sales Why Are Companies Reluctant to Spend Money on a Good Domain?

[Whizzbang]

The last article on “Underpinning Domain Sales” sparked an interesting discussion on the domain forum, NamePros. One of the respondents asked the question, “Why are companies reluctant to spend money on a good domain?” In this article, I hope to answer that question.

In my opinion, the dominant reason businesses don’t spend money on domain names is because of ignorance. On the whole the domain industry has not been able to mobilise itself and communicate cooperatively to businesses about the importance of domain names. I’d like to unpack this a little further.

The biggest problem has always been the question of whom should put up the PR/Marketing money to generate interest and understanding in domains. Some people point to the registries, others the registrars while others say the current domain owners should all chip in. These discussiona often degenerate into name-calling and a lot of inaction.

What domain investors need to appreciate is that once they have purchased a domain name the registries and the registrars have effectively done their job. There is NO incentive for them to try and market on behalf of existing owners to increase the demand for already registered domains so the price goes up. That’s an almost impossible job.

The job of registries and registrars are to convince existing owners to renew and to get new registrations from wherever they can. On the whole, new gTLD registries have been excellent at selling their product to the domain investor constituency based on scarcity. “If you don’t buy this domain you’ll miss out like you did in the .com rush.”

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[frank-germany]

Haha, so funny. I think you should take a break from reading DN Journal for a little while...

but still he is right

 

[joro001]

Interesting thread, it really shows the difference between domainer and end user mentality with some posts.

On a personal level any project we've launched online that hasn't worked as desired had 0 to do with the domain name contributing to that in a way that we could easily verify anyway. Frankly we've been very happy with what we've used in terms of domains whether they were reg fee or like recently when we bought a category killer domain from a member of this forum for $5k + fees. It all depends on the project and what we wanted to achieve.

Of course in certain situations a good domain can be very worthwhile to build on but make no mistake many end users couldn't care less either way. I know companies that have built million $ businesses on the most trashy names and one in particular is a marketing genius but to him a domain name is completely unimportant, he's crushed it online for over a decade.

It's funny but when we get spammy outbound emails trying to educate us about the value of owning or upgrading to xyz it is like someone mentioned before like a child trying to educate an adult. Most of these emails are from people that have never done a day's work in their lives, never mind run a business. Yeah I really want to be educated about my business by a domainer lol. I agree with a poster before that the one area a domainer can actually do something of use if interested in a domain is to tell me what traffic the name gets. That can add value to my business in a way that is easy to crunch down figures on and do some projections. All the rest is just noise and a pain in the neck when I get these outbound emails.

 

[chayan1111]

Great points , but one main reason is because of the wide variety of domain extensions available . Only large corporates or ecommerce websites focus on .com's .

 

[Nuno Guedes]

Great Reading...

 

[VaibhavA]

God forgive them, for they do not know what they are doing.

 

[Kate]

I really think you underestimate business owners. Maybe I'm mistaken, but I think the majority of business owners have a basic understanding of domain names. They know they are going on their ads, they know they are going on their refrigerator magnets or whatever...of course they want a decent domain, but they aren't going to spend the same amount of money as a new car for one. So how exactly are 'educating' them?

I'm afraid most end users have a poor grasp on the Internet actually, and they actually rely on the webmaster guy, who is never an expert at branding. If he is actually doing SEO right consider yourself lucky. Web development is plagued by amateurism. That's one reason why so many end users have bad domains.

Anyway, it's ridiculous to spend lots of money on advertising (online/offline) and balk at buying a good name, that is your permanent business card on the Internet. Advertising a bad name heavily is draining money.

If you look at the most successful companies of our times, they usually all have great, short, sharp, memorable names and it's not by chance.

There is only one thing a domain seller would ever need to educate a potential buyer upon, and that is whether or not, and to what degree, the name gets traffic.

Traffic, whether it be natural "type in", or something else, is a marketing value that all business owners will readily appreciate.
...

