by Adam Bogobowicz, Senior Director of Product Marketing for Service Providers, Parallels

 

One can learn plenty from good advice but nothing is a better teacher than a respectable failure. I was talking about it with my colleagues, Michael Fountain (mfountain@parallels.com) and Alex Goncharov (alex@parallels.com) who are 10+ year veterans of the hosting industry, and we decided to compile a list of reasons for why good (small) hosting companies fail with some tips on how to avoid it with your own business. We know that this list is far from comprehensive, so if there is a lesson that you would like to share with fellow hosters please comment on the blog on this site or send us e-mail. And of course if you lived through one of these disaster scenarios yourself, please share it with the world.

 

They gave it away for free in the hope of making it up in volume

 

There are a few well-funded hosting companies, still in business, which tried this strategy. Some of them do get lucky and if you think about Facebook – very lucky! But if you are starting out and are funded with your savings, credit card and your folks’ money, you would be surprised how quickly these funds evaporate if you give your services away for free. On the other hand, if you just got funded $40M by venture capital to give away your services, enjoy it, but plan to sell your business before the cash runs out.

Quick Tip: If you are interested in how to make Freemium model work please read my previous related blog at http://blogs.parallels.com/serviceprovider/2013/2/6/now-you-can-have-your-website-and-eat-it-too.html

 

They paid more to acquire a customer (ads &/or affiliate commissions) than the customer’s Life Time Value

 

This is a less over-the-top case than the one above and is driven by focusing on wrong measures for the business or just ignoring the financials of the business. I have seen an extreme case of this miscalculation with a company that was willing to pay 10 times Life Time Customer Value to acquire new customers. It was done in the spirit of hoping to make up the difference in the future, but with even most basic financial calculation it quickly appeared to be as problematic as a Madoff-style pyramid scheme.

Quick Tip: Some providers can pay a lot more for customers’ clicks because they upsell customers with value-add services (Internet connectivity, e-commerce packages, web design, system administration services etc.) This is why, for example, cost-per-click for hosting related keywords can go as high as $25 per click. If, however, your conversion rate is only 10%, your per customer acquisition cost will be $250, which is too high for the majority of hosting companies. Investing in lower frequency, local, niche keywords and focusing on Search Engine Optimization could help to resolve this issue.

For more information on Customer Life Time Value concept you can read this blog http://blogs.parallels.com/serviceprovider/2013/3/11/understanding-hosting-marketing-measures.html

Their customer on-boarding process took too long

 

Customers today are used to instant gratification when they make a purchase online. They expect the next screen they see to be the one that holds the information telling them what they just purchased. If you take 24 hours to process an order, you may think that’s reasonable, but it’s not. Automation is your friend. Use it. Also, don’t make your customers tell you their life story. Stop asking for a fax number! When is the last time you used a fax machine to process an order? The more things you ask for on your order form, the more time your customers spend thinking about if they really want your service or not. Don’t make them think that hard.

Quick Tip: Asking customers to provide simple contact information (Name, Phone, Email) in the beginning of purchase process and immediately posting it to your CRM is a very good idea. You can call every customer who did not complete the purchase in minutes and help them to finish the purchase. Also customers are willing to provide more information once they have paid for your order.

They got bad a support reputation

 

I personally know many hosters who put a phone number on their site and then don’t answer the phone. Do not get a bad support reputation – it will kill you. People talk and when they do, they like to acknowledge other people’s mistakes. So, don’t put a Twitter handle on your site if you are not setup to respond to customer tweets within 30 minutes! Set expectations early and set expectations often. If you mess up and it becomes public, then resolve it publically. Your customers are watching.

Quick Tip: Use virtual phone system. You will be surprised how affordable their fees are. For example http://mightycall.com is less than $10/month.

Fraud got their merchant account shut down

 

Let’s face facts…if you sell services online, you will be the victim of fraud sooner rather than later. Automation is great, but it must be done in a way that lowers your risk to fraudulent transactions. Not implementing any fraud prevention measures is a guaranteed way to get your merchant account or credit card process account terminated due to too many fraudulent transactions that result in charge backs. And this is not a rare scenario. Anybody who has been in this industry a few years knows a business that faced this problem. 

