Determining how to price domain names is complicated, but does your pricing psychology affect the number of domains you sell each year? do you
NameFind, a domain name portfolio owned by GoDaddy, tests domain name pricing psychology theories at scale and maintains a large enough inventory of domains to observe statistically significant results. .
NameFind is constantly experimenting, and each test updates the tens of thousands of domain names owned by NameFind to run the experiment, and maintains an additional set of tens of thousands of domain names as a control group. Each group contains relatively similar types of domain names.
One theory that caught NameFind’s attention is charm pricing, a fundamental concept in pricing psychology.according to arena go batch:
The “attractive” pricing that makes everything look cheap is the price that subtracts one left digit and leaves “something for 99”. Research shows that a cent difference between $2.60 and $2.59 is not the same as a difference between $3.00 and $2.99. It’s all because we perceive the price as “high” or “low” from left to right before we reach the 99 part. Shortcut recognition works very fast. unconsciously fast. After reaching and processing 99 parts, it is often too late to change your perception of the price.
This is a theory widely adopted in the business world. For example, Apple advocates using the number 9 to price its products, but a look at Amazon shows just how much the e-commerce giant values this pricing method.
Applied to domain name pricing, attractive pricing suggests that reducing one digit on the left makes the domain more attractive to buyers. Assuming, of course, that you have a robust and objective domain reputation to begin with.
With this in mind, NameFind tested this attractive pricing theory on tens of thousands of unique domains by employing price points ending in 499 and 999 (referred to as 499/999 price points). . Prices have gone up and down to fit this new framework.
for example, BikeKit.com Moved from $8,799 to $8,999, Cavity Fillers.com Increased from $3,025 to $2,999.
NameFind collected and analyzed sales data over a period of three months.
The results summarized below showed a significant increase in annual sales that could be attributed to the price change.
$2,500 – $10,000 results
The $2,500 to $10,000 range is generally a popular area of domain name pricing, attracting small business owners, entrepreneurs, and impulse buyers with premium, accessible domains.
NameFind tested attractive pricing strategies on thousands of domain names priced between $2,500 and $10,000 to see if they impacted sales. The results strongly indicated that attractive pricing works for domains ranging from $2,500 to $10,000 at the listed buy now (BIN) prices.
NameFind found a 22% increase in sales revenue and an 8% increase in the number of domains sold. His average selling price also increased by 13%.
These are important results that suggest that the 499/999 price point impacts both BIN sales volume and total revenue.
In particular, buyers were found to buy more domain names, even at higher prices. BikeKit.com In the example above, we moved from $8,799 to $8,999. In NameFind’s tests, attractive pricing had a clear and documented positive effect.
Here’s how a price change of 499/999 positively impacts a hypothetical portfolio of 10,000 domains with an average initial sale price of $3,540. In this scenario, we see an increase in annual sales of almost $100,000.
499/999 $2,500 – $10,000 Buy Now Price | index | test index | % change |
number of domains | 10,000 | 10,000 | |
annual sales | $424,800 | $520,000 | twenty two% |
Annual sales volume | 120 | 130 | 8% |
Average Selling Price (ASP) | $3,540 | $4,000 | 13% |
$10,000 – $50,000 Sales
After a successful experiment of $2,500 to $10,000, NameFind adopted the same 499/999 charm pricing strategy for thousands of owned domains with BIN prices between $10,000 and $50,000.
The results here were less clear. In annual sales, he realized a 21% increase, which NameFind said was due to an increase in annual unit sales, not a price change.
What about domains priced under $2,500?
For the typical domain portfolio owner, the sub-$2,500 category is popular and can be a regular source of income.
NameFind’s 499/999 charm price test extended to domains priced between $50 and $2,500, but the team found that domain names Interval used in high-value domains.
For example, rounding all domain names to $499, $999, or $1,499 is too broad for this sales category. For domains under $2,500, NameFind uses more accurate “99” prices, such as $299 and $399.
How to apply this to your portfolio
Does pricing psychology affect the number of domains you sell each year? Based on the positive results of NameFind, yes. Here you might be interested in testing the theory with your own domain name pricing.
For Afternic users, BIN prices can be updated in bulk from the portfolio dashboard in Afternic 2.0. For large portfolio owners, he currently downloads Afternic inventory spreadsheets and uses formulas to round prices to the nearest 499/999. price pointand re-uploading the changes is a useful workflow to follow.
Do you have any suggestions for future NameFind pricing tests?