A domain is, after all, a business' own piece of Internet real estate. It reflects the brand and can even affect the website's ultimate findability. Many business owners find themselves in a position to purchase that perfect domain, left to wonder about the value it could bring to the business as a whole ... and how much it might cost.
In the throes of a website rebuild project of our own, we have been carefully considering buying such a domain. So, I turned to Sedo.com, a domain brokerage company, for some advice on how to approach this process.
"Many domain buyers, especially first-time buyers, settle for a domain either because it's inexpensive or because it's available to register on the spot - they often overlook how valuable a domain name is to the success of their online business and therefore they underestimate the importance of their online real estate," says Kathy Nielsen, director of North American sales, Sedo. "In fact, a domain is exactly like physical real estate, in that location is to be considered the most important factor in the investment process. Just like most shop owners would seek out Main Street for their business location, an online business investor should look to find a name that is easy for potential customers to find and short and descriptive enough for them to remember."
We see many companies attached to their legacy domains. These domains were not necessarily picked for great search findability or for its easy-to-remember value but rather an "ego domain" with their business name only. In many cases, a better domain could be a very real possibility.
Problem:
You are presented with an opportunity to buy what you think is the perfect domain to secure your brand and the ultimate findability for your company. What process should be taken to determine if the domain should be acquired (and for what price)?
Action Plan:
1. Source Search Data First
Check search volume for validity of exposure, at the same time checking your ego at the door. Use a trusted keyword tool such as Google's External Keyword Tool (https://wsm.co/bREOyp).
This tool is accessible through your Google Adwords account but available to all, not just AdWords account holders. Look at three key indicators after entering the proposed domain name words:
Keyword and Related Phrases: Is your domain the only keyword- driven domain that gets good search volume? Take a look at other options.
Global Monthly Search Volume: How many searches each month are actually conducted on that keyword phrase? Will this help SEO efforts at all?
Exact match searches: Make sure to look at Exact searches for that phrase, not Broad Match. If someone types in the proposed domain words exactly and it has high search volume, this may be a good investment in a domain name presence.
2. Get a Domain Name Appraisal
Run a domain appraisal report to know the current market value of the domain.
Sedo is one company that, for $40.00, will return a non-biased report on the actual value of the domain. What factors are taken into consideration when valuing a domain name?
"Factors such as the popularity of the terms used in the domain, comparable sales, cost-per-click (CPC) keywords [included in the domain] and the length of the domain are all considered during an appraisal," says Nielsen. "Of course, if a domain was previously being used by another business, the added value of established website traffic will also influence the pricing. Most importantly, an appraisal helps set a buyer's expectations and allows them to better budget for the right domain."
Other available tools for domain valuation include Valuate.com, EstiBot.com and SwiftAppraisal.com. Using several tools offers a good way to find an appropriate price range. Ultimately, however, a domain is as valuable as another party is willing to pay.
3. Check Your Risk Factors
Make sure you are not violating any trademark issues and exposing risk to your company - consider the consequences. You could spend time and resources defending your right to own the domain, and risk all of your work to build a brand to only give it away to the rightful trademark holder. Check out Domain Law at Sedo.com and USPTO.com to check if the domain name is already trademarked as a phrase.
Sedo Domain Law: https://wsm.co/bVOMo7
USPTO: https://wsm.co/aZz2U7
Also, be sure to check for any owners of the secondary extensions of the domain name - such as .org, .net, .edu or .mobi. Does this pose a risk to future growth over time?
4. Check Your Wallet
How fast will you recover your investment with the new bright and shiny domain? How much is too much to pay?
- How many sales, conversions or leads will you need to procure to make this investment worth the money, over time?
- Can you afford the money right now in cash without putting it on a credit card or financing the amount for the domain? If the answer is "no", then you are probably not at a time in your business where it makes sense to purchase the domain.
- Does the domain name potentially become an asset of your company in the event that you sell at a later date? This may also bring inherent value to your overall business.
- Will the domain's history (specifically, inbound links) aid in your marketing efforts with the new site to be created under that domain?
5. What is the Easiest User Experience?
Think about your current marketing efforts in offline areas such as print or radio. If you have a domain name with multiple keyword phrases or dashes, will this make it more difficult for the user/future searcher? Is the domain hard to remember or difficult to type?
Any domain worth purchasing should be easy to remember and simple in nature.
- Example: GoofOff.com or Goof-Off.com? If you see this domain on a billboard or a TV ad, will you remember to use the dash? What if you don't own GoofOff.com? Searchers will likely be misled or confused.
- Does your domain have a keyword phrase or product description in the domain? GoofOffStainRemover.com and GoofOffSpotRemover.com are both longer domains but have a keyword imbedded into them. These domains point to a product as an industry leader. Both domains make a promise to the user as to what to expect on the site. GoofOff.com, however, could be anyone or anything, not necessarily a product.
Picking a domain can be as complicated (and stressful) as picking the name of your company. If you keep these five key factors in mind when hunting for your perfect domain, you will be able to not only weigh the hard numbers for search but also the long term emotional value of clean, elegant and high-valued domain name that will stand the test of time.
About the Author: Heather Lutze has spent the last 10 years helping business owners get their enterprises noticed on the Web by their target audiences. She is the author of "The Findability Formula: The Easy, Non- Technical Approach to Search Engine Marketing." by Wiley & Sons. She is a Marketing Speaker and runs a Denver Internet Marketing agency. Visit FindabilityFormula.com for tools and resources to increase your site's findability.