Quick Tip: One of the ways to deal with this problem is to use a hosting automation system that comes with large number of Fraud Screening tools, flexible manual approval rules and support for PREAUTH, also well known as “Authorization Hold” credit card processing. With Preauth processing your hosting automation captures the funds and waits for you to approve it manually after looking at and considering all the information from Fraud Screening tools.

They didn’t know how to reboot a server without a control panel

 

Hosting is a business with minimum technical skill requirement. This problem (not having technical chops to run a hosting business) is a fairly recent phenomenon because as hosting technology gets simpler, many new hosters come into this industry without a deeper understanding of the underlying hosting technology. We have seen over the last two years quite a few startup hosting companies without Linux or Windows admin skills that got themselves in serious trouble when technical issues outside of the panel happen to their business… and problems do happen… just ask a hoster.

Quick Tip: Consider buying and using hosting infrastructure and automation products that come with unlimited support, such as Parallels Plesk Automation or make sure your support contract is 24×7, valid and active. If you cannot afford to hire a good system administrator right now, grow your own – gradually train and certify your support engineers, so they eventually will become very good system administrators with some practice. Many Software Vendors provide technical training for free or this can be negotiated during purchase. When Alex was managing his hosting business he managed to get MCSE training for all his support engineers sponsored by Microsoft for free. Did you know that you can have your engineers trained to manage Parallels Business Automation Standard for free?

The server was in a closet on a Comcast cable pipe

 

Ok, this one is just silly but you would not believe how common. I have seen desktop PC in the kitchen playing the role of a datacenter. I can understand this when hosting is done in a developing country where leasing a box is not an option, but if you choose to run your own servers instead of leasing from one of many infrastructure providers in US or Europe, you are wasting your money and asking for a disaster.

 

They thought that Excel was a wonderful billing automation solution

 

You would be amazed to see how many hosters are using Excel on their desktops to bill their customers… and when the hard drive fails they go out of business. Excel was OK for a small hosting business to keep track of customers, hosting plans, billing cycles, IPs, servers, when you had your first 10 customers, but eventually when your enterprise starts to grow, you sure need to move to a proper hosting automation and billing solution.

 

Quick Tip:  Automate your hosting business. Get hosting automation that provides full range of traditional hosting services right out of the box: domain registration, shared hosting (Linux/Windows), VPS hosting (Linux/Windows), Hypervisor-based VMs, dedicated servers, SSL certificates. Reconsider your .xls billing strategy and take a look at http://www.parallels.com/products/pba-standard/

By Pavan Vyas, Product Marketing Manager, Asigra

 

As you look to expand your managed service practice, should you be looking at offering cloud services, specifically cloud backup?  With the rapid growth of both structured and unstructured data taking place in organizations today, companies are struggling with protecting this data. In specific verticals such as financial services and healthcare, organizations must even have a data protection strategy in place for compliance purposes.  These data points may cause you to have a number of questions – the foremost being – Is offering cloud backup and recovery services lucrative?  Can I make money offering cloud backup services?  The answer to both those questions is “Yes”.

 

In this blog post, I am going to provide you with some tips and point you to a great resource that can help you with taking this all important business decision. As a company that has helped numerous service providers across the world make the move to the cloud and build successful cloud backup and recovery services using our enterprise software platform, we know that the cloud backup market is not for everyone. So, who makes an ideal candidate for offering cloud backup services? How do you decide if it is the right business venture for you?

 

 As always the first step in any such process is, understanding your current business situation and your customers’ needs. There are about seven critical questions that you should be asking yourself such as “Do you have customers in highly regulated industries”? or “On an average how much incremental backup data do your customers generate each month?”. You can find those questions in this paper titled “Assessing your cloud backup opportunity”.  As you go through this assessment, not only will you determine if offering cloud backup services is right for your business, you will also uncover new ways of thinking about your customers. This can help you grow your business with your existing customers, develop strategies for attracting new customers and obtain higher levels of customer satisfaction.

