Competition Insurance for Corp America sold here!


Morning folks!
The lesson of 1-800-flowers and Hotels.com and a ramble to Cyber
Monday. Before you disagree with me, first allow yourself to visit the other side of the coin. Remaining ignorant in the face of facts is still your choice so don't feel too threatened. Clinging to failure is just human nature. Are you bold enough to look at the same thing in a different way? Give me your mind for 5 minutes and let me see if I can get you really wound up.


Companies buy all types of insurance to protect them from this
and that and things we have not even thought of. However they don't buy
'Competition insurance.' How silly is that? No insurance to make sure some new
guy coming along does not steal some of their market share. Even with lessons to
point to, 'Competition Insurance' is not bought. Why? Well they can't figure out
who the hell is responsible for that. Corporate thinks it is up to Sales Dept.
The Sales Dept tells Manufacturing but they told them that they need to see Legal since it is an insurance matter. Meanwhile the CEO is playing golf and
spending the bonus he may have not earned on merits but since his attorney got
him such a great deal that's just the way it is.
So Sales now has to explain to
Legal why they need this insurance that really does not exist. See this
'Insurance' is not an ' Insurance Policy.' It is much more important than making sure you are covered in case somebody slips and falls. It is the
insurance to make sure that the company keeps steaming along and keeps that
market share growing. It's the part of the company responsible for thwarting
threats from new startups and their old historic rivals. What they have yet to
see even with example after example is that by owning a generic category name in
a dotcom it is not only good business, it prevents another 1-800-flowers or Hotels.com from coming along and disrupting an entire industry. Yet with these
examples we still have generic category domains floating around. Domains that receive thousands of targeted visitors that don't use Google to get there but type the domain directly in the browser bar. It becomes a 'Destination' just like you would probably type in Sears.com as opposed to going to Google to see where Sears is. The domain may be
floating today and the CEO may be yachting today, but the shareholder will all
live to regret it tomorrow if these companies FAIL to secure their generics before their competition does.
If I am Xerox I want copiers.com. If I am HP I want
printers.com. If I am Kleenex, I want tissue.com. If I am McDonalds, I want
hamburgers.com. If I am MasterCard, I want Priceless.com. If I am Rolex, I want
watches.com. If I am anyone THINKING I am the leader in that category, I want
the domain name associated with the category. And for all those CEO's that don't
have the VISION to say the same thing.......your shareholders should fire your
butts right now. Click on those generic names above to see which companies get it and which companies don't.

In hindsight who should own hotels.com? Look at all the
companies that blew this one that now have to pay for those reservations for
EVER. I wonder how many millions that adds up to over a years time? 5 years? 10
years? And not a single person with the vision at Marriott, Hilton, Hyatt, Ritz
Carlton, Sheraton, etc. Doesn't anyone see the HUGE GAFF that was made here? A
costly gaff. Perhaps the biggest in business history. Except of course
1800flowers and flowers.com who took out one of the oldest category leaders in
my lifetime. I can't wait to hear the story at TRAFFIC direct from the horses
mouth and ask Jim McCann how many horses asses he had to deal with before they
figured it out? So BRAVO to Corp America and Madison Ave that have yet to figure
out that 2 + 2 = 4. Branding is a great thing. But you don't turn away millions
of customers just because they wanted a hotel room or flowers and did not ask
for you by your BRAND. They asked for the GENERIC. (Read my hotels.com and Madison Ave  blog rant here.)


Imagine if this was 50 years ago and you thumbed thru the
yellow pages. You come to 'Hotels' Instead of there being you and 200
competitors, what if you could have just bought the entire listing? You look
under Hotels and ONLY your hotel came up for all those tens of millions of
people. I guess that would have no value?? I guess you don't want to be listed
first. Guess you don't want any of that? Oh you do? So why can't you make the
connection with the domain names being the same as that category heading in the
yellow pages? Except of course the domain name is much more valuable and be seen
by more people that turn into customers. By the way, how much is that yellow
page ad costing? The one you come up number 24 even though you are having a bold
display ad? How many books are you in? How many years? How many under 18 have
ever even used that antique called the 'Yellow pages?' They may go to
YellowPages.com and that single domain name is the generic for every yellow
pages book ever printed. So which has more weight? One yellow page book from
one company for one area or YellowPages.com which virtually swallowed up all the
other Yellow Pages on the planet?
'I SAY IT IS BS!
Branding without increasing sales is FAILURE!'

