Domain Names Are Assets: Successful Brands’s Secrets Revealed

Domains are just like real estate only online, right? Or are they? Well, it turns out that domain names are very different and much more important. Domains intersect with a brand on a much deeper level that leaps the value past the hard cost of the domain. For example, the Cars.com domain is estimated at $872M according to recent filings. The analogy of real estate really only scratches the surface of the value the perfect domain brings to a brand. In today’s post, I am going to explain why domain names are digital assets that impact the very DNA of a brand. Also, why every company needs to seriously consider the positive impact they can have on their brand, revenue, and online security.

Domain names are assets
One comment we hear quite often in our outreach is:

“We are happy with our current domain”

In some cases, these brands have built an impressive online business. Some in the hundreds of $MMM to low $M’s in revenue. The question we try and get them to answer is what could the potential be if you had the perfect domain name for your brand (shorter version, .com, exact match, category defining domain, etc..). Domain names are assets that impact the very DNA of your brand and marketing strategies. When a company acquires them correctly, a domain name becomes a strategic advantage and working asset that is inseparable from the brand.

How important is your brand?
Your brand may be one of the most valuable assets your company owns. Brands are how we differentiate businesses and find our perfect products. Here is how Jerry McLaughlin describes the definition of a brand:

“your brand is what your prospect thinks of when he or she hears your brand name”

They provide significant value to your company and revenue. For example, the Google brand is valued at $101B according to this article on Forbes. So why are we talking about branding? I thought this post was about domains.

I am going to make a bold statement.
The internet has now added an additional element to this discussion. Today your brand name is your domain name because by default it becomes how your customers find and interact with you online, communicate via email and how you talk to customers.

When your domain name and your brand do not match, it creates a struggle.
This struggle can lead to massive inefficiencies in marketing and consumer perception. Many business executives still do not understand the impact their domain has to conversion and revenue. The executives that do build amazing brands. Investing in your perfect domain name needs to be about the return on investment (ROI). Different types of startups will value a domain differently, however, the conversation should still be very similar. These key fundamentals will help you understand how to value your brand.

Top 6 reasons to consider when evaluating the impact of a domain name
You are losing traffic to the .com
What happens when a different company has the leadership position with the (.com) domain
You need to spend valuable marketing dollars on clarifying your domain vs. your message
Your emails could be going to the (.com) domain creating a huge security risk
How it impacts your SEO ability
Domain names are regularly bought and sold while appreciating in value.
What is the value of the traffic you are losing by not owning your exact match domain?
People crave simplicity and reward brands that make the journey effortless for them. This is one reason that people simplify domains and brands down to the basics. For example, if your company is Deco designs they typically reduce this to just Deco and assume depending upon your revenue size that you own Deco.com. The holy grail of traffic is type-in traffic from reoccurring customers. When you don’t own your exact match domain you most likely are driving traffic to another brand. We call this the “halo effect”. James Iles at NamepPros.com has some great interviews with founders of companies on how the acquisition of their perfect domain has impacted their business. These interviews are great because they show us first hand how domain names are assets that have a direct impact on businesses. Here are few examples.

Hive Teams rebranded to Hive.com experienced a 45% increase traffic. This was just by updating their domain name.
TeamWork initially launched under the domain TeamWorkPM.net. They were able to acquire TeamWork.com and experienced a hockey stick like growth.
Check out this chart that Peter shared. This has to be one of the clearest examples of the direct correlation to owning an “exact match” brand domain.

Seriously this is exciting!
I recommend reading Peter Coppinger’s journey on creating TeamWork. This post is jam packed with his personal insights on what went wrong and what he did well. Excellent read. The founders of Lawn.com (great business model) are veteran business owners and have a formula they use to determine the impact to owning a premium domain such as Lawn.com. They were so confident in this formula they paid $240,000 USD for the domain Lawn.com.

Domain names are assets that have a measurable and real impact on revenue and traffic.

What happens when a different company has the .com domain
Creating clarity for your brand is priceless. Segal and Gale publish a report showing that brands that communicate simplicity generate higher revenues and goodwill.

They state that: “Our seventh Global Brand Simplicity Index™ demonstrates more powerfully than ever that brands that embrace simplicity are more profitable,” said Howard Belk, co-CEO and chief creative officer, Siegel+Gale. “The research shows that businesses that haven’t been providing a simpler customer experience have left an estimated $86 billion on the table! Ignoring that kind of ROI is crazy.”

The online world though is changing the relationship on how to create this clarity.

Before the internet, your brand could dominate a vertical and never be in contact with the same brand name selling a different product
Take the brand Nitro for example. Ok, which Nitro are you talking about? Is it Nitro.com, GoNitro.com or NitroType.com. [![Nitro Boats]

Both companies have great branding. Nitro boats will forever have the dominant brand position and marketing advantage. In the past, Nitro boats would never have been competing with Nitro Software. This is not the case today. Because of the internet, there can only be one company that owns Nitro.com, Deco.com, Harbor.com, or Trunk.com. Add to that we are now in a global economy and domains have global appeal. In one way, the internet has massively increased competition for positioning and leadership. When you don’t own the leadership position for your brand you run the risk of driving traffic to your competition, another brand and creating confusion for your customers.

Domain names are assets that have a global appeal and market. Brands are now competing with companies in different verticals that have their same brand name. Only one company can control the dominant position for any keyword.

The perfect domain adds massive value to a brand
Great brands own their exact match domain making the brand journey effortless for their customers. The real momentum and power are achieved by creating simplicity and clarity. Your domain should go unnoticed because it reinforces your brand. When it doesn’t your brand suffers. Let that sink in for a bit. I think this point alone may be the hidden gem in this article.

You need to spend valuable marketing dollars on clarifying your domain
If you have to explain that your domain is different from your brand you are wasting precious marketing dollars. This needs to be a primary consideration. Will you need to say we are GetExample.com, not Example.com every time you direct someone to your website? In the examples above with Hive.com and TeamWork.com when they updated their brand it produced significant results. Just to clarify this will not help every business. The lifestyle startup or the small local business will most likely not see any significant return on investment. The scaleable and buyable startups that have plans to dominate their vertical online will see the biggest impact. Here is an example from Nick Macario the founder of Remote.com on why they paid well into the six figures for their perfect “exact match domain.”

Can you reveal how much you paid to acquire the domain name Remote.com? How did you justify paying this amount? “I can’t disclose the exact amount, but it was well into six figures. Justifying the cost is easy; this domain is a fixed-asset with lasting value, which will appreciate over time. Aside from the resale value, the name is going to put us in a position to build a very strong brand and a company that has the potential to change the world.

Domain names are assets because of how they impact the very DNA of a brand. Great brands own their domain online creating simplicity and clarity. This makes the journey for their customers effortless.

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