 

 In this process of self discovery, if you ever need any help in understanding where you stand vis-à-vis your customers’ needs, we suggest that you reach out to some of your largest and trusted customers. By engaging them through surveys, interviews, or even one-on-one discussions, you can get any data points that you don’t have or answer questions that you are struggling with by yourself.

 

As important as it is that cloud backup services make sense to your customers, it is also critical that cloud backup services fit in with the rest of your practice today – both technologically and psychologically. It is essential that your customers can feel comfortable in trusting you to keep their critical business data – the lifeblood of their business – safe. It is also important that their current experience in working with you paves the way towards their having that confidence in you. We have a set of questions that can help you determine if cloud backup fits in well with your existing business and if this is the right time for you to proceed on making it a core component of your service offerings.  Make sure to spend some time thinking through those questions.

 

Cloud backup managed services offers tremendous opportunities for service providers like you. We can vouch for this based on the experience of service providers in our own ecosystem. We are sure our paper will help you make the right business decisions about entering the cloud backup and recovery market, just like it has done for so many of our hybrid partners over the decades!

 

By  Adam Bogobowicz, Sr. Director of Product Marketing for Service Providers, Parallels

 

Just like I normally do, last Friday I went to Big-Bob’s-Cuts for my quarterly haircut. During the haircut Bob and I usually have a conversation about his IT infrastructure. I like to keep an eye on changes in the small business IT, and it keeps Bob away from discussing his gout problems.

 

On previous occasions it was a short conversation, just about matching the trim time, since Bob’s IT was composed of a cellphone, a notepad (made of paper) and a credit card reader. But not this Friday, as Bob apparently has decided to join the 21^st century.

 

Even before plugging in his trimmer, Bob proudly announced to me that he went online! At this point I fully expected that he would have an account with a local hoster and a website in a shared hosting environment with a big picture of Bob and his phone number. But I underestimated Ralphy, his 16 year old nephew.

 

If you are a hoster you must be thinking that Ralph got Big Bob’s Cuts into a VPS or a cloud server, installed Panel software on it and using Application Marketplace installed all the apps needed for Bob to conduct his business online.

 

Well, not exactly. Apparently brought up on iPhones, Facebook and Xbox, Ralph does not know anything about hosting, panels or SMB applications. Instead Ralph created a full SMB IT infrastructure for Bob out of an iPad and a few SaaS services he found via Google.

 

First Ralphy got rid of the Bob’s notepad with services from https://www.schedulicity.com/ (well not really, notepad was still there …) and at the same time got Bob’s Cuts into an online catalog of services. Next he took care of in-shop payments by attaching a card reader to an iPad https://squareup.com/ which also got rid of all the paper (except Bob’s notepad) in the shop.

 

But that is not all; he then used http://www.bigcommerce.com/  not only to setup a website but to also setup a store featuring Bob’s famous $3.99 shampoo and shaving cream bundle. I am a bit skeptical of success for this venture, but hey, it costs $25 / month, so it breaks even with just a few dozen sales and he already got one after my shopping spree. $3.99 is a really good deal, you should try it out.

 

I wrote this blog because I finally understood why small businesses are not buying (more) apps from hosters. They do not need or want apps. Instead small businesses are choosing solutions to their business problems on the web. Solutions not separate applications that may or may not work together.

 

SaaS providers are a serious challenge to our industry and we cannot ignore them or pretend that they represent a different market. These companies exemplify precisely how the one trillion dollars of SMB  spend will be distributed.

 

So far from ignoring, traditional hosters need to learn from them and incorporate best ideas from these new players into how we conduct business online. Here are a few things that I see hosters should borrow from the likes of Bigcommerce and Schedulicity.

 

1. Focus on small business problem you are solving and not on memory, CPU, cores or storage. Do you think Bob or Ralphy care?
2. Make it simple. The SMB IT admins are sons and nephews much more often than paid-by-the- hour system integrators. If Ralph cannot set it up for Bob, your business prospects are limited.
3. Showcase your solution. Go to schedulicity.com and see the home page of this service. It is not about hosting. It is all about customers. Go to Bigcommerce.com and see customer stories on the home page. And read my previous blog on differentiation. What Bigcommerce is doing is differentiation through customer stories. Brilliant.