I could sit here and write example after example for DAYS
without running out of stories that make big business look silly and Madison Ave look like they could care less about increasing sales for their clients. They will tell you it is about 'Branding.'. I say that is BS. Branding without increasing sales is FAILURE! They
continually miss a source for new customers that provides a never ending stream
of new business every day of the year for perhaps as long as the net itself survives. A source that has no ongoing costs or
upkeep and for those so hung up on branding please consider this. If the
hotels.com domain was pointed to Marriott.com and that domain as a generic
domain with no advertising or promotion received 25,000 visitors a day. Day
after day after day. EVERY day 25,000 visitors and since when they get to
hotels.com they would be landing on the Mariottt.com  reservation site that would
provide the BRAND with 25,000 new eyeballs everyday going to Marriott.com. For
some idiotic reason few on Madison Avenue and few in Corporate America can get
their heads around something so simple like taking a generic domain and pointing it to their regular website and instead of paying for traffic from Google, they get it DIRECT from consumers typing the name to the browser bar. Does it matter that the ADDED sale came from somebody that said HOTELS instead of MARRIOTT??! Does it look different on a spreadsheet?

'CALL ME THE FOOL!'

Like I have said before, the best
branding is more sales. What would the value be of renting out another 1000 room
nights each night for 365 days? The rooms that would not be rented. The rooms
sitting vacant! Had ANY chain had the VISION to figure it out, that hotel would
have purchased hotels.com and transformed their company. That one domain name purchase would
have cost a FRACTION of building a new hotel and would have provided more
reservations than any other single source they could ever get.  But hey, laugh
at me for even suggesting how it could have unfolded if any one at any of the
hotel chains or their elite Madison Avenue agencies were not asleep at the
wheel. Call me the fool for even suggesting such an outcome. Tell me what a know
nothing I am and I don't understand about branding. Fine I am a fool but I see
all of you as failures for still not recognizing the obvious.
Do the damn math
already and see what the world could have looked like if even one of you folks
had a little vision of what was to unfold. I point to this example as it is too
late in the hotel industry to own the category. Barry Diller made you all look
like fools. Yes he did! However it is not too late in other industries. Those generic
category names may still be bouncing around the market and able to be obtained.
So happy cyber Monday. Maybe this will be the year that folks realize that
traditional media is shrinking and splintering as the new media is pumped and
hot. Maybe this will be the year that folks finally make the leap and realize
the opportunity that may be available in your industry. Maybe not. The bottom line is a generic domain name, especially one that describes an entire category, is one of the most cost effective, long term marketing and branding tools you can acquire. The cost of delay is bigger than one can imagine. Where is the sense of urgency in Corp America? Most don't actually figure it out until their competition does and by then it is too late. You already lost the  game.

By the way......have you figured out who
is responsible for competition insurance at your company or is that
somebody else's department Mr. CEO? If everyone in the chain FAILS....and they have.....then it is up to the CEO to save the day. If not, join PetSupermarket.com who has yet to open and sell items online. The CEO there is the POSTER BOY for corporate stupidity. 100 stores and no online way to purchase in 2007!! How do you EXCUSE that?


Have a GREAT day!
Rick Schwartz

*Disclaimer. I had no idea who owned the generic domain names listed above at the time I wrote this piece.




27 thoughts on “Competition Insurance for Corp America sold here!

  1. Rob Sequin

    Right on the money again Rick. You have posted so many reasons why Madison Ave, CEOs, sales departments etc should own domains but few understand or better yet, choose to remain ignorant.
    I like that”competition insurance” term but”barrier to entry” might be a term CEOs understand.
    You would have been a railroad baron had you been around in that time. You are the guy buying up all the land because you see the railroad coming to town.
    Same with the early automobile industry… you see this new thing called an automobile and you are telling the buggy whip makers about the next big thing but they don’t want to listen.
    I’m happy to be”working on the railroad” and”in the race” :-)

    Reply
  2. Bob the plumber

    Hello Rick,
    Many times you have spoken about”Madison Avenue”.
    Ok, I know it’s an avenue of New York, but that’s all.
    Is there something special here we all should know?
    I do not live in New York, nor in USA. So I have to admit that since the first day you started to reference Madison Avenue in your speeches I never understood!
    I am a morron?
    I am alone?
    You know what happen, one feel so shame to ask…
    I decided today to help all these silencious people that read your post and don’t understand:
    Please explain why are you talking so many times about this location.
    Thanks!

