Parallels Hosting Products

May 19-20 l Washington, DC l Omni Shoreham

Douglas Johnson

Marketing Director, Parallels

Converting Clients to CustomersMarketing to Clients Visiting Your Website

Parallels Service Provider Solutions2

Agenda

• Hosting Marketing• Website Marketing• Measuring Your Success• Converting Low Value Clients to High Value Clients

This session examines the marketing of hosted services. In recent years, many services such as shared hosting have transitioned from the early adopter to the pragmatist stage of client adoption. Other services, such as SaaS are at the beginning of their adoption cycle and will soon provide lucrative sales rewards to companies who are positioned correctly. This session will link marketing theories to concrete actions which you can take to position your company. The discussion will include an overview of web analytics, email marketing, and search engine optimization tools to help you measure your success.


Hosting Trends and Opportunities

Market Trend Key Players Parallels Driven Opportunities16% Growth per year is expected through 2011

Parallels helps optimize your computing resources to minimize your costs and maximize up-selling and revenue.

Applications increase average revenue per client

Parallels SaaS standards, virtualization, and automation tools help providers offer more applications at a lower cost.

Big Companies have entered the hosting market

Parallels provides software which allows you to compete with the big players. Flexible APIs mean you can be faster to market.

Virtualization is improving hosting efficiency

Integrated automation and virtualization products provide an improved hosting infrastructure and customer services.

Windows Apps provide revenue opportunities

Parallels helps you launch Exchange, SharePoint, and CRM to provide high revenue services.


Marketing Bell Curve

VisionariesGeeks

Early Adopters

ConservativesPragmatists Skeptics

Mainstream Market ($$) Unknown

“The

Cha

sm”

Source: “Crossing the Chasm” and “Inside the Tornado” by Geoffrey Moore

Goal: Be the market leader when a product or solution “crosses the chasm”


SaaS and a ZDnet Talkback

• April 14 Article: Salesforce and Google team to conquer the enterprise

“Master Joe” says … First of all, since when is the SaaS thing such a big deal? I have to be honest. I would prefer desktop applications, over a web-based productivity suite, any day of the week. I prefer to have FULL control over my applications, and to know exactly what they are doing, what information is being transmitted to and from them, and who can see that information. …

Question: Master Joe is a ___.a) Early Adopter c) Conservativeb) Pragmatist d) Skeptic


Secure Hosted CRMFree trials, 5 layers of server securityUptime metrics and SLAwww.secureCRM.com

Question: What will Master Joe Click?

Answer: nothing – he would not search in the first place… and if he did, he would just waste your salesperson’s time.


Yahoo Finance –Web Hosting

CAMBRIDGE, Mass - Despite a long-term future marked by commoditization, enterprise spending on Web 2.0 technologies will surge over the next five years, growing 43 percent each year to reach $4.6 billion globally by 2013, according to a new report by Forrester Research, Inc. The five-year Forrester forecast includes a breakdown of future business spending on technologies such as social networking, RSS, blogs, wikis, mashups, podcasting, and widgets, as well as an analysis of enterprise Web 2.0 spending across North America, Europe, and Asia Pacific.

Forrester believes that Web 2.0 technologies represent a fundamentally new way to connect with customers and prospects and harness the collaborative power of employees. Large enterprises such as General Motors, McDonald’s, Northwestern Mutual Life Insurance, and Wells Fargo have all made heavy use of these tools, and 56 percent of North American and European enterprises consider Web 2.0 to be a priority in 2008 according to a recent Forrester survey.

Question: Where is web hosting in the product marketing cycle?


Where We Are Today?

VisionariesGeeks

Early Adopters



Shared Web Hosting

VPS Hosting Dedicated Hosting

Domain Registration

Webmail

Are you marketing to Pragmatists and Conservatives?• Pragmatists: buy based on ROI, ensure that the product/service will help their business,

only buy if other pragmatists have purchased, buy leading brand• Conservatives: skeptical of technology, require ease-of-use, buy commodity products and

shop for the best value


Your Target Market - SMBs

• Question: What are SMB Problems and Concerns?– Study by NIFB (National Federation of Independent Business), 2001

1 Cost of Health Insurance

2 Federal Taxes

3 Locating Qualified Employees

20 Poor Earnings (Profits)

34 Ability to Cost-Effectively Advertize

61 Effective Business Use of the Internet

• How Difficult Are Their Problems?– Survey by Zeryn of Small Business in Service Areas, 2005

(1 = least difficult, 5 = most difficult) 1 2 3 4 5

Finding New Customers 8% 8% 15% 38% 31%

Losing Customers to Competition 36% 36% 16% 12% 0%

Not Enough Growth 4% 0% 26% 48% 22%

Keeping Up with New Technology 46% 29% 12% 8% 4%


What Distinguishes You?