Full disclosure, Bigcommerce.com is using Parallels Plesk Panel as infrastructure for delivering its solution and Parallels is not associated with the other two solutions mentioned.

By, Elliot Curtis, Senior Director, Channel Development, Parallels

 

The world of the Independent Software Vendor (ISV) has changed radically over the last few years and continues to evolve as the Cloud becomes more and more pervasive for businesses of all sizes. Here, I take a look at just a few trends that ISVs face and the implications for their business.

 

Everyone is becoming an ISV: With advances in development tools and IaaS/PaaS, the barriers to building and delivering a business oriented SaaS application are very low. Consequently, IT services companies of all types (VARs, SIs, Hosters, Web Designers, etc.) find it easy to move into adjacent ISV categories. It is a relatively reliable way of generating new reoccurring revenue from an existing customer base and increases customer stickiness. As a result, traditional SaaS ISVs are facing an increasingly crowded market with many competitors who have a built-in customer base. Having a clear understanding of routes-to-market and channel strategy has become increasingly critical for application success, and ISVs should be prepared to develop strategic relationships that help reduce the burden of getting in front of potential customers.

 

Enterprise problems are becoming SMB problems and even Consumer problems: Starting in the middle of the last decade a lot of money was spent by Enterprise IT on trying to solve hard problems around the applications they supported for their business clients. How can data get shared across multiple applications? How do users avoid multiple application authentications and credentials? How do users quickly find the application they need? SMBs typically avoided tackling these issues because they either had pretty simple application requirements or they could afford to ignore the problem. But, because of the Cloud, what used to be limited to the realm of Enterprise IT has started to become everyone’s problem. SMBs (and I’ll throw consumers in too) increasingly have access to a huge variety of applications that would have been unthinkable even five years ago, and while their tolerance for multiple log-ins, siloed solutions, and difficult application discovery is pretty high, it is shrinking fast. For applications to become more SMB friendly, ISVs need to think about: single sign-on support for the customer, applications being aware of other applications so that data is shared, and application discoverability based on user requirements. These are not problems ISVs can solve in isolation and are also issues shared by Cloud Marketplace providers, who are increasingly the face to the customer. The ecosystem needs to have standardized models and approaches that offer open participation and a scalable approach.

 

Cross application & platform support: Again, this used to be an Enterprise only challenge that was solved by a centralized support organization that understood the infrastructure and the applications running on that infrastructure within the confines of Enterprise IT. With the proliferation of SaaS applications, marketplaces and aggregator/brokers, all of whom have a part to play in delivering the service to the customer, how does the SMB customer get effective and rapid resolution to their problem? Consider the complexity: a customer may purchase a suite of SaaS apps from a Service Provider or Marketplace that is using a Service Delivery Platform from yet another software vendor and meanwhile each SaaS ISV is running their own application in a datacenter somewhere. Questions such as; “Who owns Tier 1 support & how do incidents get escalated?” are just scratching the surface of business rules. Operationally, there may be as many as five or six different support systems that all need to talk to each other with a taxonomy everyone involved understands. If effective technical and business solutions are not implemented up-front, support will quickly become a huge expense and a customer satisfaction nightmare.

 

As SaaS ISVs think through their go-to-market strategies and execution plans, these are three critical areas that have implications for future growth and sustainability. A key to success is to explore emerging standards such as APS 2.0 and Cloud companies that are working to help overcome these challenges.

by, Adam Bogobowicz, Director of Product Marketing for Service Providers, Parallels

 

This Blog is a follow up to a conversation on Parallels Forum. It highlights Parallels Plesk Automation (PPA) architecture options and related hardware and licensing fees. My forum response is reposted here as it may be of interest to a broader audience or hosters considering Parallels Plesk Automation as their next Professional Hosting Platform. The core of the forum question was related to business logic of Parallels Plesk Automation for micro-hosting scenarios. My answer comments on a broader set of scales and architecture options possible with Parallels Plesk Automation.