    Reply
  3. Francois

    Hello Rick,
    It’s not the first post you write where you glorify generic domains and treat as idiots companies that did not purchase their one.
    It MAKES NO SENSE and it’s INSANE!!!
    MAKES NO SENSE:
    ===============
    Because except for the finest generic domains that worth millions dollars, generic domain’s type in is INSIGNIFICANT.
    You know this fact better than anyone!
    As proof, recently your friend Sahar published the average revenue on portfolio having hundred thousands names, and it was around $60 per year.
    Should I laugh? Is this the bsiness that millions companies are potentially losing not owning their generic!
    INSANE:
    =======
    Because you are the first one to not sell your generic domains.
    But don’t worry, you are not alone.
    All these old domainers that own thousands names do the same.
    I do not complaint, you do what you want but please:
    STOP pushing companies to purchase their generic domains when these domains are NOT for sale for a long time or at price that makes absolutely no sense except rare exceptions.
    Response from RS:
    What is insane is comparing 150,000 domains earning $9 million annually to one generic category domain earning $9 million in the same time period. Anyone reading my blog knows I talk about great and premium domain names and I say so often.

    Reply
  4. lawrence

    just because macy’s and jcpenny’s sells clothes…that doesn’t mean they should buy the clothes.com domain name
    Response by RS:
    Fair enough. But before they decide, would it not be wise to ask how many visitors a day clothes.com gets and how many new customers that would translate to? Or would it be wiser to just let the competition have it?
    I don’t think clothes.com is the best example. But if we were talking about Levi’s they sure should own jeans.com. Which they don’t! And if we were talking about Florsheim they should own shoes.com and they don’t. They have to share with 450 other”Brands.” However if we are talking about loans.com, Bank of America and their staff was able to figure out the value of that domain. The $3 million paid for this domain returns the investment over and over and over again for as far as the eye can see.

    Reply
  5. Sai

    Well said, Rick. Definatley an eye opener for some..
    $60 per year revenue in the above example could be as a result of 600 clicks on that domain in question! That could probably mean 100 orders for the business? who knows. That is why it makes sense NOT to lose any potential customers imo..
    thanks again,
    Sai.
    Response from RS:
    Sai, they don’t seem too concerned about losing business. That is what makes me crazy. I would not employ folks that don’t understand that every potential customer is valuable. These companies are run by folks that don’t get that. They think they can piss customers away and don’t realize that a customer lost to the competion makes them WEAKER and the competiton STRONGER! I mean this is elementary business!!

    Reply
  6. Francois

    Thanks to clarify/admit you are ONLY speaking about the finest premium domains
    (these generics domains based in one word generic terms and having thousands type in daily)
    For these domains the high pricing can make sense.
    But it continue”INSANE” to blame companies to not buy these top premium names related to their business when such domains are already ALL TAKEN by domainers that DO NOT SELL them.
    Look yourself this year how many of these names has been put for sale.
    I have spend so much advertising money to discover this fact…
    Friendly
    Response by RS:
    They are taken NOW, where the hell have they been for the last 12-15 years?? I bought candy.com for low 6 figures. I have no business having a category killer like that. Where were the guys from those companies when I was acquiring this domain? They had staffs and money and I had nothing but a silly vision. They still have staffs and money and my vision is now a reality. Why is their failure blamed on the domainers? We just invested in an asset that they saw no need to have and what was pocket change for them was a life savings for some of us. Now I am supposed to feel sorry that they blew it?

    Reply
  7. Francois

    Yes Ricks, as you say:
    The finest premium domains are all taken NOW!
    We LOST a GREAT OPPORTUNITY and now we cannot do anything.
    You have been a visionary, you bet on domaining and you won:
    You deserve your”KING” nick name.
    But PLEASE don’t treat us a STUPID for life for this error, maybe we had others success.
    Myself ater having been doing internet business for around 10 years I ONLY discovered this industry around a year ago.
    Enough to say that today DOMAINING.com it’s me.

