Take On the Big Guys
As a web host startup, it may seem intimidating to be playing in the same field as large corporations with seemingly bottomless pockets and endlessly vast resources. But in a competitive environment where having a unique approach can make all the difference, there is a strategy for those starting a web hosting business. And the strategy acknowledges the fact that being small isnít necessarily a disadvantage. In fact, there are many ways where you can admit the fact that you are a small web hosting company, and end up on top of the big guys. Hereís how to do it.
Itís okay to be small. So flaunt it.
Some web hosts feel that portraying the big company image can justify their presence and compensate for the fact that they are still in the startup phase. They come up with a technically appealing name, spend their startup capital on professional web design and launch ads that promote a larger company image. While there is nothing wrong with this approach, it has flooded the market with so many web hosting companies that seem large but appear incapable of providing a competent offering of services to their customers.
What many web host startups do not realize is that being small is okay. Portraying a small company image and being humble about your startup is not going to send you in a downward spiral towards failure. In fact, a wholesome and down-to-earth company image associated with your small web hosting company can even attract customers, those who value honesty and integrity over flash and glitzy glamour. Itís okay to capitalize on the fact that you are a small web hosting company, as long as you are able to deliver your services effectively.
You can be flexible. Itís an advantage.
Large hosting companies are usually plagued by endless policies and methodologies that small web hosting companies and startups do not have. This is an advantage. Being a flexible web host can benefit you in many ways. For one, it allows you to adjust your policies to meet the requirements of your customers. Who says that the satisfaction guarantee can only be for 30 days? Why not make it 60 days? Why should the customer prepay for an entire year, cancel early and not get anything back? Should a frustrated customer receive free hosting for one month, two months, or one year? What should you reward customers who give you referrals?
Of course, with every policy you alter, there will be implications. They can be good or bad. But with many large web hosts enforcing policies as they should, being a small web hosting company gives you the advantage of being able to bend the rules. Donít take the big company approach and simply say no to your customers without thinking twice about it. Learn how to compromise, listen to their needs and address it. Youíll never know what kind of policies youíll discover and implement. Policies that will make you a favored web host over your competitors. And if it makes your customers happy and choose you over one of the larger players, isnít it worthwhile?
Build strong relationships. Then grow.
Large hosting companies grew to their size because of one thing: their customers. It is impossible for any startup to grow without supportive customers, and with this as your focus of attention, use the fact that you are a small business to snowball your customer base. Instead of taking the impersonal approach that many larger web hosting companies take, provide a more personal and genuine experience to your customers. Call every new customer after they sign up and personally thank them for their business. Send an e-mail out every month providing customers with updates on your new service offerings. Conduct surveys and ask for customer feedback. Value your customers and youíll never have to battle it out with the big guys.
Every customer is valuable to your business so concentrate on giving them the absolute best. Keep in mind that the cost of acquiring each customer is very high, considering the fact that there are other web hosting companies vying for the same customers as you are. So once youíve earned the trust and loyalty of a customer, nurture it and let it grow into something more. Each new customer can bring more business by referrals, so never underestimate the individual worth of each of your customers.
Donít worry about price. Think value.
With financial resources comes the ability of larger hosting companies to wage price wars with its competitors. This provides customers with amazing prices. But from the perspective of a web host startup comes the intimidation and sometimes the feel of having to match the price of large companies, or offer even cheaper prices.
From the beginning, this strategy will catapult you into failure. Unless you are armed with the financial ability to live off lean profit margins, do not worry about having to charge cheap prices just to gain customers. Instead, calculate your costs and formulate prices accordingly. Compare your prices to the market and ask yourself, ďHow do I add value to justify these prices?Ē
As a small web hosting company, you have the ability to provide services that go above and beyond customer expectations. Be creative. Adding value to the basic hosting plans you offer can come in many forms. Do you offer assistance with setting up blogs or shopping carts? Are there products or services you can bundle with your hosting? Compose value added hosting packages that customers will love, and youíll never have to take on the big guys when it comes to pricing.
Act small. Think big.
For the first few years of your web host startup, there is nothing wrong with acting like a small web hosting company. But donít let it stop you from thinking big. Being able to reach the point where you are generating your desired amount of revenue and having a couple hundred thousand or so customers requires thoughts and strategies of growth and expansion. Naturally, this will come from the moment you begin your web hosting company, and will continue on as you oversee its growth.
Being ambitious and striving for growth isnít a bad thing. But donít get carried away by it that you begin losing touch with the small details that really matter, like building customer relationships, managing your financial resources, initiating creative marketing campaigns and promotions.
As a web host startup, you have many years ahead that will be filled with challenges and obstacles. Be prepared, and as your web hosting business starts to grow, never forget how it was like to be a web host startup. Always value each and every moment you go through and use it as a learning experience that will help you propel your web hosting business and eventually become one of the big guys.
Copyright © 2004 Johnder Perez