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  1. #1

    Question Advertising. Worth it?

    For example, we have spent 90 dollars in the last couple days (adwords) and gained 9 clients from it. 7 of those clients are 5 dollars a month, 2 are 10. I have recently hit my first 100 clients, started early jan, late december and I think I have spent over 1000 dollars on advertising (It has taken me months of bad choices and wasting money before learning the ropes )

    What is "Worth it" to most of you? I have heard people say they would be paying triple or more (30-40 dollars for just one 10 dollar client)? Why so much? Generally, it’s the larger hosts that say this (or am I wrong?). And then some of the smaller hosts with very little money need to get an immediate return on advertising. What do you expect to get when going into any advertising campaign, or how much does it need to pay off for you to consider doing a campaign with the company again in the future?
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  2. #2
    Join Date
    May 2003
    Location
    Kirkland, WA
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    4,448
    $90 for 9 clients is great...Depending if you trust your level of service and reliability enough to know your customers won't leave you after the first month, be willing to spend about 3-5 months worth of income for each customer, ie $5 plan..spending $15 for the customer is safe, after 3 months..it's profit, and better yet, if that customer just recommends one person to you...even better

    Some of the big boys spend a year's income on a customer They compensate by offering yearly only, but still..they are banking on that customer referring someone or on that person staying for two years.

    Larger hosts can spend more on advertising...in hopes that in the long run it'll pay off (as it normally does)...smaller hosts rely on word of mouth more, which if you have the service and reliablity to do that, go for it...much better...your customers can be your best sales team
    Nick Nelson
    Sr. Director & GM, VAS
    Demand Media
    425.298.2282 nn@demandmedia.com

  3. #3
    Join Date
    Apr 2004
    Posts
    295
    @BlueCapacity:

    Where did you spend 90 Dollar and got 9 clients (if I may ask) ?

    EDIT: Ok, Adwords I see. However if I spend 90 bucks I get 1 or two customers and my prices are pretty much the same as yours. My site's design is looking good now. I really wonder what I am doing wrong.

    May I ask you how much do you pay per click on Adwords ?

  4. #4
    Join Date
    Jan 2004
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    Ellesmere Port, Wirral, UK
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    Re: Advertising. Worth it?

    Originally posted by BlueCapacity
    For example, we have spent 90 dollars in the last couple days (adwords)
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  5. #5
    As far as adwords goes, I have had mild luck until I hit the point that I am at now. I pay about 20-40 cents a click; I have about 100+ keywords (All relevant). My ad is actually just one of my plans with a price tag on it, that way people don’t click the ad unless they think that plan is good for them (This will reduce the useless clicks by A Lot). Maybe I shouldn’t be giving away my secrets, but it seems obvious enough. Be unique, try out new things, keep what works, like I said, I have wasted a lot of money on mistakes to get up to the point I am at now. Maybe after I am all done I can sell my marketing services for companys, since I am constantly learning .
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  6. #6
    Join Date
    Dec 2001
    Location
    New Orleans, LA
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    581
    $40 to gain one $10 a month customer is a nice return. Even if you assume that the customer only stays 12 months - that's $120 in revenue.

    Spend $40 to make $80 plus repay your $40. Of course your costs come out of the $80 - but even so - what a great return ! Refinance the house and pump it into that type of return

    Not to mention the cumulative effect of word of mouth referrals as your customer base grows - which means you effectively earn more and spend less.

    Your $90 to gain 10 clients sounds good.

    To see if it is 'worth it' - calculate how much it cost you to gain a customer. Then track how long your customers stay. From that, plus the $/month they pay - you can easily see if it's worth it.
    Andrew McMaster
    http://www.FindMyHosting.com
    Compare Prices, Consumer Reviews, Help, Guides and More.

  7. #7
    Originally posted by NovaW

    Spend $40 to make $80 plus repay your $40. Of course your costs come out of the $80 - but even so - what a great return ! Refinance the house and pump it into that type of return
    Exactly why hosting companies who come in to the biz with money have a 20 times better chance being successful then someone who comes in with less then 100 dollars.

    I'm not ready to take out a loan or something high risk yet though.
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  8. #8
    Join Date
    Dec 2001
    Location
    New Orleans, LA
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    581
    Originally posted by BlueCapacity
    Exactly why hosting companies who come in to the biz with money have a 20 times better chance being successful then someone who comes in with less then 100 dollars.
    Very true. I'd put the chances at much more than 20 times

    You have to spend money to make money - especially in a competitive market like this.

    If a new host has just a few hundred bucks or less to spend on marketing then they should either a) forget it or b) find some family / friends to host and try to build up very very slowly.
    Andrew McMaster
    http://www.FindMyHosting.com
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  9. #9
    Join Date
    Mar 2004
    Posts
    1,301
    Do you think starting with $2000? is good? NovaW mentioned a few 100 bucks then its not worth it, but 2K is not very small money, what do you think Bluecapacity? and others.. thanks

  10. #10
    Originally posted by Yaser
    Do you think starting with $2000? is good? NovaW mentioned a few 100 bucks then its not worth it, but 2K is not very small money, what do you think Bluecapacity? and others.. thanks
    Well I started with Far less. If I had 2k at start, I would be about half a year ahead of where I am at now, if not further.
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  11. #11
    Join Date
    Dec 2001
    Location
    New Orleans, LA
    Posts
    581
    $2k is not much either, but you should be able to make a start with that.

    The first thing to determine though before you spend anything is what target market you intend to focus on - is it just the wide "web hosting" market? - if so, $2k is a drop in the ocean - you could easily burn through it before you get any meaningful data to improve your conversion rates.

    If you narrow your focus - ie "windows web hosting", "Forums web hosting" etc etc - then you can target your spend more and probably reduce your cost per prospect.

    If your budget is very limited then keep the focus as narrow as possible and spend it in small chunks of $500 or less at a time. After each campaign - take stock - track how many visitors you got and how many sales and if possible track what they did on your site - Then make improvements before running another campaign.

    Adwords is a good source of targeted traffic where you can effectively rule out one part of the equation - "was the traffic targeted?" - you know it's targeted good traffic.

    The main thing is to track your campaigns. $2K doesn't leave much room for error, but there's probably many hosts that got started on a lot less.
    Andrew McMaster
    http://www.FindMyHosting.com
    Compare Prices, Consumer Reviews, Help, Guides and More.

  12. #12
    Join Date
    Mar 2004
    Posts
    1,301
    thanks NovaW and Bluecapacity, appreciate it very much.
    yaser

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