND you are willing to pay more to those affiliates for top listing, then you should be able to get rapid growth. Do you have a million dollars to invest into this type of affiliate based marketing? If you do, then you can probably meet your rapid growth goals.
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  8. #8
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    Perhaps you should ink in "hire someone with business experience" on your business plan.

  9. #9
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    Quote Originally Posted by askhostinc View Post
    Hello,

    I wonder,
    How much does it cost for a web hosting company to be come successful, a web hosting company that offer the kind of UNLIMITED Shared plans for beginners just like JustHost and Ipage etc..

    we are looking to build our first 10,000 new customers by the end of this year,
    we have a strong business plan etc.. no worries about this,

    But, how much do you think we need a budget for advertising to archive that kind of results ?

    Best Regards,
    Thats really tough to say, unfortunately there really isn't any set number that you can spend that will generate a specific amount of clientele. Before dropping large amount of money on advertising I suggest running some test marketing campaigns (on a small scale) to get a good feel for what advertising avenues work best for you and to see if people are even interested in your services (as you have them listed).
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  10. #10
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    You will need to make sure your company is listed first on all of the fake web host review sites. I'm talking about those "top 10 web host" style web host review sites. You will need to be using affiliate style marketing, so those fake review sites will list you first. You will need to pay more per customer than what the individual customers are worth, but that is what it takes to be listed first on those fake web host review sites.
    Both Justhost and iPage went for some very aggressive marketing, and high commissions (~$100 per sale) coupled with really low priced shared hosting (under $5) was a deal that "top hosts" sites were bound to notice. Of course, if you can get into cj.com, you get access to a good number of super affiliates. Otherwise, even with high a paying affiliate program, it will probably take time for people to find out about it.

    Perhaps you do end up paying more than the referred customer is worth, but there's brand recognition in all that as well, resulting in quite a few "free" customers.

    Do you have a million dollars to invest into this type of affiliate based marketing? If you do, then you can probably meet your rapid growth goals.
    That sounds about right.

  11. #11
    According to me, building first 10,000 new customers by the end of the year is very high goal. As there is too much competition in hosting business. The amount of advertising does not determine the number of customers. In this business customers' satisfaction is most essential. If you got some customers and they are satisfied with your services then their mouth publicity can help you to increase customers number. So, i want to suggest you that advertising amount should not be big matter for you even service quality is more important.

  12. #12
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    What is your average booking value and profit margins? then you can work out your estimated CPA, that will give you your aprox budget for marketing to get 10k customers in 12 months.. ours is around $10, That would be $100,000
    Jon Black

  13. #13
    Unfortunately, You are Wrong,

    ALL of your, You are wrong, You do not know how those CPA Works .
    Do you really believe that JustHost or hostgator would pay up to 150$ for a single customer ?, lol

  14. #14
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    Quote Originally Posted by askhostinc View Post
    Unfortunately, You are Wrong,

    ALL of your, You are wrong, You do not know how those CPA Works .
    Do you really believe that JustHost or hostgator would pay up to 150$ for a single customer ?, lol
    Look's interesting, can you explain to us then?

  15. #15
    Quote Originally Posted by askhostinc View Post
    Unfortunately, You are Wrong,

    ALL of your, You are wrong, You do not know how those CPA Works .
    Do you really believe that JustHost or hostgator would pay up to 150$ for a single customer ?, lol
    From the sound of your attitude, it sounds like you know more than anyone here who is trying to help you. If you think everyone is wrong, then tell us why.

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  16. #16
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    Quote Originally Posted by NoSupportLinuxHostin View Post
    You will need to make sure your company is listed first on all of the fake web host review sites. I'm talking about those "top 10 web host" style web host review sites. You will need to be using affiliate style marketing, so those fake review sites will list you first. You will need to pay more per customer than what the individual customers are worth, but that is what it takes to be listed first on those fake web host review sites.

    As long as your site looks better than the other web hosts listed in the fake top 10 AND you are willing to pay more to those affiliates for top listing, then you should be able to get rapid growth. Do you have a million dollars to invest into this type of affiliate based marketing? If you do, then you can probably meet your rapid growth goals.
    I like this answer. Unfortunately what these people are saying is very true. The market is quite saturated with small hosting companies that can start up very cheap with reseller hosting.