    Reply
  8. Marketing Recruiters

    Dear Rick,
    This amazing post should be required reading in B-school classrooms everywhere.
    Some respectfully submitted editorial tips:
    * Take your post
    * and break it up
    * into bullets points.
    Also, the paragraphs should be shorter.
    Same content. Just bite sized.
    Easier to scan.
    SUBHEADS MATTER
    Don’t forget to use subheads,
    like the one right above.
    Google loves subheads,
    especially if they are in CAPS or bold.
    (Lazy readers love subheads too.)
    Rick, your blog is the best ever; right up there with Seth’s. But speaking as someone who has been blogging for three years, even the best posts get passed over if they look dense. Some of my best posts are buried in the archives of my blog.
    Your fan,
    Harry Joiner
    PS — Seriously, your post ROCKS.
    PPS — Please delete this comment if you want. No disrespect intended. My sincere belief is that if enough people read this entire post, your blog will get the link love it so richly deserves. You are waaaaay ahead of the curve.
    Response by RS:
    Thank you for the tips. All valid and I will try to employ.

    Reply
  9. SM

    love to read your posts. They are filled with passion.
    But, please spend a few dollars and get a new blog design that is easier to read your posts and the comment area.
    Happy Holidays!
    btw- imagine if Zappos.com owned shoes.com –this is considering that zappos will do over $600M in sales ALL from the internet.
    Response by RS:
    There are many improvements I can make to this blog as many have pointed out over the past year. However, concentrate on the thoughts and what is said. If this was written on toilet paper it would not have any less value. Keep the focus on the subject. Maybe someday I will get a better design. But brother, I have a LOT of things on my plate and design is low on the agenda. Enjoy the thoughts and hopefully this will be read by those that should read it. Spread the word!

    Reply
  10. John Mugali

    people rent hotel rooms based on how much they can afford and not because they bumped into marriott via hotels.com
    stop pumping your portfolio while trying to buy names for lowball offers.
    stop preaching to madison ave what you won’t do even for a fraction.
    yeah, you domain buyers, pay those high prices a these auction venues when you won’t even get $300 over at domain forums where the supposedly knowledgeable people hang out…
    Response by RS:
    John, you sound bitter. If people won’t pay you $300 for one of your domain names it is probably for a very good reason. It probably isn’t worth $300. I see worthless domains all day long. Worthless. The market is smarter than all of us put together.Learn to read the market and you won’t be so bitter.
    As for $300 a night rooms, last time I checked Marriott owned a number of brands in a number of price ranges. I am sure their properties cover the market from the low end to the high end.
    Lose the bitter tone and learn from your mistakes and I bet you will be able to afford those $300 rooms.

    Reply
  11. J. Hewitt

    I had to smile while reading Rick’s post, because I can relate to this topic probably better than most.
    Let me preface my comments by saying that I operate a number of online specialty stores selling medical and healthcare products. Nothing sexy, just good old fashioned B2C, using the Internet as a channel of distribution. The stores are riding on relevant domains, powered by a sophisticated ecommerce platform. Long story short, I speak from 9 years of ebusiness experience.
    One valuable lesson learned, is that stores riding on relevant domains matter in the minds of consumers. Highly visible businesses using this model are CSNStores.com and NetShops.com. Both had sales in excess of $100 million in 2006. The secret of their success? Multiple storefront operations in underdeveloped niches, riding on generic domains like BabyCarSeats.com. Not to discount type in traffic, but a real benefit of using a generic domain to an online business is the generics marketing and branding power.
    Related to the post, for the past 8 months, we have been actively marketing a portfolio of domains related to diabetes products and supplies (DiabetesDomains.com) to obvious acquisition candidates within the diabetes and related business communities. It is a solid portfolio, for reasons stated on the site. The nickname for the portfolio is “The Difference Maker”, which is exactly what the portfolio has the potential to be when used by an internet savvy operator (key point).
    To give readers a feel for the size of the market, $132 billion was spent on diabetes in 2002. As with any industry, there are some very large entities with some of the best and the brightest money can buy, employed. And, as expected, there are a number of smaller competitors that could really benefit by using the portfolio. We have marketed one and all.
    While portfolio offers are confidential, they are not quite near where we feel they need to be. The primary challenge, in our opinion, is to overcome brick & mortar’s lack of online experience and vision. That’s the downside (not really) of being entrepreneurs and industry insiders, it takes time for others to go through their own learning curves.
    In closing, we will continue marketing and developing domains within the diabetes portfolio. In time, a light will go on in someone’s head, and they will finally “get it” just as we do. The sale price will probably be a bit higher than it is now, though.

