Converting Clients to Customers

1. Converting Clients to Customers Marketing to Clients Visiting Your Website Douglas Johnson Marketing Director, Parallels

2. 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. Parallels Service Provider Solutions

3. Hosting Trends and Opportunities Market Trend Key Players Parallels Driven Opportunities 16% Growth per year is expected through 2011 Parallels helps optimize your computing resources to minimize your costs and maximize up-selling and revenue. Virtualization is improving hosting efficiency Integrated automation and virtualization products provide an improved hosting infrastructure and customer services. 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. Windows Apps provide revenue opportunities Parallels helps you launch Exchange, SharePoint, and CRM to provide high revenue services. Parallels Service Provider Solutions

4. Geeks Visionaries Pragmatists Conservatives Skeptics Early Adopters Mainstream Market ($$) Unknown Marketing Bell Curve “The Chasm” Goal: Be the market leader when a product or solution “crosses the chasm” Source: “Crossing the Chasm” and “Inside the Tornado” by Geoffrey Moore Parallels Service Provider Solutions

5. 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) Conservative b) Pragmatist d) Skeptic Parallels Service Provider Solutions

6. 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. Secure Hosted CRM Free trials, 5 layers of server security Uptime metrics and SLA www.secureCRM.com Parallels Service Provider Solutions

7. Yahoo Finance –Web Hosting Question: Where is web hosting in the product marketing cycle? 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. Parallels Service Provider Solutions

8. Pragmatists Conservatives Skeptics Mainstream Market ($$) Unknown Where We Are Today? Shared Web Hosting VPS Hosting Dedicated Hosting Domain Registration Webmail Geeks Visionaries Early Adopters • 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 Parallels Service Provider Solutions

9. Your Target Market - SMBs • Question: What are SMB Problems and Concerns? • Study by NIFB (National Federation of Independent Business), 2001 • How Difficult Are Their Problems? • Survey by Zeryn of Small Business in Service Areas, 2005 Parallels Service Provider Solutions

10. What Distinguishes You? • People can remember 1-2 things about your company. • Do you know what those are? Question: How many things are people being asked to remember in the positioning statement below? “_________ 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.” • Different branding for different messages Parallels Service Provider Solutions

11. 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 Parallels Service Provider Solutions

12. Marketing to Pragmatists & Conservatives • Conservatives buy – but they buy differently from Early Adopters Pragmatists Conservatives • Observe Messages • No mention of disk space • No guy standing in front of a datacenter • “we do everything for you” • “affordable” • Observe Price • $300 setup fee • $90 - $100 / month Parallels Service Provider Solutions

13. Shared Calendar Shopping Cart wikis Blogs Forums Fax to Email Email Marketing File Archiving Data Backup Photo Gallery CMS 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 Parallels Service Provider Solutions

14. 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 Parallels Service Provider Solutions

15. Pragmatists Conservatives Skeptics Mainstream Market ($$) Unknown Virtual Desktop Web Hosting in Minneapolis Mobile Web Creation/Hosting VPS with legal software suite Hosted Applications Where Can We Go Tomorrow? Shared Web Hosting VPS Hosting Dedicated Hosting Domain Registration Webmail Geeks Visionaries Early Adopters Parallels Service Provider Solutions

16. Path to Winning High Value Customers Internally Hosted Businesses Actions to Take What to Track How to Track Leads / Prospects • Search Engine Optimization • Advertising • Partnerships • Webinars • Site visits • Time per visit • Pages viewed • Navigation paths • Abandonment, exit • Web analytics Trial Participants • Newsletters • Mailings • Forums • Blogs • Open rates • Click through rates • Forum and blog logins and posts • Email marketing software • Blog and forum reports Paying Clients • Sales Contact • User Conferences • Loyalty Programs • Surveys • Conversion rates • Survey responses • CRM software • Survey tools Low Value Clients • Partner Programs • Revenue growth • Churn rate • Financial accounting software High Value Clients Parallels Service Provider Solutions

17. What Will Attract a Customer? Parallels Service Provider Solutions

18. What will attract customer: Message Parallels Service Provider Solutions

19. What will attract a customer: Placement • Heatmap – technique to see where eyeballs move on a webpage. • Webpage example • Google example Parallels Service Provider Solutions

20. What will attract a customer: Placement • Clickmap Parallels Service Provider Solutions

21. 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? Parallels Service Provider Solutions

22. 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 Parallels Service Provider Solutions

