Rick Schwartz had a post recently reminding everyone that it is all about the sales. It reminded me that domain sales are not based on real value but on perceived value. It is focusing on that perception that can help you maximize your sales and your profit.
Real versus perceived
Lets take the example of buying jeans. There is a real need and therefore a real value to getting hard wearing trousers. The real value is based on the jeans ability to take abuse and not wear out quickly and perhaps being comfortable to wear. Perceived value though comes from jeans being “cool to wear” and fashionable.
Brands
When choosing jeans, besides fit and appearance, brand name plays into the perceived value. When there are multiple competing products, the customers view of a brand will play into their decision to purchase.
Domain names real and perceived value
For an end user, the real value of a domain name lies in its use for a website as an address. While any domain will function as an address, those that are descriptive and easy to remember have greater value. Ideal domains should be
- as short as possible
- easily remembered
- descriptive of product or services
- distinctive (at least not easily confused with others)
These are the most important values to promote to your end users. Many potential customers need to be educated because much of this is not as public as we would like it to be.
Of course there are other factors in the valuation but sending a simple consistent message to the end user is important.
Be prepared
If you are selling domains through a website, shouldn’t you be sending a simple consistent message on perceived value to your potential customers? You could also categorize your domains and give a simple rational explanation for those categorizations.
I often sit down and describe in writing the ideal customer for a particular domain name. I then bin the domain names by ideal customer. I can then subdivide each bin by value. Then when I locate a customer, I can market a domain to them and also potentially up-sell them to a higher value domain in the same bin.
Again having planned ahead, you already have a rationale to support a higher valuation on a premium domain you are selling to this customer. Giving a customer a choice of domains within the category they are interested in especially at different price points maximizes your chance of a sale.
And as Rick says, it is all about the sales.
{ 3 comments… read them below or add one }
So many people still dont get what a domain is worth!
Endusers dont realise the value of owning these killer high traffic or generic name that does what it says.
Going to a large company and asking for $,$$$,$$$ most people laugh and say we paid $10 for our domain and it does the job we need it to do but when you explain if you owned x.com you could grow your business through pre-qualifed leads and high natural traffic there eyes light up but they still say well lets see the figures that prove it.
Yes you can supply traffic stats but with realtion to there product and the value it could bring there business is difficult to measure.
What Im trying to say is people and business shall have to change to reap the benefits of the powers of domains and hopefully they shall realise in the future.
Warm Regards,
Robbie
I agree that domain names unto itself doesn’t equate to sales but one based more on egoist perception that “I am the only person in the world that holds the most descriptive generic term in a category, therefore I am someone very special”
It’s how that domain name translates into a viable (and ground breaking) business model that can make a realistic ROI on the investment made into it. That’s how a typical business investor will see it, but that’s also the most challenging thing that a domainer out to make that sale will have to put hard thoght into. Which most don’t, frankly.
A domainer expects a buyer to appreciate some fantasy notion that a great name will create great success instantly. Tell that to Google.
Ouys, we need to think business model in this new economy turned upside down with a loss in trust in the basic fundamentals that have broken down on the people who manage the world’s wealth – not the old and overworn spin on ‘natural’ type-in traffic potentail, not the old lazy approach of just parking things and making passive incomes make hard work a joke, not the hundreds of hand-regged domains you think will earn you big bucks in a future unforseen, and then being able to flip over just one name.
These are incredibly sceptical times for markets like the States, work hard on your creative and new technology changing business models to add value to your names. a not ambiguous perceptions that, say. I own God.com, therefore the Internet is mine to rule.
The day has come for domainers to be marketers and business consultants, not fat big squatters on prime names.
Sorry if the truth hurts, but honestly this has become painfully apparent to me as I see this space evolve since starting my cybersquatting hobby in 2000.
Thanks for the comments. I agree with you both. There really needs to be a greater marketing and sales approach to domains rather than the passive approach with sales through webpages and auctions. I will pursue this a bit more through the blog in the new year.