The best way to get business at first is by offering your service locally instead of trying to compete with a larger host's advertising finances.
I agree with you. What I want to add is that in the beginning small companies should focus on offering great support and care for their customers. If they start locally as you suggested, it is easier to even meet the customer face to face when a problem occurs and thus show that you are preocupied by making everything work just fine.
Does driving an hour and a half on Sunday afternoon to help settle down an irritated customer and getting everything resolved in their living room count as being preoccupied with support?
I had a customer who had been with me for about 5 months. She called me up on Sunday morning and told me she was unable to publish her site with FrontPage. I tried to walk her through some diagnostics and she didn't live extremely far from me I asked her if it'd be better if I came to her and helped her out. She was thrilled that I'd do such a thing and was happy when I left.
Now this brings me to a question I'd like to ask other hosts...do you find getting customers to actually post testimonials and/or reviews difficult? I have customers who tell me they will do it but never do it. I don't feel right offering bribes to get them to post reviews because then i fear they will be biased. Does anyone else have this problem? I know if I tried to get the above customer to do it, she'd tell me for months she was going to do it but never had time.
Support is key. I know I am extremely impatient and can't wait 5 minutes sometimes. As soon as I get a support request I stop what ever I'm doing and address it. I have taken precautions so if I'm unavailable someone else is available to answer the support request. I also have forums on my web site in hopes that customers will post their requests there and others can learn from them. I monitor the forums as constant as I monitor my email and phone calls.
The other thing I'd highly recommend to new hosts is to watch out for the reseller accounts. I have found that leasing a dedicated server from a reputable provider has kept my support headaches down to almost none. I am not at the mercy of someone else to fix things if something goes down on the server. Of course, my primary income is from server management, so I have the necessary skills to manage the servers properly.
If you do lease a dedicated server make sure you have the skills to do so properly and if not have someone on hand who does.
just me 2 cents