That's an interesting thought. Of course traffic can be natural (type-in) or artificial (advertising) but it's going to be easier to drive traffic to names that are memorable. Obviously some names are more memorable than others. Relying on Google is dangerous because competitors could rank higher, not to mention the ads diverting you to competitors.

On the other hand it's true that many end users, especially small businesses, don't really need outstanding domains. But it can't hurt. If they grow bigger, then there can be pressure to rebrand.

 

[tomcarl]

Simple really....

Show me a man who settles for another domain name rather than the perfect domain for his business and is within his financial reach, and I'll show you a man that settles in most other aspects of his life.

 

[todaygold]

I'm afraid most end users have a poor grasp on the Internet actually, and they actually rely on the webmaster guy, who is never an expert at branding. If he is actually doing SEO right consider yourself lucky. Web development is plagued by amateurism. That's one reason why so many end users have bad domains.

Anyway, it's ridiculous to spend lots of money on advertising (online/offline) and balk at buying a good name, that is your permanent business card on the Internet. Advertising a bad name heavily is draining money.

Most businesses want a domain that somewhat matches their company name...so asking your amateur webmaster isn't that terrible of an idea. Even an idiot can register a domain that has the company name in it.
And I suppose it depends on your business. But if you are running 'Andrews Furniture Shop'...putting 'AndrewsFurniture.com' versus 'AndrewsFurnitureShop.com' on your business cards and advertising isn't going to make that much of a difference. Businesses don't advertise just to show off their domain name...they advertise to show their sales, what they offer, etc.
Like you said in your other post (namepros.com/threads/how-to-find-domain-buyers.1003916/#post-6022947)...if you have a good domain name, it will sell. So why some business is reluctant to spend $15,000 on a domain name when they are just starting up shouldn't matter...if your domains are that bad that you have to go beat down the doors of every new business owner...than the problem is on you, not the business owners.

 

[Joe N]

Most businesses want a domain that somewhat matches their company name...so asking your amateur webmaster isn't that terrible of an idea. Even an idiot can register a domain that has the company name in it.
And I suppose it depends on your business. But if you are running 'Andrews Furniture Shop'...putting 'AndrewsFurniture.com' versus 'AndrewsFurnitureShop.com' on your business cards and advertising isn't going to make that much of a difference. Businesses don't advertise just to show off their domain name...they advertise to show their sales, what they offer, etc.
Like you said in your other post (namepros.com/threads/how-to-find-domain-buyers.1003916/#post-6022947)...if you have a good domain name, it will sell. So why some business is reluctant to spend $15,000 on a domain name when they are just starting up shouldn't matter...if your domains are that bad that you have to go beat down the doors of every new business owner...than the problem is on you, not the business owners.

You seem to be overly focused on brick and mortar retail stores...

 

[todaygold]

You seem to be overly focused on brick and mortar retail stores...

For most online businesses, it's even less important. Having 'BillsSneakers.com' versus 'BillsSneakerShop.com' isn't going to make a big difference. People are going to find your business through a search. And as for marketing...most online businesses will be marketing on Facebook, Google Ads, etc. In which case, customers are simply going to click the ad and be taken to your website...they're not going to hand type your website in from the domain.

 

[TRY]

For most online businesses, it's even less important. Having 'BillsSneakers.com' versus 'BillsSneakerShop.com' isn't going to make a big difference. People are going to find your business through a search. And as for marketing...most online businesses will be marketing on Facebook, Google Ads, etc. In which case, customers are simply going to click the ad and be taken to your website...they're not going to hand type your website in from the domain.

BINGO! In my personal experience as well as many case studies online in regards to sem perform a and b testing on 2 different domain names, and guess what was the conclusion,...The right domain name Will Save you money on advertising due to various factors not the least of which is a higher click through rate, ....Not a big deal if your spending less $100 a day on SEM, but if your spending thousands a day then the savings add up,...

