Acquiring a new customer usually costs 5 times more than keeping one. In a mature market like domain names, building customer loyalty is definitely a great way to grow your overall sales.
Registrars invest a lot each year to acquire new customers: Adwords, SEO, partnerships, advertising (even TV ads for some), discounts, contests, and so on. The promotional means committed to doing that are often colossal. Having discussed with many retailers, I know that the profitability of all these operations is closely watched. Given the arbitrage operations that take place, one may indeed wonder about profitability.
Once again this year I interested myself in registering a domain name under the .fr TLD with several registrars and seeing what the life of an average customer is like. At Afnic, we also have close and regular contacts with many registrars. That proximity allows us to see the commercial differences between the players, especially when we also have the performance figures in terms of renewal for each of them. I propose to share with you the results of the experiment:
Registering a domain name under the .fr TLD
I registered an .fr domain name for the first time with a registrar. That’s where everything started: first payment, first customer experience. But in fact, did I really come just to buy a domain name? In my case, no doubt yes, but in the case of customers in general: why do they only buy a domain name? What is their goal? The role of Registrars is not just to register domain names with the Registry. Their role is to support future holders, entrepreneurs, company managers, associations, etc. in their use of the domain name. It is also very often thanks to the products sold with domain names that hosts, ISPs, IPAs, web agencies and all the others make a profit. Once more I repeat, “Stop selling domain names”: sell services that include a domain name.
The experience of buying a domain name is an interesting one, but for some newcomers it must be an obstacle course if DNS, anycast, shared hosting, etc., are not part of their vocabulary. It’s a shame to have people give up on a landing page when the traffic comes from search engine advertising (SEA) because our jargon is intimidating (“it’s too complicated to have a personalized email address”).
In terms of purchase clickstreams and interfaces, however, there has been considerable and blatant progress over the last three years. For example, as far as registering a domain name under the .fr TLD is concerned, I might remind you that the date and place of birth or company registration number (SIREN) are no longer necessary. If you still ask for this information in your clickstream, Afnic no longer requires this information. This is where and how loyalty starts: an excellent first impression that makes the netizen want to use the tool every day.
Playing with the registration period
The duration of the registration period is a good initial lever for securing customer loyalty. While it is obvious that the rates are lower for 1 year, simply by enabling registration for several years you guarantee you are immediately paid several years of turnover and it gives you more time to convert the customer to services with higher added value. I was really surprised by the rarity of the players who invited me to register the domain name for several years, without having to delve too far into the purchase options. But if I have a project that is sound and I want a website for my company, committing for 2 years or more is a relevant option (especially if I can have a discount on the total amount). Yes, I know, the annual fee for registering a domain name under the .fr is the same for 1 year or 10 years. But if you want to develop your value-added sales, including a specific use for customers, Afnic is ready to do business intelligently. Contact me!
Suppose we solve the problem at the root with automatic renewal?
If the customer registers the domain name with a secondary email address that they do not necessarily often consult (yes, I know: it’s a mistake!) … but to which the registrar sends all of their communications and reminders at D-60, D-30, etc., the customer will never see the reminders and it may be that the domain name (which they probably have not used in the year) will end up being deleted at the end of it. To remedy this type of situation, many of you have opted for the automatic renewal of domain names: At the time of the acquisition, you ask for your new customer’s authorization to automatically debit the fee for the renewal of the domain name, each year on the anniversary date, via the bank card used to pay the initial registration fee. The system works well. Those who have used it have a net improvement in the renewal rate for .fr domain names. In addition, although I had mixed opinions about the practice, after discussing with several registrars, I found out that it even helped to improve the overall satisfaction rating. Some customers complain of course about being charged for the domain name when they no longer want it (but are only debited a sum somewhere between €5 and €15 for a service they will be able to use for another year); but in general, customers are usually happy not to lose their domain names.
Also, when customers use their domain names, it is no longer the domain name they renew, it is their website or their personalized email address! In this case, automatic renewal is a “must have”.
The best prevention against churn: use!
So I registered domain names with several registrars. I admit I have not used them for much, except this blog. I often registered them for a few euros (and even less than one euro). It did not cost me much personally. I know, however, that my purchase represented an acquisition cost (although marginal) for the registrars with whom I bought my .fr domain names. The overall assessment for the first 6 months after registration is quite striking: two called me to find out what I intended to do with my domain name, one sent me a letter, two added me to their monthly newsletters sent by email, and all the others (i.e. a dozen) abandoned me with my domain name. Contact is not a catch-all that solves every problem; what matters is the use made of the domain name, and nothing but the use. In my case, I had still not used them for anything after six months. That should have been a warning. I know that I am not alone in this case (we also monitor the use statistics for domain names under the .fr): whole cohorts of inactive customers are ready to bring down your renewal rate each month, for lack of use of their domain names (registrar readers: if you want to know more about your customers, contact me direct).
The best practice is to set up an email address using the registered domain name as soon as the customer has registered. At least you can offer an instantaneous redirect to one of the customer’s social network accounts as soon as they have registered. That is the minimum service. Some registrars go a little further and offer to a replace the availability search bar by an email search bar (i.e. searches if firstname.lastname@example.org is available instead of vigreux.fr. If the email address is available, you register the domain name and parameter the email address for the customer). Better still: you generate a showcase page with the key information about the customer, and invite them to subscribe to other services to develop their website.
In a “mobile first” approach, inviting customers to follow a readily available tutorial to set up their mailbox on their phone is an excellent practice which should be used on a much wider scale. All more so in that customers who almost all arrive with an email address from an email provider, are often used to the interface of their provider. Why not immediately give them the information to easily and immediately set up their service, or even better, encourage them to do so? (“Set up your email today with your domain name and benefit for one year from such and such an additional service or product free of charge”). Converting newcomers to using their domain names must be a “one-shot” operation: The automatic setting of the email address, website or redirect must be done (ideally) during the purchase, to encourage the user to use these new services.
In conclusion, you need to simplify the experience of newbie customers to show them that it’s easy and to engage them with an added-value use from the first moment of their lives as customers.
To recap, here are the key points I have retained to improve the renewal rates of your customers’ .fr domain names and their satisfaction:
- Sell uses rather than products (“Buy hosting” vs “Buy your website”, “register your personalized email” vs “one .thing for €1 instead of €19“)
- Sell with words my grandmother would understand (“website, email address” vs “anycast, dnssec”)
- Simplify the purchase clickstream as much as possible by keeping only the information necessary for registration: Business name or surname + name, postal address, email address and telephone number
- Offer and encourage domain name registration for several years
- Offer the automatic renewal of domain names to secure the customer’s portfolio
- Encourage the customer to set up the basic uses as soon as they have registered, i.e. email address, redirect or website