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Stop selling domain names!

Home > Observatory and resources > Expert papers > Stop selling domain names!

It may seem insane and out of place to say that, but I’m saying it all the same!

A little more than a year ago I started to become acquainted with the world of domain names, and I must admit I’ve learned a lot with you, both in technical terms (which were totally alien for me) and from the commercial point of view. In a market that is now mature and on which the competition has heated up with the mass opening of new gTLDs, it is clear that the players are going to have to change strategy to keep their momentum.

Over the past year, I’ve seen plenty of papers, tweets, and Facebook posts of the “.funny TLD at a funny price” or the “.serious TLD for serious people” type. If we are to believe the ntldstats statistics, the stock of names is growing as the new TLDs arrive, but the sales are not doing likewise. The remark about communication also applies to ccTLDs. The double-digit growth in ccTLDs that still applied yesterday needs to be revamped with new ideas and best practices. I don’t pretend to have a magic solution to retrieve double-digit growth, only the findings and souvenirs of 8 years of business development and operational marketing in another industry.

If the new gTLDs are cutting each other’s throats in terms of audacity and ingenuity to gain a name in the market, with series of ultra-aggressive promotions (there are plenty of domain names going for less than € 1 in promotions when they normally sell for over € 10) and hysterical communication campaigns, one can legitimately ask whether any of these free or virtually free names will ever be renewed, while the ccTLDs and dotcoms of this world continue to sell perfectly well without any promotional effort. That also applies to the renewal of gTLDs that play on the defensive strategies used by brands.  A single domain name is not really of much use.

Lowering prices to maintain sales

I am often invited by registrars to carry out co-marketing operations, and I am delighted that is the case: keep on coming! The proposal usually involves jointly lowering our prices to offer .fr TLDs free of charge or sell them at very low prices. But we are in a market where price elasticity is not self-evident. Registrars that resell .fr TLDs at prices lower than ours without our help are not necessarily the most dynamic. Other registrars resell them at much higher prices and perform better than average, while others still include them in a more comprehensive offer and succeed just as well.

Every day I scan with interest and curiosity all our registrars’ create, delete and renewal rates. The really interest lies in trying to understand the differences between them. Why is this registrar underperforming? Why are that registrar’s sales exploding? Why didn’t this one even achieve half of last year’s sales? By comparing the sales operations that are visible on your websites, as well as your prices, your communication and your track record, we are now able to forecast your sales year on year. For example, a sales promotion campaign “one .fr TLD free for each .fr TLD you buy” will automatically generate a substantial increase in deletes over the year and a low renewal rate…

In short, higher costs and lower profitability.

Stop selling names, but don’t give them away either.

The purpose of a registrar, like any company, is to increase its attractiveness (by finding new customers), develop its sales (selling more) and increase its profitability (greater profit margins). Lowering prices helps attract more customers … when the customers in question are interested in the product or service in question. In our case, do (future-) holders spontaneously look for a domain name? I don’t think so. Apart from our community (I speak for France), there is nothing natural about buying a domain name.

The goal for most people I know outside of Afnic is to have an email address, a website, a blog, a Facebook page, a showcase for their company. I don’t remember hearing, “hey, I need a domain name.” What I’ve heard instead is “So you work in domain names? What’s does that mean?”

Meeting customers’ needs

Someone who needs an email address usually goes to Gmail, Yahoo or Hotmail (if they haven’t got an address!).

As you can see, there are very few registrars (except in reply to the query “domain name” where you all pop up, but that’s not a need identified by our customers) but there are plenty of other players. How they use domain names is interesting: they don’t sell them as such, they include them in a more comprehensive offer, often for a premium price. They start by creating content, for example a page, and if the customer is satisfied with the freemium in question, they move up to the premium offer, which includes a domain name among other things. While these players rarely have the same business model as you, we can learn from their communication technique: that of talking profits for the holder.

Here are a few examples we could usefully apply:

  • “Stand out from the crowd with your customized email address for only € XX / year”
  • “Your ad-free blog with a personalized email address for € YY / year”
  • “Highlight your expertise made in France with a professional site under the .fr TLD”
  • “Your website under the .fr TLD in less than 5 minutes: and all you need to know is how to use your mouse”!
  • “Be one of the first to have an email address under the .paris gTLD”
  • “.bzh: the final touch to your website that customers in Brittany will love!”

The benefits of talking business to customers:

  • Whether you go looking for customers who would not necessarily come to you with your “.funny TLD at a funny price” (better attractiveness)
  • Talk uses, and you’ll move upmarket: accommodation / services (higher profitability)
  • Customers who really use their domain names are more loyal (higher profitability)
  • You sell more and improve your customer satisfaction

In conclusion, my advice to registrars who contact me is always the same: don’t sell customers a name, meet their needs. Give them added value. You’ll sell more services at higher prices, and your customers will be more satisfied. And you’ll sell much more than just a name.