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All domain names are equal when it comes to their function, but their value can vary dramatically. That’s because investors and brands will pay exorbitant fees to own a premium domain. These are the exclusive domain names that stand out for their simplicity, SEO rank, authority and brand appeal, among others. They’re the most expensive domains to buy (potentially costing millions) but can pay dividends over time. Find out what makes a domain “premium”, how they repay the investment in business value, and what you can do to optimize them for your brand.
The defining feature of premium domains is that they minimize the risk of users not being able to find your business online. Premium domains do that by being short and memorable, using desirable words, and finishing with a valuable domain extension (typically .com).
Short – no more than two words, but usually one word of 6 characters or less. Increasingly, 2- or 3-letter names are becoming valuable. These work better when they repeat a pattern of digits or numbers for better recall (eg. 777 or 123).
Found in dictionary – “real” words or phrases carry more meaning than slang or jargon words that not everyone may know. A premium domain such as cars.com or hotels.com is easy to remember (and find). By extension, words that are spelt how they sound, have no direct homophones (eg. source/sauce), and are easy to pronounce (across languages) are more valuable.
Top level domain (TLD) – whatever the value of .net and .org TLDs, users will still search for .com by default. If you can secure the premium domain .com that matches your brand, you can effectively eliminate search engines as an obstacle to overcome, since users will type your name directly into the URL bar.
Broad appeal – generic words with mass appeal carry more value than niche-specific terms. For example, the premium domains insurance.com, business.com and even privatejet.com are worth millions.
If you’ve found a premium domain that is available, check whether it has history. Previously registered domains have more traction in terms of ranking compared to newcomers. You should also ensure that your chosen premium domain is trademark-free, otherwise your six-figure purchase could be closely followed by a six-figure infringement lawsuit.
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Whether you’re buying in order to “flip” a premium domain or to supercharge your brand visibility, a number of perks work in favor of your investment.
Trust and credibility – users see premium sites as more legitimate and authoritative than generic domains in all their forms. For example, insurance.com inspires more confidence than cheap-lifeinsurance4u.xyz
Better recall – given that it takes five to seven impressions for consumers to remember a brand name in the first place, it’s important to choose a domain name that is catchy and memorable.
Direct traffic – you can usually enter a premium domain directly in the URL, removing the threat of sponsored posts hijacking your top spot in search rankings.
SEO rank – although Google maintains that the domain name isn’t a factor in SEO, user experience is the holy grail. If users find what they’re looking for with a recognizable domain, its value will be premium.
Resale value – in terms of potential buyers, short, generic domain names carry more value than proprietary domains. Put market capitalization aside and there are more potential buyers for phones.com, for example, than apple.com.
Future proof – a business can scale and diversify over time (look at Samsung) or expand into new territories. Premium domains offer more flexibility and versatility than specific domain names. Your signature product this year might be obsolete next year.
Although the above indicate that there’s a rational logic to premium domain prices, don’t forget that it’s the domain registry that ultimately sets the value, not the business. That’s because domains are sold by auction, so the value (like NFTs) will be whatever people are prepared to pay on the domain marketplace.
A premium domain, however costly, isn’t magic glitter for your business. You still have to support the investment with a strong strategy to unlock the full value.
Leverage your domain name across marketing materials, social media and digital assets. Define brand guidelines for where the name appears so that it’s always consistent. If done right, your domain can even become your brand (eg. booking.com).
Create content around your domain name terms and build traffic with inbound links using your domain name as anchor text. You don’t want to own a premium domain but let other brands own the SEO authority around the keywords.
Show up for search. Even if you’re not ready yet, set up a template site so that search engines can start crawling your site. As you grow, monitor direct traffic and brand searches (competitors too).
We shouldn’t understate the difficulty of securing a highly-coveted premium domain name. Make no mistake, competition is fierce and you’ll have to be patient and persistent. If you can find the name you want at the right price point, however, the long-term recognition and trust for your business may be priceless. As a general rule, investing in a good business domain is worth the higher price for enduring brand-building and online presence.
By making it easier for existing and potential customers to find you online, your marketing campaigns go from strength to strength and your brand can emerge as a potent force in your sector.
Once you’ve completed your research, start capitalizing with NameSilo. Our best-in-class domain management and security offer the best possible protection for your investment. Register, renew and transfer your domain at a competitive rate and with minimum fuss.
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