 

[frank-germany]

But if you are running 'Andrews Furniture Shop'...putting 'AndrewsFurniture.com' versus 'AndrewsFurnitureShop.com' on your business cards and advertising isn't going to make that much of a difference.

no only about $100 K USD

 

[frank-germany]

BINGO! In my personal experience as well as many case studies online in regards to sem perform a and b testing on 2 different domain names, and guess what was the conclusion,...The right domain name Will Save you money on advertising due to various factors not the least of which is a higher click through rate, ....Not a big deal if your spending less $100 a day on SEM, but if your spending thousands a day then the savings add up,...

exactly

 

[todaygold]

no only about $100 K USD

I'm assuming you mean you save 100k on the domain name purchase.

but if your spending thousands a day then the savings add up,...

You guys must REALLY have your head in the clouds. Very few businesses, especially startups, can afford to spend THOUSANDS OF DOLLARS PER DAY on advertising. That would equal a $1,000,000+ a year...most small businesses and startups don't even take in that much in a year. Try coming back to reality and understand that not everyone makes millions a year.

 

[frank-germany]

I'm assuming you mean you save 100k on the domain name purchase.



You guys must REALLY have your head in the clouds. Very few businesses, especially startups, can afford to spend THOUSANDS OF DOLLARS PER DAY on advertising. That would equal a $1,000,000+ a year...most small businesses and startups don't even take in that much in a year. Try coming back to reality and understand that not everyone makes millions a year.

if I earn $100 USD spending $1000 USD / day
I would spend as much as I could

 

[todaygold]

if I earn $100 USD spending $1000 USD / day
I would spend as much as I could

Wow, I guess you like throwing away money. If I had to spend $1,000/day to get $100...I would stop spending immediately. But you know what they say...there's a sucker born every minute.

 

[Jv1999]

It depends entirely on the domain you have.

I have a few projects in mind for websites in the long term. But some projects I could care a little less about, so the domain name doesn't matter. For example, a blog I was going to start doesn't need a super domain name. if ____news or ___magazine is taken, then I'll just come up with a random brandable handreg. it's not like i'm aiming for a specific niche EMD.

But for my one other project it's a bit more dear to me, and it has a certain theme to it that requires a certain variety of domains that I'd need to pay more than handreg for. or i can decide to be thrifty and go for those really cheap tlds like .stream that have the domain name avail but have that weird extension.

 

[Lox]

head in the clouds

Yes, for businesses within the "Home Field" that have loss of appetite for expansion (employing more people to help more people). Local buy & go vegetable shop with the effective radius of 1 mile.

 

[frank-germany]

Wow, I guess you like throwing away money. If I had to spend $1,000/day to get $100...I would stop spending immediately. But you know what they say...there's a sucker born every minute.

we are talking in different tongues my friend

 

[Registry Services]

It's not important my examples but i'm telling you on the occasions as an end user i've emailed others if price is too high I move on quick.

I agree - I've paid mid-5 figures for a single name that I felt was worth it, but recently I was offered one overpriced and they wouldn't budge, so I walk on by.

There's a lot more choice these days and not every market sector needs the gold plated dot-COM - in fact I was only trying to get the dot-COM as a defensive registration - the product in question is aimed into the TV arena, so the dot-TV works better for me.

Ironically, if my business works, it will raise the value of the brand name and the guy might get what he's asking for the dot-COM.

 

[frank-germany]

.. and the guy might get what he's asking for the dot-COM.

no - but 10 times more

 

[Registry Services]

the owner needs
to spend less for marketing

For the local pizza shop, spending $10K on a dot-COM or $10K on local fliers - it's pretty much a no-brainer which will bring in more business

 

[frank-germany]

For the local pizza shop, spending $10K on a dot-COM or $10K on local fliers - it's pretty much a no-brainer which will bring in more business

don't target markets w/o deep pockets

nobody said we need to convince the small, uneducated guy

 

[Registry Services]

no - but 10 times more

if my business is so successful the value of his domain goes up by 10x , I won't care any longer

 

[Registry Services]

nobody said we need to convince the small, uneducated guy

but like the man said, SME's are the vast majority of all businesses.