 

_______________

 

With the number of Parallels Plesk Automation deployments increasing I am now able to provide an answer to your questions based not only on product architecture but also on experiences from in-production deployments.

 

From what I can see it is quite clear that value of PPA over a single Parallels Plesk Panel deployment increases with the scale of the system. This is consistent with the way PPA is architected. We wanted this product to be the platform for professional hosting and optimized it for hosters for whom hosting is a full time business.

 

This means that if you are running a hosting business with 100 or less customers/domains Parallels Plesk Panel is the best solution in town. It is simpler than Parallels Plesk Automation and with 100 customers, scale and management is still not a problem. It still makes sense to run at this scale with Parallels Plesk Panel Unlimited dedicated license to qualify for free support but if money is short, you can find a discounted Parallels Plesk Panel 100 domain licenses with one of Parallels infrastructure partners.

 

At even smaller scale of micro-hosting you will find an even lower cost solution with Parallels Plesk Panel 10 domain offered for free by many of our partners.

 

Please Note: There are specialized hosting services scenarios, where security or customer requirements dictate isolation and multi-server architecture with low customer counts. If this is of interest to you I am happy to address it separately. 

 

Now the good news is that you do not need to start your hosting business on Plesk Automation to be able to move up to it later on. The transition from Plesk 11 to Plesk Automation is easy so when your business grows you can simply make the choice to move to the professional hosting platform.

 

You should consider Parallels Plesk Automation for the first time at the 300-500 user level or when the number of VPSs and server you are managing starts to be (technical term) “a pain to manage”. Managing more than 4 servers without centralized Management Panel would give me a headache.

 

Here you have a choice of managing a Plesk Automation on a series of VPSs or managing a dedicated server that you provision containers onto. My advice is, if you have the skills, you should go with the dedicated box and run Parallels Cloud Server virtualization on it.

 

I suggest one quad core server with 32Gb RAM and 1Tb hardware RAID 10 storage like Dell PE620, Intel Xeon 2609 2.4 Ghz 4C x 2, 32Gb RDIMM RAM, 300Gb SAS 6Gbps x 8 (1.2Tb available storage), Perc H710 Hardware RAID 10 (Dell offers it for $171/month lease) and run 4 Parallels Cloud Server containers on it.

 

I would run:

• ·          PPA Management node on container #1 and give it 4GB of RAM and 10GB of storage
• ·          Apache Web Server and MySQL server on container #2 and give it 4GB of RAM and 300GB of storage
• ·          Apache Web Server and MySQL server on container #3 and give it 4GB of RAM and 300GB of storage
• ·          Postfix mail server, Parallels Premium Antivirus, Secondary DNS, Webmail on container #4 and give it 4GB of RAM and 200GB of storage

This system will scale to 600 Users at 1GB storage allocation but can handle 2x of easily depending on type of resource allocation method used and actual resource utilization. 

 

At this scale cost value calculation is very different from your calculation with licensing cost now being a much smaller fraction of the overall system cost. 

 

In fact in this configuration you would only pay (with no partnership discounts) $39 x 4 for Plesk licenses, + $70 for PCS (5CT) and + 6 for Parallels Premium Antivirus = $232 / month. You can lease this server from Dell for only $171/month and collocate it for less than $200/month or lease it directly from one of the infrastructure service providers. Thus your monthly cost would be around $600/month or around $1 per customer in this configuration.

 

And of course you can mix in an IIS Web Server and MS SQL server node into the system and for that I would add a virtual machine with 8Gb RAM and Windows 2008 R2 using Parallels Cloud Server. 

 

From what I see in deployments of Parallels Plesk Automation next scale level comes from hosters running PPA on multiple physical servers and dedicated backup node.

 

For example, let’s say you are running two production boxes with 32Gb RAM and 1Tb RAID 10 storage running Parallels Cloud Server (PCS) and one backup box with 8 Gb RAM and 1Tb RAID 10 storage and running Parallels Cloud Server.

