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How Buying the Right Domain Name Is Different

This post outlines a typical information-gathering process for online purchasing decisions and demonstrates why a different approach is needed when buying a domain name.

Huge amounts of product information are now publicly available on the Internet. When buying most products, consumers rely on that wealth of information. About 70% of consumers make online reviews a key part of their buying choices, according to a 2012 Nielsen survey. (The major review sites were Amazon, CNet, Yelp, and Zagat.) In 2011 a survey by Google found that shoppers, on average, consult 10.4 information sources prior to purchase; the year before, the figure had been half that. The information sources, not surprisingly, are online.

Two thoughts on this. First, we’re warned that reviews and likes can be manipulated. True to a degree, but reviewers are constantly developing and implementing new tools to minimize such activity. And you can look at the consumer behavior data above to find proof that shoppers have low concern with manipulation. And with information comes information tools (see Ref. 1 and Ref. 2). Buying the typical product has become a smoother experience because data can now be sorted and classified so quickly.

Second, we’re told information overload will give an advantage to online brands. True but limited. Emotional affinity to brands, prestige, and status will continue, and brands like Herm├Ęs, Louis Vuitton, and Versace are unlikely to evaporate. Nor will the association of car safety with Volvo, or of speed with Ferrari and Lamborghini. Eco-friendly cars like the Tesla lines (pretty much smart phones on wheels) and the Toyota Prius already draw loyalists.

There we have the common shopping model and what lies ahead for it. But that model does not apply to domain names. The typical consumer can’t wade onto the Internet and find the information that drives a good domain name decision. That’s because of:

1. The need for customized analytics and thus, consultants, as outlined here:

  1. Domain names need to be individually valued based either on statistical comparables or financial discounted cash-flow models. But most buyers and sellers don’t have the technical knowledge needed for these approaches.
  2. Hundreds of new gTLDs are being launched. Which of these gTLDs is most suitable for your branding? Should you rebrand under any of the new gTLDs or continue under, say, .com? What to do when the preferred domain name is unavailable? These decisions require an understanding of domain names, rebranding evaluation methods, and brand protection mechanisms.

2. The domain industry’s pervasive lack of trust, which is driven by pundits’ high-pitched rhetoric and the real plague of cybersquatting. Let’s add to the list of confidence killers the pathetic numbers of some of the new gTLD registrations. They’re bound to make the average person question the reliability of these registries.

3. The need for expert advice within a buyer’s social network. Many people know someone who understands cameras; not so many people know experts on domain names.

Thus, what does the industry need to do to get more people buying?

1. Tone down the rhetoric about buses, but sharpen the marketing message. Focus on the downside risk of not owning the right domain name; that’s more important than the general benefits of ownership. Moreover, marketers need to remember that potential buyers aren’t dumb, just unfamiliar with our market.

2. Registries should exert more effort to do good. They need to bear down on cybersquatting, and they should restrict domain registrants to those that are associated with the new gTLD signal. Signaling quality takes a hit when a new gTLD can be grabbed by anybody.

By Alex Tajirian, CEO at DomainMart

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