(Potential) End User Education: What Domainers Should Do?
One of the most powerful ideas in the domain investing industry was introduced by Rick Schwartz a fairly long time ago, when he asked the following rhetorical question: how much is a click worth if it leads to the sale of an airplane? It tends to be an important mindset-related aspect to embrace because a lot of times, you as a domain investor end up educating potential domain buyers in one way or another, with many inevitably asking how you as the owner of the domain justify the price you are interested in obtaining.
The name of the game is “selling” the true potential of the domain.
Fast-forward to 2020 and the exact same mindset-related advice has been provided by Michael Saylor over at DomainSherpa, with him referring to the domain Art.com as an example and encouraging viewers to envision turning it into a business that gives customers access to art on a subscription basis, art streaming if you will. For example, he mentioned that he would much rather simply mount screens on his wall and display different types of art based on his mood than let’s say purchase an actual painting. A fair number of individuals probably see things the same way and as such, there might be millions or even billions on the table when it comes to catering to the needs of such an audience. Andrew Rosener agreed that Art.com is one of the top domain choices out there and the bottom line is this: you as a domain owner are doing yourself a disservice by not choosing prices based on the true potential of the asset you are selling.
Does Educating End Users Always Work?
While attempting to sell a domain at a price that revolves around its true potential seems like a common sense approach, let’s be honest: the overwhelming majority of end users will not be receptive to valuation methods which involves them being much more generous with their acquisition budgets than they had initially envisioned. Therefore, if you believe that a well-worded email with sound arguments will convert any stingy end user to a generous visionary, you are in for a more than bitter disappointment.
The good news, however, is that nobody forces you to sell a domain to the first end user who makes an offer. Not only that but the more you analyze ultra-successful domain sales in an attempt to reverse engineer the thought process and approach which led to the sales in question, it is impossible not to notice the elephant in the room in terms of common denominators: saying no again and again. And again. And then yet again.
It would be interesting if someone were diligent enough to collect data and track metrics such as “refusals per sale” for domain names and as a best guess, it is quite likely that the most successful sales out there involved a strong pattern of firmly saying no. Therefore, it is important to be realistic and accept that educating end users doesn’t always work and in fact, it most frequently doesn’t. There is absolutely nothing wrong with that because there is a handy little world in our vocabulary which you are also encouraged to use: you’ve guessed it, no.
Should You Attempt to Each and Every End User?
Unfortunately, approaches are all over the place and it ultimately all boils down to a phrase that tends to be quite useful in our industry: there is more than one way to skin a cat. Some domain investors are willing to take time out of their busy schedules so as to engage in education-facilitating conversations with any end user who cares to listen. Other (busier) investors choose to only educate so-called qualified end users. In the case of Michael Saylor, it took a $22 million offer for Voice.com for him to take things to the next level and explain his vision with respect to the domain to the prospective buyer, who ultimately agreed to increase his offer to $30 million, an amount which represented the final sales price for the asset.
It’s all up to you.
As a general guideline, however, your generosity with respect to the amount of time you are willing to spend educating end user should be indirectly correlated to your net worth. More specifically, as your net worth goes up, your willingness to engage in let’s call it end user hand-holding goes down, with you reserving the right to only follow up with leads which manager to prove that they are genuinely serious about the acquisition.
The Best Approach When Educating End Users?
Once again, there is no “one size fits all” solution that is guaranteed to always work, it’s on you to figure out what the best approach for your specific needs is. For example, Rick Schwartz has been known to be quite direct from time to time, for reasons which revolve around anything from his busy schedule to his more direct personality type. Other domain investors choose to treat end users with velvet gloves and so on. Again, nothing is set in stone.
What is recommended, however, is embracing the scientific method when coming up with tweaking approaches rather than merely winging it, something many domain investors are notorious for doing. In other words, be consistent and scientific with respect to whichever method(s) you are using rather than simply playing it by the ear.
For example, start with let’s call it Approach A and gradually collect data. Once you have enough information to work with, try to draw conclusions with respect to both the strengths and weaknesses associated with the approach in question. Then, if necessary, tweak it and you will have Approach B, on which you will also gather data and with which you will apply the same methodology. Rinse and repeat. While not perfect, the scientific method stood the test of time and this author for one cannot think of a better alternative.
What If Your Approach Fails?
No matter how hard you try and no matter how articulate you may be, your approach may very well end up being a failure. For example, after a year of experimenting with various tweaks, you might come to the conclusion that the results have been sub-optimal or even non-existent. In such cases, it makes sense to ask yourself if there is something fundamentally wrong with what you are doing, something related to the very essence of your strategy rather than a minor detail that requires tweaking here and there.
Broadly speaking, there are many things that might be fundamentally wrong:
- The quality of your domains. As commendable as it may be that you are doing your best to educate end users about the long-term potential of domain names in general and while your arguments may be correct generally speaking, perhaps there is something wrong with YOUR domains and it might be wise to re-think anything from your domain appraisal strategy to the acquisition approach you have embraced
- Your price expectations being unrealistic relative to the potential of the domain. While it makes sense not to shoot yourself in the foot by setting unreasonably low price expectations, you have to understand that not all domains have the potential of being blockbusters. Not because they are awful but rather for reasons which range from aspects related to the industry they are targeting to the owner aiming too high, plain and simple
- Your fundamental negotiation strategy, with it being remarkable how many domainers understand that their very livelihood may very well depend on negotiation skills, yet haven’t even read one solid negotiation-related book… please do not be one of them!
All in All
This much is certain: there is plenty of value in educating end users but, of course, it all depends on your specific situation. How much time can you afford to commit to this? How selective should you be? The list of questions could continue indefinitely and while it is fair to conclude that there is room for end user education-related strategies when it comes to the career of each and every domain investor reading this, approaches come in all shapes and sizes, they are never set in stone.
Do your best to communicate with end users whenever it makes sense, never forget to do so with a firm grasp on the scientific method and do keep in mind that possessing at least some theoretical negotiation-related knowledge that you can validate empirically when experimenting with end users can and will help.
As can be seen, the end user education dimension is anything but something that should be considered burdensome. Instead, it’s simply a tool worth having in your arsenal, one which may very well end up generating win-win-win situations if used properly, with you as the domain owner winning in terms of sales price, the domain industry in general also being better off if more investors contribute to the proverbial cause this way and at the end of the day, end users who unlock the true potential of their assets won’t exactly be bitter either.