On the first box you can run

• ·          PPA Management node on container #1 and give it 8GB of RAM and 20GB of storage
• ·          Web server on container #2 and give it 4GB of RAM and 200GB of storage
• ·          Web server on container #3 and give it 4GB of RAM and 200GB of storage
• ·          MySQL on container #4 and give it 4GB of RAM and 200GB of storage
• ·          Primary DNS server #5 and give it 1GB of RAM and 20GB of storage

On the second box

• ·          Secondary DNS server on container #1 and give it 1GB of RAM and 20GB of storage
• ·          Web server and MySQL Server on container #2 and give it 4GB of RAM and 200GB of storage
• ·          Web server on MS SQL Server container #3 and give it 8GB of RAM and 200GB of storage
• ·          SmarterMail Server on container #4 and give it 8GB of RAM and 200GB of storage

A third backup server would be dedicated to the backup role.

 

Again you can mix and match, extend with Windows hosting and sell to 2000+ users

 

At full Parallels Plesk Automation scale, hosters usually go into fully dedicated server roles and scale up to 6+ physical servers with at minimum two 32 GB RAM and 1Tb RAID 10 storage servers dedicated to the web server role. At this scale you will be able to support thousands of users.

 

Please let know if this answer was useful and if I can answer any additional questions.

 

 

Did you know that 6 million SMBs worldwide entered the cloud for the first time last year? Results for the 2013 Parallels 2013 SMB Cloud Insights reports were unveiled at Parallels Summit 2013 during the session, Parallels SMB Cloud Insights™ for 2013.  During this session some of the top trends in the SMB cloud market were shared along with insight into how to best compete in the cloud.

 

If you were unable to attend Parallels Summit and this valuable session, don’t worry! We are hosting a webinar on March 26 at 8 AM (PDT) that will cover the top trends you need to know to compete in the cloud. Register today for this informative webinar and start to grow your cloud services portfolio in 2013!

by, Martin Saunders, Technical Director, Myhost.ie

 

Myhost.ie is an established, innovative hosting company based in the west of Ireland. We offer our customers reliable and affordable hosting solutions from personal blogs to busy ecommerce- driven websites.

 

We were looking for a robust and expansive solution to replace our shared hosting platform. We have used Parallels control panels since our inception. When we learnt about their latest offering Parallels Plesk Automation, we setup a test bed and began working with Parallels engineers directly to fix any problems that arose during testing, helping the product move into production.

 

We have been testing now for six months and went into production nearly two months ago. Our new customers are now using the platform and existing customer are being migrated over.

 

Our customers have been very happy with the new control panel, noticeable performance increase, and the new hosting features available to them.

 

The new Parallels Plesk Automation suite brings a new level of control and security to our hosting platform that helps us maintain our belief that ‘stuff should just work’.

by, Adam Bogobowicz, Sr. Director Product Marketing, Parallels

 

My previous blog on differentiation generated interesting feedback. Thank you so much for your questions and opinions. I would like to respond to one particular question that was pointed my way: “How do I know that I am doing the-right-marketing?”

 

The purpose of marketing is to make money. It is not window dressing function and it is not a “making customers happy” function. For hosters, marketing is the business of hosting.

 

At the SMB scale in which the vast majority of shared hosters operate, marketing needs to be laser focused on three goals:

1. retaining existing customers
2. convincing and enabling them to buy more
3. bringing in new customers

 

This purpose-driven perspective on the marketing function has another advantage. It provides a clear measures of success. The most comprehensive measure for the first two goals is Customer Life Time Value. It connects two sub-measures routinely used in our business (Average Revenue Per User and Churn) in a way that allows for calculating marketing ROI on the third goal: attracting new customers.

 

Average revenue per user (ARPU) fails as a marketing measure because it ignores the fact that hosting is not a one-time purchase business. You can dramatically increase ARPU by overpromising and under-delivering on your service and go out of business when your frustrated customers leave.

 

Churn on the other hand focuses on customer retention but ignores customer profitability. You can drive customer churn down by offering great service and support at below cost and retain all your customers all the way to bankruptcy.

