Go ahead, scream at me all you like - Image source: brbankston of stock.xchng
I have always viewed web sites as virtual real estate, and domain names as undeveloped property (until a site is built on the domain), and with that mindset I’ve spent a lot of money over the years on Geo-based domains, speculating that eventually local and more personalized search tendencies would become “the norm” with web users.
To me, that notion just made sense from a web browsing and consumer’s perspective. Sure, you might be able to save a few dollars on lingerie by buying from some site/company in China, but are you going to order your car from overseas? How about searching for a Real Estate or Insurance agent; or what about a Plumber or Attorney? Will you ever decide it’s a good idea to let your clogged drain wait until the Plumber from India that you hired from Freelancer.com makes his way to your home? I don’t think so, and I really hope not if you’re my neighbor.
There are just some things we need and want serviced by local businesses, and regardless of how small our global community may become, that’s not really going to change. At least, that has been my long standing belief, and my reason for speculating that GEO-based domains, like ANYTOWNlawyer.com or ANYCITYplumber.com would ultimately become very valuable.
Let’s be clear, these aren’t trademark or typo domains, they’re general/generic “Location” and “Industry” dot coms. I would never purchase a domain that I knew violated someone’s trademark or service mark, and I certainly wouldn’t buy a typo domain. That’s bad business, shady and unethical business, and more than that, it’s dumb business to invest in something that can never have stand-alone value.
But just as a property developer will buy vacant lots around major cities with the speculation that one day they may be perfect locations for a Wal-Mart, strip mall or condos, I’ve purchased hundreds of general Location and Industry based domains speculating that at some point people in those industries and locations would want them to enhance or compliment their online presence.
Local & Personalized Search Is Here
If you work online in any capacity then you know that local and personalized search is trending upward hard. Search Engines are scrambling to improve their abilities to serve localized and personalized results to searchers, because those searchers look for stuff, like businesses to deal with, in a localized and personal way.
No matter how well the biggest car dealerships in your region may be established and branded, it’s a fact that some (many) people living in your region will search online for “CITY_NAME cars” to find dealerships to do business with. That’s just how people approach online search.
And while it’s smart business for a big dealership to own their company name domain, like FredsUsedCars.com — it’s also smart business to have domains like YOURCITYcars.com and YOURCITYusedCars.com too. Those additional domains can either point directly to your company name site, or (the better option) be used with special landing pages, single page websites that promote and upsell the services and selections at your company domain site.
Owning many of these type domains, I know the numbers on them. I know that several thousand people search online each month for one particular city name and the word cars (i.e. “CITY_NAME cars”), and I also know that over 70% of the dealerships in that city don’t show up on the first page of results for that search. That’s just a numbers thing, there’s only 10 spots open on the first page of results, and it’s a mid-sized city with several dozen dealerships in it, so there just isn’t room for all of them on the first page.
Do you know what does show up on the first page for that search though? My domain CITYNAMEcars.com – it’s in the #2 spot and has been for months, because I don’t leave my domains empty, I put a little information about the region and industry they represent on them and then let them age like a fine wine, and they ultimately creep up the search listings all by themselves.
So, how valuable would having the #2 spot in Google be to a car dealership in a mid-sized city–knowing that a thousand or more people searching for local dealerships would see it there every month? That seems like an awesome point of contact with potential customers to me–in an industry selling high-ticket items.
Knowing what I do about online search marketing, if I owned a dealership in that city I would value that domain in the low $xx,xxx range, no doubt about it. It’s a great reach with more long-term potential than producing and broadcasting an expensive television commercial would be.
And The Punchline Is…
Now, here’s the point of my posting (and the reason I’m taking a break from working this morning to write a blog posting). Last week I made the decision to lighten my domain portfolio a little. I don’t have any urgent financial needs, and usually I do just sit on a domain until someone approaches me about acquiring it, but I’ve got hundreds of domain names sitting out there in the wild that are a bookkeeping nightmare and with the holidays coming I figured it was a good time to shed some of the load and convert it to cash.
So, I picked out some domains that I thought were going to be the easiest to sell at a fair rate, and began contacting potential end users for them with “well below market value” offers. I’m talking about deals like low $x,xxx for domains I know are worth low $xx,xxx and mid $xxx for domains I know are worth low $x,xxx levels.
Like I said, I have no urgent need for cash or I’d be aggressively pushing my domains for top dollar at some of the after market sites, and I’m not out to put the squeeze on small businesses either. I’ve registered most of the domains I own by hand, at registrar pricing, because I saw the value in domains like these long ago and began buying while many were still available. So, if I can turn $20 or $30 worth of registration fees into a $300 or $400 profit, especially after I’ve earned PPC profits just from having the domains parked for the last few years that I’ve owned them, even if a domain might be able to sell for $1,000 or more, I’m still a happy guy and feel that everyone has made out well on the deal.
Then this morning I get a reply back from one of the potential end users I had contacted. The guy was yelling and screaming at me about cybersquatting, and me being the lowest form of pond scum he’d ever come across. He told me that if I was a “decent man” I’d sell him the domain for $10 like he could buy it at GoDaddy for, and not try to blackmail(???) him.
Now, I’m a hot-headed Irishman at times, but I never let that emerge while doing business. So I listened as he ranted aimlessly on and on, then I thanked him for his time and opinions, and just before ending the call I asked how much he paid for the lot his dealership sat on?
He was silent for a second, obviously the question was unexpected, but then he recovered and asked “what the hell does that matter?” — To which I replied that whatever he had paid for it, I’m sure it was more than he would have paid for the same sized piece of land if it was located out in the middle of nowhere, 40 or 50 miles from the nearest homes or businesses.
He said, “Your point?” — And I said online real estate is no different. You pay a premium for access to through-traffic. Sure, you could go straight to GoDaddy right now and purchase a domain that nobody has ever heard of, gets no organic search or type-in traffic and has no presence in the search engines at all for $10, but without investing a ton of time and money to build traffic traction for that domain it would be a waste of your $10. However, I’m offering you a domain that already has traffic, has reputation and has search listing results. My price isn’t based on the letters that make up the domain name, my price is based on the value of accessing the traffic that already travels through that domain. Just how much would you pay for the chance to invite 1,000 people who are looking for a dealership to do businesses with onto your sales floor each month? Because that’s what my offer is for.
Again, there was a moment of silence from his end, and then he quietly asked, “Listen, what’s your lowest offer here?”
BANG! I dropped my asking price 5% and we had a deal.
Summary
Obviously I’ve left out the names of the domain, city and dealership from today’s little adventure; to protect the innocent :)
But I wanted to share the story because I think there’s some value in it for anyone who may eventually end up in a similar situation of negotiating with an angry and irate customer.
It would have been easy to just hang up on the guy when he was screaming at me, or to just end the call with a “thank you for your time” and move on to the next potential end user on my list for that domain. Heck, I might have even been able to sell the domain for my original asking price to the next person without having to drop my price the 5% that I did–but I may not have.
You never know what’s around the next corner. There may not have been another interested buyer out there right now, it’s an unknown. However, I had this guy on the phone, and his anger told me that he actually did want the domain name. If he didn’t he wouldn’t have cared enough to bother calling to yell at me.
Also, his remarks about being able to go buy a domain at GoDaddy for $10 told me he just wasn’t recognizing the true value of an established and keyword rich domain. All I had to do was keep my cool and show him that value in a manner he could instantly relate to and not ignore, hence my questions about what he paid for the land his dealership is on.
By asking him about that, I was framing the value of access to potential customers in a way he would get it, and he did.
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Tags: angry customer, cool negotiations