23. Converting Trials to Paying Clients Internally Hosted Businesses Actions to Take What to Track How to Track Leads / Prospects • Search Engine Optimization • Advertising • Partnerships • Webinars • Site visits • Time per visit • Pages viewed • Navigation paths • Abandonment, exit • Web analytics Trial Participants • Newsletters • Mailings • Forums • Blogs • Open rates • Click through rates • Forum and blog logins and posts • Email marketing software • Blog and forum reports Paying Clients • Sales Contact • User Conferences • Loyalty Programs • Surveys • Conversion rates • Survey responses • CRM software • Survey tools Low Value Clients • Partner Programs • Revenue growth • Churn rate • Financial accounting software High Value Clients Parallels Service Provider Solutions

24. Email Marketing • When a client provides an email address to download a 30-day trial … some follow up is required … Email Title Timing* Goal * Email program should identify whether person has enrolled or cancelled before sending an email • Sample programs and re-brandable letters are available for Parallels Automation customers Parallels Service Provider Solutions

25. Email Examples • JangoMail • ExactTarget • Pricing: $0.004 - $0.03 per email, depending on volume Parallels Service Provider Solutions

26. Email – Integrated Inside Your Control Panel • Parallels Automation Promotions and Campaigns (price: $0.00) Step 1: Create Promotion Step 3: Schedule Delivery Define prices, timing, applicable plans, and resources. Define automated message delivery and conditions. Step 2: Create Correspondence Step 4: Measure Results Define delivery options, database fields, and format. Retrieve reports describing your campaigns. Parallels Service Provider Solutions

27. Email Marketing – How Are You Doing? send email • 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 email delivered (90-95%) email opened (20-40%) link clicked (2-4%) Parallels Service Provider Solutions

28. 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 Parallels Service Provider Solutions

29. Converting Trials to Paying Clients Internally Hosted Businesses Actions to Take What to Track How to Track Leads / Prospects • Search Engine Optimization • Advertising • Partnerships • Webinars • Site visits • Time per visit • Pages viewed • Navigation paths • Abandonment, exit • Web analytics Trial Participants • Newsletters • Mailings • Forums • Blogs • Open rates • Click through rates • Forum and blog logins and posts • Email marketing software • Blog and forum reports Paying Clients • Sales Contact • User Conferences • Surveys • Conversion rates • Survey responses • CRM software • Survey tools Low Value Clients • Loyalty Programs • SaaS Offerings • Revenue growth • Churn rate • Financial accounting software High Value Clients Parallels Service Provider Solutions

30. 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 Parallels Service Provider Solutions

31. Survey Software • Send clients a survey – Parallels did a SaaS survey to learn more about what you want. Parallels Service Provider Solutions

32. 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 Parallels Service Provider Solutions

33. Converting Low Value Clients to High Value Internally Hosted Businesses Actions to Take What to Track How to Track Leads / Prospects • Search Engine Optimization • Advertising • Partnerships • Webinars • Site visits • Time per visit • Pages viewed • Navigation paths • Abandonment, exit • Web analytics Trial Participants • Newsletters • Mailings • Forums • Blogs • Open rates • Click through rates • Forum and blog logins and posts • Email marketing software • Blog and forum reports Paying Clients • Sales Contact • User Conferences • Surveys • Conversion rates • Survey responses • CRM software • Survey tools Low Value Clients • Loyalty Programs • SaaS Offerings • Revenue growth • Churn rate • Financial accounting software High Value Clients Parallels Service Provider Solutions

34. 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! Parallels Service Provider Solutions

35. SaaS – The Track to Higher Hosting Revenue Advanced Apps(CRM, ERP, vertical)$250-$1500+ $1,000 Add Business Collaboration(i.e. SharePoint, LCS, VoIP)$200-$500 SaaS Business-Class E-mail(i.e. Hosted Exchange)$150-$300 Dedicated & Managed Server$100-$500 Revenue Opportunity (SMB: 20 Users/Month) $100 Virtual PrivateServers$15-$100 Infrastructure Shared DynamicWeb , DB, Apps$5-$20 Shared StaticWeb Hosting$3-$10 DomainRegistration$1-$3 $10 Application Mgmt Email Web Presence E-commerce Collaboration Customer Needs Parallels Service Provider Solutions

36. Customizable Box Add marketing messages. News Window Display news and special vendor offers. Email Campaigns Trigger emails based on service renewals or other mechanism. Include link to online store. Adding Additional Services • Integrated Billing and Provisioning is the key to selling clients more services • Parallels Automation maximizes up-selling Parallels Service Provider Solutions

37. 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 Johnson 703-995-6221 djohnson@parallels.com Parallels Service Provider Solutions