I thought it would be a good time to relook at the 3 basic strategies that can be used to grow any business and yes this includes the hosting industry. These are not so much alternatives but strategies that should be used simultaneously.
The first way is to grow your business by getting more customers.
The second way is to increase how frequently these customers purchase from you and the third way is when they buy, to get them to buy more from you.
This latter strategy relates directly to increasing the conversion rate of your site – ie make more visitors / leads / inquiries to become paying customers and to buy more than just the lowest package or offering. For this post let’s stick to the first strategy as it is the most common.
The old standby and strategy that most feel comfortable with is to get more customers through the door, phoning in, visiting your site etc. This strategy is likely to get the result you are looking for (ie more sales) however there are some factors to consider. It generally means spending more money on marketing and advertising of one sort or another. It also may mean that you aren’t being efficient with the marketing that you are doing – ie blindly pushing ahead and not focused on ways of upselling or cross selling customers or worse yet – ignoring or being oblivious to something that might affect how many customers are buying from you.
For example if there are poor customer reviews of your service or product and you aren’t aware of this or aren’t taking steps to mitigate it, the conversion rate (Cost Per Acquisition CPA) will go up – they could go way up! Simply driving more customers through the door or to your website only to have them bounce from the site or the offline equivalent of turning around and walking straight out the door again, is very costly.
Although I’m not clear on why most businesses tend to focus most of their efforts on this first tactic, I suspect it’s a combination of a lack of awareness to other options or perhaps the perception is it is easier. We’re getting X leads a week now, if we want to double our sales, we need 2X leads a week. Directives from above may also dictate that budgets be used for demand generation rather than nurturing and optimization. We’ll look at these later two areas next time.