by Greg Zuckerman | February 27 2017

How a Domain Name Can Boost Customer Retention Rates

For most businesses, attracting a new customer is just one piece of a complex marketing funnel. Getting a new customer is a crucial first step. But it's far more lucrative to retain that customer and get them to buy from you again and again.

Keeping customers, after all, is generally far less expensive than generating new ones. Each one comes with an acquisition cost, related to marketing expenditures, sales efforts and personnel expenses (consider, for example, how much time your sales rep spends on the phone with a potential client—and how much that costs the company—vs. how much the sale is worth if he actually closes the deal).

Retaining customers thus generates revenue without an acquisition cost. Instead, the cost comes from customer retention efforts, such as drip email campaigns, for example, which are typically far less expensive.

In a recent post, we mentioned how an online pillow retailer boosted its customer retention rates after purchasing the premium domain Pillows.com (the company was previously known as PacificPillows.com).

But, how exactly does a domain translate into repeat customers? Let's take a look.

On the Internet, memorability is everything
Decades ago, remembering where you bought a product was generally as easy as passing by the building where you shopped. So if you drove by your local department store, you'd think, "That's where I bought my pillow," and you'd go there again when you needed a new one.

But these days, as more people switch to online shopping, remembering where you bought something isn't quite as easy: there's no physical building, so you need to remember the name of the online store (or more importantly: the domain name).

A memorable domain translates into repeat customers
An online retailer could offer the best shopping experience on the Internet. But if customers don't remember which website they shopped at, they might never return.

This is why having a memorable domain is so important. According to some estimates, as of 2013 there were more than 102,000 online retailers based in the United States alone. And since online shoppers typically don't limit their shopping to a single website, it's crucial for retailers to do everything they can to retain customers. Having a memorable domain is a fundamental piece of that puzzle.

A prime example is Pillows.com. The simplicity and relevance of the domain makes it extremely easy to remember. A customer is more likely to remember buying a pillow from Pillows.com than from a store that has a much longer, generic domain.

Brand recognition boosts retention
Memorability isn't the only factor that can boost customer retention rates. A good domain can also be highly brandable. A well-branded domain boosts credibility and helps the business position itself as a trusted expert.

Let's return to the Pillows.com example. In our interview with CEO Craig Clark, Craig mentioned how the credibility factor affected multiple areas of business: in attracting new clients online (i.e. online shoppers who see the domain name in search results), working with vendors, and of course retaining customers. Having the domain Pillows.com, Craig said, shows that "We have credibility. We know what we're doing. We have people turning to us as the experts. And that’s very important."

A good domain name on its own might not be enough to increase retention rates. But by creating a good shopping experience, and building a brand around that domain, you can bet that customers will keep coming back, again and again.