    For instance our company has been in business for over a year, has built a small client base and we now have some server space that is already paid for. So to gain some clients and hopefully get some of those hosting reviews (real as opposed to fake) we've put out a few ads offering hosting at $1.99 a month.

    We've had little interest as you almost can't give away hosting and there are still offers out there for less than that.

    Having a targeted marketing niche is one answer though out lasting (or out spending) the competition may be the only means of survival.
    Last edited by musicman153; 03-30-2011 at 01:07 AM.
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  17. #17
    Quote Originally Posted by MPDon View Post
    From the sound of your attitude, it sounds like you know more than anyone here who is trying to help you. If you think everyone is wrong, then tell us why.
    lol, never mind

  18. #18
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    Do you really believe that JustHost or hostgator would pay up to 150$ for a single customer ?, lol
    Some hosts pay $10 per click from Google Adwords, so I'd say $100 for a secured sale, is not extraordinarily expensive.

    Now, you may consider that hosts trick their affiliates. Some are indeed proven liars. Trying to cheat a company like Commission Junction out of their commission share would be rather risky though.

    Again, the host is not paying for a single customer. There's branding, some SEO, and each customer gained means a number of "free" customers. There's a short term benefit, and a long term benefit.

  19. #19
    Quote Originally Posted by musicman153 View Post
    I like this answer. Unfortunately what these people are saying is very true. The market is quite saturated with small hosting companies that can start up very cheap with reseller hosting.

    For instance our company has been in business for over a year, has built a small client base and we now have some server space that is already paid for. So to gain some clients and hopefully get some of those hosting reviews (real as opposed to fake) we've put out a few ads offering hosting at $1.99 a month.

    We've had little interest as you almost can't give away hosting and there are still offers out there for less than that.

    Having a targeted marketing niche is one answer though out lasting (or out spending) the competition may be the only means of survival.

    Maybe your website will confirm that i'm not wrong ?, i just asked you guys because i wanted to confirm my knowledge , it doesn't hurt does it ?

  20. #20
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    Dude, I've been doing this for just a little under 2 years. I have just reached 2000 customers.

    I don't have a "Strong business plan" but I have my girlfriend. She, good sir is a "One-woman" army in customer service.

    "He with the deepest pockets wins". Plain and simple, you either do it the long way (like most of us have) and BUILD your reputation steadily with customer trust OR spend 1m in 2 months just to get yourself out there and out rank most of the resellers now available .
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  21. #21
    Quote Originally Posted by ldcdc View Post
    Some hosts pay $10 per click from Google Adwords, so I'd say $100 for a secured sale, is not extraordinarily expensive.

    Now, you may consider that hosts trick their affiliates. Some are indeed proven liars. Trying to cheat a company like Commission Junction out of their commission share would be rather risky though.

    Again, the host is not paying for a single customer. There's branding, some SEO, and each customer gained means a number of "free" customers. There's a short term benefit, and a long term benefit.
    yeah, this also make sense, because in anyways the money they spent on the affiliates are already secured by SEO an other ways, but they still do not pay the commissions to all the affiliates that's all,

    however the affiliate program is not so powerful, because for example SEO for the right keywords, is powerful, and the most important in the affiliate programs is to get listed in the TOP 10 Web Hosts.

  22. #22
    men, the important is traffic, targeted traffic, it is your problem how to do it, but your signatures in WHT wont help you, it is the cause why most oft he providers do not make a good number of customers because they are limited to WHT Advertising, in the mean time biggest companies that offer the same just like you and better are putting banner ads and sponsor WHT, do you think this is right ?, do you expect a good conversion rate ?

    Yes, WHT is important, important to build reputation and make good reviews, but to generate customers ? hell no!

  23. #23
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    Well, I don't think anyone suggested forum participation as a fast way to grow. Forum posting doesn't get you rich, I can tell you that.

  24. #24
    Quote Originally Posted by ldcdc View Post
    Well, I don't think anyone suggested forum participation as a fast way to grow. Forum posting doesn't get you rich, I can tell you that.
    that's exactly what i was talking about ,
    i my self use forum for the community not for advertising at all, honestly, i use it to request help if i have any problem or to see what is going on on the market etc...