• People can remember 1-2 things about your company.• Do you know what those are?

“_________ is a leading IT infrastructure provider to startups and small to mid-size businesses, delivering highly scalable hosting solutions that allow customers to focus on the possibilities of the Internet, not the problems. We provide award-winning Managed, Self-Managed, and Co-location hosting services through __ state-of-the-art data centers in __ cities across North America connected together by our ultra-fast network.”

Question: How many things are people being asked to remember in the positioning statement below?

• Different branding for different messages


SMBs willing to Pay $1,700 per Website

• Why?– Sales– Customers– Revenue

• How?– Most SMBs do not want to build their own website, no matter how

easy

• $1,700, Really?– $500 for basic site– $200 add a form– $300 add database integration– $250 add Flash and animations– $300 add counters – blogs – wikis - and other APS applications– $300 add SEO and other services


Marketing to Pragmatists & Conservatives

• Conservatives buy – but they buy differently from Early Adopters

Observe Messages• No mention of disk space• No guy standing in front of a

datacenter• “we do everything for you”• “affordable”

ConservativesPragmatists

Observe Price• $300 setup fee• $90 - $100 / month


Add-On Services

• If you cannot sell it, bundle it!– How do SMBs buy services?– Is each decision painful?

• SMBs like easy decisions– Easy: Silver, Gold, or Platinum– Hard: Amount of disk space, 20 individual applications, memory,

etc.

• What should I bundle?

Bundle It Add It On

EmailMarketing

Fax to EmailCMS

wikisBlogs

ForumsPhoto Gallery

SharedCalendar

FileArchiving

ShoppingCart

DataBackup


Add-On Examples

• Plesk Application Pack– Click-n-Build – bundles applications in plans for additional $1, $6, $16

per month per user

• Managed Backups with Acronis– Redplaid provides “Managed Data Backups” as part of a $180/month

with a dedicated server package

• Collaboration (SmarterMail, Open-Xchange Exchange)– Contacts, calendaring, mobile mail, anti-spam, anti-virus – sell at $3-

$12/month/user

• More– Many ISVs might be sitting right next to you with solutions that can

increase your revenue per customer and your profit margins


Where Can We Go Tomorrow?

VisionariesGeeks

Early Adopters



Shared Web Hosting

VPS Hosting Dedicated Hosting

Domain Registration

Mobile Web Creation/Hosting

Virtual Desktop

VPS with legal software suite

Webmail

Web Hosting in Minneapolis

Hosted Applications


Path to Winning High Value Customers

Paying Clients

Low ValueClients

Internally Hosted Businesses

High Value Clients

Leads / Prospects

Trial Participants

• Search Engine Optimization

• Advertising• Partnerships• Webinars

Actions to Take What to Track How to Track

• Site visits• Time per visit• Pages viewed• Navigation paths• Abandonment, exit

• Web analytics

• Newsletters• Mailings• Forums• Blogs

• Open rates• Click through rates• Forum and blog

logins and posts

• Email marketing software

• Blog and forum reports

• Sales Contact• User Conferences• Loyalty Programs• Surveys

• Conversion rates• Survey responses

• CRM software• Survey tools

• Partner Programs • Revenue growth• Churn rate

• Financial accounting software


What Will Attract a Customer?


What will attract customer: Message


What will attract a customer: Placement

• Heatmap – technique to see where eyeballs move on a webpage.– Webpage example– Google example


What will attract a customer: Placement

• Clickmap


Tracking Your Success• Use Clickmap

to place popular items in prominent locations

• Caution: are the clicks customers?

• Caution: are popularly clicked items helping you sell?


Tracking Your Success – other metrics• Web analytics provides much more than clickmaps:

– Page views– Single page visits– Average page time– Referring domains– Keywords– Browser type/size

• Caution– Web analytics does

not always know “bad” traffic from good

– see security.gov.sa, and I had to cut off some of the others


Converting Trials to Paying Clients

Paying Clients

Low ValueClients


High Value Clients

Leads / Prospects

Trial Participants





• Web analytics



logins and posts



• Sales Contact• User Conferences• Loyalty Programs• Surveys



• Partner Programs • Revenue growth• Churn rate



Email Marketing

• When a client provides an email address to download a 30-day trial … some follow up is required …

Timing* GoalEmail TitleWelcome Letter 0 days Welcome letter – describe where to get help and

describe benefits

Checking In 7 days Ensure prospect is using trial, describe benefits to explore

Trial Expiring 23 days Inform that trial is ending, prominently place enrollment link

Expiration In 1 Day 29 days Reminder that account will be terminated, enrollment link

Account Expired 35 days Thank user, see if they will (1) respond to a price offering or (2) complete a survey

• Sample programs and re-brandable letters are available for Parallels Automation customers

* Email program should identify whether person has enrolled or cancelled before sending an email


Email Examples

• JangoMail• ExactTarget• Pricing: $0.004 - $0.03 per email, depending on volume


Email – Integrated Inside Your Control Panel• Parallels Automation Promotions and Campaigns (price: $0.00)

Step 1: Create Promotion

Define prices, timing, applicable plans, and resources.