 

Customer Life Time Value (CLTV) connects these two measures and creates a new level of understanding for your business and your marketing. It is simple to calculate as a multiplication of ARPU and average time a customer stays with your service. For a customer on a services with ARPU of $10/month and expected life on a service of 18 months CLTV equals $180. CLTV also suggests two powerful levers for driving hosting business revenue: upsell to maximize ARPU and retention strategies to maximize lifetime.

 

With a CLTV in place you will also be equipped with a baseline for new customer acquisition costs. Looking at the example above, a $180 CLTV gives you an upper limit for a price to pay for bringing a new customer into your business. This combined with your marginal cost of maintaining and supporting a new customer, can now be used to calculate an ROI on the marketing spend for bringing new customers into the business.

 

Let me know if you find these blogs useful. You can always email me at adambo@parallels.com

by Darren Bibby, VP of Software Channels and Ecosystem, IDC Link

 

IDC Link’s VP of Software Channels and Ecosystem, Darren Bibby, enjoyed what he heard at Parallels Summit 2013 and has written a glowing review of the direction Parallels is headed in. Bibby was most impressed with APS 2.0 and its ability to create an ecosystem for ISVs that is easy to plug into. He likens APS to the Ikea Allen key as a tool that can put everything together. APS makes it easier for smaller service providers to find opportunity to grow by enabling them to easily add new software products to their infrastructure. Read for yourself this great review of Parallels plans and products, Parallels Software: A Growing Ecosystem.

by, Adam Bogobowicz, Sr. Director of Product Marketing, Parallels

 

This blog is a response to the most common question that I and my marketing team receive from small and growing hosters: “I do not know how to make my business different and unique in some way. How do I differentiate my products and services?” 

 

Your business is differentiated not by what you sell but by what people buy. What you sell is finite, can be described as a set of features, an object or a service with a price. What your customers buy is changing, unique to each buyer and differentiated not by feature and prices but by the unique set of problems it solves for the customers. It is your customers who differentiate your business not your products.

 

But you still sell a product. And if you are a shared hoster you sell hosting services … and if you are like most shared hosters you sell them in 3 flavors.

• ·         Bronze, Silver, Gold
• ·         Small, Medium, Big
• ·         Starter, Preferred, Professional 

Each of these flavors describes a set of resources (memory, accounts, websites counts). If you navigate to pretty much any shared hosting websites you will find a carbon copy of these. All the offers are focused on product and feature level differentiation.

 

But your business is not a carbon copy. Your customers are choosing a “medium hosting package” to start a business, get a blog for a church, or to create a site for a favorite cat. They are doing it in their neck of the woods, their living room and on their couch and not on-the-generic-internet. 

 

So sell a Bronze website hosting service but differentiate it by telling the story from your customers’ perspective. Find out who is buying from you and why and tell their story. You are making a difference in their lives that is worth paying for so it is also worth talking about and sharing.

 

The simplest way to tell a story is through a simple blog. Many larger hosters do it quite well and you can see good examples on Softlayer site at http://blog.softlayer.com/softlayer/ or Rackspace at http://www.rackspace.com/blog/. My heart though goes to GoDaddy and Bob Parsons’ blog at http://www.bobparsons.me/index.php?ci=78114 . Nobody in the hosting industry has more personality than Bob and, in my opinion, the success of GoDaddy was singlehandedly driven by the differentiated persona that Bob was able to create.

 

Another very powerful way of storytelling can be done through the voice of the customer. Here you have a choice of testimonials and more formal case studies. My personal favorites, however, are customer- written blogs. They have more depth than testimonials and are less corporate and dry then case studies, and when the customer writes the story of their business it comes from the heart.

 

If you can do both – create stories in your own voice and supplement these with the voice of your customers, you will be making a truly inviting narrative.

 

Telling your customers’ story will give you another advantage. Story telling is a personal thing. One learns as much about the storyteller as the story.  And this story will be told by you and will therefore be unique and made specific by your voice and personality. It will be your first step to creating a brand for your business and making your business remarkable i.e. one that people will remark on.

 

Let me know if you find these blogs useful. Write back, argue if you disagree. I want to hear from you. You can always email me at adambo@parallels.com