Indeed marketing is extremely important for any business, but there are several forms of marketing. Just remember that the main idea is get people to recognize you and to decide to do business with you.
I think the web hosting industry is what economists would call monopolistic competition, in which product differentiation is very important (it might be argued that web hosting is actually perfect competition). To differentiate a product means to make at least marginally different from similar products from competing firms.
To answer your bullet points:
1 and 2. Yes, marketing plays a role and is important to building a customer base.
3. Getting word-of-mouth advertising from our existing customers is the strategy.
4. Not spending money on advertising at the moment. Word-of-mouth is bought with decent service and being willing to help the customer.
I certainly hope you succeed in your endeavors. One small word of advice I got a long time ago is not to try to grow too fast. As with everything build up steadily and create a strong foundation for yourself. It never hurts to do a little experimenting and then step back to see the result.
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