discuss Pricing psychology and strategies

[MrMDMF]

As I'm sure we all are, I'm still, and forever, learning how to price my domains at face value correctly when potential buyers reach a landing page.

I assume pricing between 999 and 4999 is a sweet spot and a good starting point, especially for negotiation practices regarding the make-offer route for an end user.

Right now, I'm experimenting between 1,499 for 'standard' domains, 2,499-4999 for 'above average domains' (In my opinion), and 4999 for domains I'm currently performing outreach on; I'm hoping the higher price point comparatively to my other domains will spur on negotiations, but I have concerns it will completely deter them from contacting me back as it is 'out of their budget' My one outlier is a tech-focused 'vessel' domain which I have NO IDEA how to price so it's listed at 14999, you know... Just in case

For outreach, I also have my Atom WLM linked in my signature so they can check out my portfolio. I'll be conducting stat-tracking and heat maps for further clarity. Still, right now, I'm just following in the footsteps of my fellow domainers.

Let's discuss the psychology behind pricing and share insight into how we price our domains.

 

[cooljub]

First & foremost, I make sure my names are the very best they can be on my budget. Then I price them in the future, to a time where companies see the value in spending half the salary of one low-paid employee on their name. Then I wait (and not be tired by waiting). And I totally moonshot my best ones.

This strategy has not been very successful so far, and it will probably change next week.

 

[MrMDMF]

First & foremost, I make sure my names are the very best they can be on my budget. Then I price them in the future, to a time where companies see the value in spending half the salary of one low-paid employee on their name. Then I wait (and not be tired by waiting). And I totally moonshot my best ones.

This strategy has not been very successful so far, and it will probably change next week.

We love a good moonshot

That's a good insight. I think constantly adjusting prices doesn't fit the aesthetic of a 'luxury' product like a 4-6 figure domain. You're selling a brand, a dream to some, maybe something they've been planning for years that could change their life if executed correctly. No shame in being confident in a high price and sticking to it, even if it might be too rich for some.

 

[biggie]

psychology behind pricing

Hi

profit is made on the buy side,
because you already have idea of how much it could sell for.

when you start off buying names all willy nilly, with no preconceived notion of who would buy the name and how it could be used...then you're following in the footsteps of failure.

i try to buy domains that everybody, including names that other domainers would buy.
and i'll sell to anybody, even to other domainers, if/when a suitable offer is made.

imo...

 

[MrMDMF]

I've found some excerpts from a pricing PDF guide on the website kolenda.io. The authors seem to study the psychology of marketing and sales. I'll send the link to anyone interested. He might be full of ****, so who knows? Take these with a grain of salt.

Here's some findings

"Don’t Discount Premium Products.
Emphasize the quality of your product instead. Luxury discounts are usually harmful:
Weaker Brand. Customers buy luxury brands to boost status. Discounts tarnish this status because the brand is more accessible to a wider audience.
Price Sensitivity. Customers focus on price rather than quality, and luxury products don't win on price.
More Likely to Wait. Customers are more likely to waitfor the next discount, especially for premium products(Wathieu, Muthukrishnan, & Bronnenberg, 2004).

Wathieu, L., Muthukrishnan, A. V., & Bronnenberg, B. J. (2004). Theasymmetric effect of discount retraction on subsequent choice.Journal of Consumer Research, 31(3), 652-657."

"Be Precise With Large Prices
Highly precise numbers feel smaller

Based on 27,000 real estate transactions, specific prices (e.g.,$362,978) are more effective than rounded prices ($350,000;Thomas, Simon, & Kadiyali, 2007).

Why? Maybe buyers are less likely to negotiate? That’s what I thought — but nope. We just associate precise numbers with small values.

Think about it. You’re more likely to use specific numbers when dealing with small numbers (e.g., 1, 2, 3). These prices just feel smaller.

Thomas, M., Simon, D. H., & Kadiyali, V. (2007). Do consumers perceiveprecise prices to be lower than round prices? Evidence fromlaboratory and market data. Johnson School at Cornell UniversityResearch Paper, (09-07)"

Choose Prices With Fewer Syllables
Subconsciously, phonetic size feels like numerical size.

Prices seem cheaper with fewer syllables (Coulter, Choi, and Monroe, 2012).

Consider two prices:
$27.82: Twenty-seven eighty-two (7 syllables)
$28.16: Twenty-eight sixteen (5 syllables)

Intriguingly, $28.16 feels numerically smaller because of its smaller phonetic size. You don’t need to say the price out loud—your brain encodes the phonetic version regardless (Dehaene, 1992).

Coulter, K. S., Choi, P., & Monroe, K. B. (2012). Comma N’cents in pricing:The effects of auditory representation encoding on price magnitudeperceptions. Journal of Consumer Psychology, 22(3), 395-407.Dehaene, S. (1992). Varieties of numerical abilities. Cognition, 44(1-2),1-42."

Blog post relating to it domaining:

https://jamesnames.com/2022/09/pricing-psychology-for-domain-names-is-362978-better-than-350000/

I have no idea if these studies hold up today, but it's an interesting thought experiment to price your domains at random, phonetically pleasant prices.

 

[Molly]

Pricing has been on my mind a lot recently, too. I feel like some of my prices are weird (like 6188), but feel very unsure of what would be better.

 

[MrMDMF]

Hi

profit is made on the buy side,
because you already have idea of how much it could sell for.

when you start off buying names all willy nilly, with no preconceived notion of who would buy the name and how it could be used...then you're following in the footsteps of failure.

i try to buy domains that everybody, including names that other domainers would buy.
and i'll sell to anybody, even to other domainers, if/when a suitable offer is made.

imo...

I agree. You should only buy domains for which you have a rough margin of what they could go for. It's a strong belief that your asset is valuable today and over time.

To play devil's advocate and from a beginner's perspective, it's hard to price names you already see value in - there's a steep difference in quality and marketability between a four-figure domain that's $1000 and one that's $8000

I had a quick check on your website in your signature; you don't list prices at all. I assume this is because you let the name advertise/sell itself and, based on several factors, will accept a price that suits you.

I will say that's a clever marketing strategy—rather than advertising a price—subtly communicating to the buyer, 'Hey, this is the price; I've assigned a value to it; you might think it's higher or lower, so please consider it if you want to buy from me.' You've shifted the entire buyer-seller paradigm to 'Here's my domains, you make the effort of picking a price, and I'll decide if it's good enough.'

 

[biggie]

Hi
here's some psych for you.

if you set BIN price for your name at gobaddy and the appraised amount is less than your BIN -
then
how likely would someone buy it at that amount?

and on other side of that coin...

if you set BIN price for your name at gobaddy and the appraised amount is higher than your BIN -
then
how likely would someone buy it at that amount?

in other words, do you think their appraisal tool values, affect potential buyers' decisions?

imo....