Step 2: Create Correspondence

Define delivery options, database fields, and format.

Step 3: Schedule Delivery

Define automated message delivery and conditions.

Step 4: Measure Results

Retrieve reports describing your campaigns.


Email Marketing – How Are You Doing?• Deliverables

– 90% - 95% of email should be delivered, bounces involve people leaving companies, signing up with incorrect address, etc.

• Typical Open Rates– 20% - 40% for opt-in email– Highest for niche topics, small lists– Lowest for large lists with less personal relationships,

newsletters– Most measurements based on downloading an image

• Click Rates– 10% of the people who open an email, will click a link

• How to Improve– Subject line is critical– Notice what appears in standard preview pane– Measuring clicks can reduce the number of clicks!– Send relevant and targeted information

send email

email delivered(90-95%)

email opened(20-40%)

link clicked(2-4%)


Blogging and Forums

• Encourage registered trial members to participate in your blog or seek help on your forums.

• Do not under-estimate the cost of maintaining them– Not talking about hosting or maintaining– Am talking about the cost of maintaining an active forum

• Keep clients separate from prospects– Clients need a place to go to escape the world wide web


Converting Trials to Paying Clients

Paying Clients

Low ValueClients


High Value Clients

Leads / Prospects

Trial Participants





• Web analytics



logins and posts



• Sales Contact• User Conferences• Surveys



• Loyalty Programs• SaaS Offerings

• Revenue growth• Churn rate



Conversion Rates

• Getting Trials is Important• Converting Trials to Paying Clients is More Important

• Typical conversion rate for free trial: 50-70%*• Typical conversion rate for automatic enroll: 60-70%

• What is happening to prevent conversion?

* source: MarketingExperiments.com


Survey Software

• Send clients a survey – Parallels did a SaaS survey to learn more about what you want.


Importance of Continuous Contact

• If people cannot enroll immediately, you will lose them• Almost 90% of people took action within 1 day of

visiting a website.• Purchase decision relies on constant contact

Purchase Timing - Website Visitors

0%

20%

40%

60%

80%

100%

<1 Day 1 Day 7 Days 14 Days 28 Days

Sign Up

Purchase


Converting Low Value Clients to High Value

Paying Clients

Low ValueClients


High Value Clients

Leads / Prospects

Trial Participants





• Web analytics



logins and posts



• Sales Contact• User Conferences• Surveys



• Loyalty Programs• SaaS Offerings

• Revenue growth• Churn rate



80% of Your Clients are Not Valuable

• Why?– They are struggling businesses?– They don’t really need your services?– Your are not following up and selling them more services?

• If you are not selling them more services, then you need to understand their pain points and continuously market new services– Give surveys– Institute loyalty and partnership programs– Invite your users to Parallels Summit!


SaaS – The Track to Higher Hosting Revenue

Customer Needs Web PresenceEmail E-commerce Collaboration Application Mgmt

Rev

enue

Opp

ortu

nity

(S

MB

: 20

Use

rs/M

onth

)

$10

$100

$1,000

DomainRegistration

$1-$3

Shared StaticWeb Hosting

$3-$10

Shared DynamicWeb , DB, Apps

$5-$20

Virtual PrivateServers

$15-$100

Dedicated & Managed Server

$100-$500

Business-Class E-mail(i.e. Hosted Exchange)

$150-$300

Add Business Collaboration(i.e. SharePoint, LCS, VoIP)

$200-$500

Advanced Apps(CRM, ERP, vertical)

$250-$1500+

Infrastructure

SaaS


Adding Additional Services

• Integrated Billing and Provisioning is the key to selling clients more services

• Parallels Automation maximizes up-selling

Customizable Box

Add marketing messages.

News WindowDisplay news and special vendor offers.

Email CampaignsTrigger emails based on service renewals or other mechanism. Include link to online store.


Thank you

• Key Points– Identify your audience, market frequently, pick a niche and win

• How Parallels Can Help– Parallels Automation includes up-sale capabilities– Parallels Business Automation includes integrated marketing

campaigns– SaaS initiatives and the APS Standard deliver ready-to-use

applications that already work with your Parallels control panels

Contact Details:Doug [email protected]

Parallels Hosting Products

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