A lot of forward thinking companies have realized the benefits of offering domain name registrations to their users as part of their service. The more services a customer buys from a company, the ‘stickier’ they become. After having hundreds of conversations with web experts over the past several months, the concerns about pricing are almost always the topic of conversation. So I thought I’d share some of the insight I learned from my own customer interactions.
The challenge, that many generally agree with is this: at least one of your competitors is always cheaper and playing the price game is a race to the bottom.
The advice in this post was written with the small web design shop in mind. These companies have 1-10 employees and they typically have strong relationships with their clients, where the management of the web site, domain name and possibly email and IT is managed by them.
They’re sensitive to pricing and in my experience, feel as if they’re up against the big guys, without the benefit of volume pricing, which (in their mind) hinders their ability to sell domain names at a reasonable price point.
Don’t Sell Domain Names. Sell Domain Name Services.
Contrary to popular belief, there’s decent recurring margins to be made in selling domain names.
The secret to selling domain names at a reasonable price point is differentiation. This is true when selling a single domain name registration, and it becomes even more important when clients have multiple domain names in their portfolio.
You’re probably wondering, how does one differentiate a domain name service? Well, I’m glad you asked! I have a few ideas that I’ve seen work well at webhosting companies and design shops:
- Be an expert at DNS. DNS can be fairly complex subject for people and many service providers staff their technical support teams with reps having minimal technical training. So when a customer of yours needs to make an addition or a change, they’ll appreciate that you understand what they need.
- Take domain name security to the next level. Offer the client a service where you’ll contact them each year for renewals and make sure everything is up to date from a contact information point of view. Also keep names of authorized people on file who can make changes to the domain. This added security can be worth a boatload to a company doing business on the web.
- Become the financial advisor equivalent to domain names. Perhaps the client would really like .NET, in addition to their .COM, but it wasn’t available at the time. Why not offer a service that keeps an eye on it and offer advisory services about how to procure the domain? There are good reasons for picking certain TLDs (top level domains) over each other and having this knowledge is valuable to your clients.
These are just a few ideas that have come up in my own conversations with clients. This kind of creative differentiation could help you move past the price “barrier” and into a totally different territory where your competitors are ill-equipped.
When you create a service that others won’t or can’t offer, you’ve created a level of differentiation that is difficult to put a value on. If your competitors are selling apples, sell oranges instead. Or at least do what you can to make sure your apples are shinier, crispier and sweeter!