  25. #25
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    Quote Originally Posted by askhostinc View Post
    Maybe your website will confirm that i'm not wrong ?, i just asked you guys because i wanted to confirm my knowledge , it doesn't hurt does it ?
    No it certainly doesn't hurt and it's really a good question. I think those with more experience than you and I are giving you a reality check.
    Your original question was
    How Does it cost for a successful web hosting company ?
    Well, the short answer would be a lot.

    If you have money to spend on prime time television ads, magazines and other media (other than internet) you might make that 10,000 clients in he first year and turn a profit 2-5 years down the road.

    I personally wish you success.
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  26. #26
    Thanks All for your replies

  27. #27
    Quote Originally Posted by musicman153 View Post
    I personally wish you success.
    Thank You

  28. #28
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    Quote Originally Posted by askhostinc View Post

    ...

    we are looking to build our first 10,000 new customers

    ...

    we have a strong business plan


    But, how much do you think we need a budget ...
    10,000 x cost to acquire 1 new customer in a 10,000 new customers campaign

    That cost you get from your strong business plan.
    Last edited by dotHostel; 03-30-2011 at 07:36 AM.
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  29. #29
    Quote Originally Posted by dotHostel View Post
    10,000 x cost to acquire 1 new customer in a 10,000 new customers campaign

    That cost you get from your strong business plan.
    make Sense

  30. #30
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    At $100 per sale, that's $1 million/year for the customers.

    So expect around $83k/month in advertising.

  31. #31
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    Quote Originally Posted by askhostinc View Post
    Unfortunately, You are Wrong,

    ALL of your, You are wrong, You do not know how those CPA Works .
    Do you really believe that JustHost or hostgator would pay up to 150$ for a single customer ?, lol
    Not only do I believe that, I know it.

  32. #32
    Quote Originally Posted by askhostinc View Post
    men, the important is traffic, targeted traffic, it is your problem how to do it, but your signatures in WHT wont help you, it is the cause why most oft he providers do not make a good number of customers because they are limited to WHT Advertising, in the mean time biggest companies that offer the same just like you and better are putting banner ads and sponsor WHT, do you think this is right ?, do you expect a good conversion rate ?

    Yes, WHT is important, important to build reputation and make good reviews, but to generate customers ? hell no!
    I don't have any personal experience with this, but you would be surprised to know how many clients some hosts get from WHT posts.
    My personal blog -- rubiverse.net

  33. #33
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    Quote Originally Posted by flam316 View Post
    I don't have any personal experience with this, but you would be surprised to know how many clients some hosts get from WHT posts.
    Totally agreed. I came here a few years ago specifically to find high quality hosting. After learning my lesson about cheap prices = short-lived company, I have as a consumer blessed (fh, whi) and still bless several companies (wt, kh, bbq) with my money. The companies' reputations made my decision for me. Sticky threads help too.

  34. #34
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    Do you really believe that JustHost or hostgator would pay up to 150$ for a single customer ?
    Sure they would,
    when I was with hostgator I paid 14.95 a month and used practically no resources. So they were turning a profit in the first year, and I brought several other clients to them before I started hosting.
    Sometimes you've got to look at how much your going to make down the road.
    Last edited by musicman153; 04-02-2011 at 07:29 PM.
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  35. #35
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    Quote Originally Posted by askhostinc View Post
    Do you really believe that JustHost or hostgator would pay up to 150$ for a single customer ?
    Thats exactly what a number of hosts are paying in either advertising or affiliate commissions to gain a client paying 5/month !
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  36. #36
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    I notice that a bid for "hosting" on adwords could cost you 13$. There are a lot of companies offering hosting.
    20.000 for the first year ... I guess you will go above 200.000
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  37. #37
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    When it comes to CPA marketing, people have to realise that there likely (alot of the times) is going to be a "scrub rate" which askhostinc is likely talking about that meets the merchants required eCPA.

    Having worked for an sms/mobile entertainment company in the past managing affiliates/large CPA networks, it really opened my eyes up to the dark side of affiliate marketing. Really eye opening.
    Last edited by nuthin; 04-05-2011 at 03:25 AM.
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  38. #38
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    I think you guys are right it is best to explore different advertising methods but more importantly is to offer your clients outstanding service. In doing this you will slowly grow your business with satisfied clients. I do believe that you need to advertise but not to put thousands and thousands of pounds/dollars into it as it would be a waste as you have no reputation in the market.

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