Marketing Strategies for Hosting Companies… We should learn from the insurance industry?
Seems odd, no? It may surprise you to learn the number of similarities and parallels between the hosting and insurance businesses:
- Both are service industries, each one providing protection against possible negative eventualities.
- Both are in a highly competitive industry, competing with multiple companies providing similar services for the same customers.
- There are commodity providers, premium providers and specialists in both industry
- An insurance agent is regarded as a trusted advisor, very similar to the way an IT expert in the hosting industry is regarded.
- Most insurance customers conduct research over the Internet prior to choosing the right company for them, just as businesses do when selecting a hosting provider.
Perhaps the most obvious similarity lies in the vast number of insurance agencies and the enormous amount of competition that companies have to deal with. Sound familiar? So how can you market your company in a way that will make you stand out from the competition? And, make no mistake, there is a lot of competition in the hosting industry.
In fact, there are literally thousands and thousands of other hosting providers out there, ready to compete for your business. According to Phil Shih, Managing Director, Structure Research, “The infrastructure services market is fragmented and complex with several tiers of providers. There are literally thousands of hosting providers in North America, that own their own infrastructure, and a count in the range of 5-10k would not be unreasonable”.
Just imagine it from your customers’ perspective – how in the world can they make the best choice when there are so many hosting companies to choose from? That’s particularly true when so many companies are, for the most part, selling the same thing. So what can you do to distinguish your company and services from all the rest?
Marketing 101 for Hosting Providers: Think of it this Way…
Considering the amount of competition in the hosting industry, trying to come up with an effective means to market your company may seem like a daunting task. That’s why it’s helpful to make some comparisons with another type of business that we all know quite well – the insurance industry. It may surprise you to learn that there are many similarities between a hosting company and an insurance provider.
Think of it this way: both hosting providers and insurance companies offer their clients protection against threats, a certain peace of mind for their customers, emergency backup plans if the worst should happen, and they also serve to protect a company’s greatest assets – whether it be data or the business itself. Given the great number of similarities, it only makes sense to see what we can learn from the large insurance industry brands. They’ve been doing this a long time; they must be doing something right!
Step #1: List Your Company’s Strengths – Specialize, Specialize, Specialize
Although it could be argued that all insurance companies offer the same basic services, it’s equally true that different companies specialize in different types of coverage. Have you ever stopped to consider how insurance companies market themselves based on the special services they offer? Take flood insurance, for example. Not every company offers this type of coverage, but Travelers and National General Insurance do, so they proudly market that coverage to potential customers. Medical malpractice insurance certainly isn’t available from every insurance company, but it’s a lucrative business for those companies who do offer it, such as MedPro and The Doctors Company.
Looking for insurance coverage for a vacation home? That can be hard to find unless you try Farmer’s or Allstate, both of which offer this special coverage to their customers and advertise the fact that they do. Some providers don’t offer personal liability insurance, but Liberty Mutual and Geico both offer this form of protection. And although most homeowners’ policies don’t provide coverage for earthquake damage, USAA allows customers in some states to purchase earthquake coverage at an additional fee.
While there’s no doubt that all hosting companies provide the same basic services, there’s also no question that each company has different strengths in different areas – specialization and optimization is the key. Take the time to consider what your customers would say are the greatest benefits your company offers. And don’t be shy about emphasizing key areas that set you apart from lesser competitors in your space:
- Security and compliance: Can you assure that the services you offer your clients are secure and compliant with regulatory requirements, such as PCI or HIPAA? Do you have a chief healthcare officer on staff that knows the ins and outs of HIPAA? If so, hospitals and clinics would surely be inclined to get your advice on business and IT matters.
- Application stack management: Do you come from a background of software application development and find yourself suddenly in the hosting business? If so, that’s a huge advantage – you know how to optimize and tune application performance through the various tiers and could help SaaS companies maximize performance and long-run savings in their IT infrastructure.
- Colo to Cloud: If you’ve got a rich history in colocation and are now helping customers move to the cloud, you’ve got a leg up on many other “cloud-only” providers. Chances are you’re also good at connecting on-premise clouds (e.g., VMware expertise). Your hybrid positioning is the perfect solution for many organizations stuck with legacy IT infrastructure but needing to take advantage of elastic cloud resources.
- Managed services: Can you proudly say that your consultative approach is the best in the industry? Do you have the customer stories to back this up? Don’t overlook the importance of reliable, consistent support – a benefit that many of your customers would most likely consider to be a definite advantage over your competition whether during the evaluation, architecting, migration or implementation process.
These are just a few examples of how you can communicate your area(s) of specialization.
By listing the special strengths your company offers, it will allow you to relate to your most likely customer base and have them relate to your services better than if you were just promoting yourself as a generic “cloud vendor.”
If your company has been up and running for a while, you already know who comprises your customer base. Either way, you’ve just completed two of the necessary steps toward achieving the next task in developing your marketing strategy – identifying your customer base and analyzing your strengths.
You can’t be all things to all people. This doesn’t mean that you automatically dismiss the customers who don’t meet certain criteria – instead, it just means that you’ll be able to use the time and money you devote to marketing in a more effective way by going after those individuals and businesses that are most likely to become your customers.
Insurance companies, for example, typically identify their target market and streamline their marketing efforts to focus on those people or organizations that are most likely to purchase their services.
Remember the example we used earlier of an insurance company that specialized in medical malpractice insurance, MedPro? If you visit their Web site, you’ll find that it is most definitely designed for physicians and other healthcare professionals. That’s their target market, and that’s where their marketing efforts are focused.
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