    Reply
  12. DomainerPro

    I’m a domainer as well, and of course I’d love to be able to market my domains to corporate buyers with big budgets who understand the value of what I’m offering.
    But where does this leave the consumer? Rather than navigate to hamburgers.com and end up at a MacDonald’s website, I would much rather discover a website that provides objective reviews and nutritional information on various fast-food chains’ burgers; or reader-contributed hamburger recipes.
    Or to give a real-life example, I appreciate that Download.com provides reviews and downloads of thousands of software packages by hundreds of companies. From a consumer’s standpoint, it’s an invaluable resource. It would be much less useful to me if it simply directed me to, say, Adobe’s download page.
    I may be a domainer, but I’m also someone who values the ideals of the internet: free information and open communication. Or is that hopelessly old fashioned?
    If Madison avenue woke up to what you’re saying tomorrow and bought up all these generic domain names, it would be great for the corporations, but where’s the value to the consumer?

    Reply
  13. Bob the plumber

    Can someone finally have the amability to explain to US foreigns what can be found in”MADISON AVENUE”?
    And why are you all speaking about this specific avenue of New York?
    It’s evry frustrating,
    USA is not the center of the world, people that dont leave in USA dont understand ANYTHING!!!!

    Reply
  14. Martin Kalnins

    Hello Rick,
    I wouldn’t call myself a domainer, but last year during the .mobi landrush I got a bit carried away and spent about £2000 GBP ($4000) on various names which I think (and hope) will aid my business venture in a certain catagory of search directory (obviously can’t say which one).
    Well, obviously after buying these .mobi domains I thought I was sitting pretty, having snapped up some of the main key phrases for my proposed directory from under the noses of some of the big players in the industry. Then came the dawn of the iphone, where if you believe all the hype – any website will do – and since then I have put my plans on hold as I would be working on a very low budget to both build and launch the directory.
    So as I don’t believe in throwing away good money after bad, I’ve been trying to make sence of the iphone v dotmobi debate.
    Then I discovered your blogs and what the hell – your right you can’t stop to worry about other people’s business or you won’t get on with your own.
    I wish the backers of the dotmobi would show more gumption and some leadership in this time of uncertainty.
    If they want dotmobi to work and people to embrace the idea they ought to follow it up with action.
    Thanks Rick
    Regards from the middle of England
    Martin

    Reply
  15. DomainerPro

    Bob the plumber, do a Google search! Madison Avenue is where many advertising firms are located in New York and is shorthand for”the advertising industry.”

    Reply
  16. Jeff

    Hello Rick,
    I’m doing a blog post on how to get started as a domainer. As part of the post, I am asking several leaders in domaining what their top tip is for someone just starting out in the field. I’d really appreciate if you could take a moment and email me a brief reply outlining this. Thanks in advance for your consideration.
    Jeff

    Reply
  17. kelly lieberman

    I have to tell you that right now I am so darn happy that”Mad Ave.” and”Corporate” DON’T get it!!
    It gives me the opportunity to get in deeper into this game while they are still napping!
    I am still making Awesome domain buys at GoDaddy. Honestly, there are some unexplored niches where nobody is in my sandbox yet.
    They may be a future play, but the minute”Mad Ave” gets it, time will accelerate and there will be so many shovels in the sandbox I may be done playing this game and on to the next…
    I am so enjoying this business. Rick, thanks to guys like you, and the information you have shared, many of us Newbies (Me, only July of this year -685 domains!) will reap great rewards! Thank you for that. You are aquiring Karma for paying it forward. I can’t wait to meet you one day and thank you in person!

    Reply
  18. kelly lieberman

    I now own: madisonavenuescrewsup.com
    and
    madisonavenuescrewup.com
    Rick,
    Choose either and let’s get something started here. Maybe Madison Ave will pay attention to a blog listed at the top of Goggle every day. We will throw in up to the minute cnn feeds or something… Yours for the taking. I would like to see some press on this. We can sell adverts and all the money could go to charity etc.. Let me know, They are a gift to you, for all your karma you have built up helping others. Regards, Kelly

    Reply
  19. SM

    Why are you so bitter? I tell you I enjoy reading your posts and ask that you make your website”more” reader friendly and the response I get from you is”I’m a phrophet and it doesn’t matter if I write my thoughts on toilet paper”. WTF?
    With all that money you should be able to hire a consultant and learn how to be more humble during this Holiday season.
    Just mind boggling!
    Happy Holidays!
    Sincerely,
    A Devoted Reader
    Response by RS.
    First of all, DON’t put quote marks on something I did not say. I don’t need a”Devoted reader” that misrepresents what I say and even worse quotes something I did not say. Below is my original response so folks can make up their own mind. As for bitter, I was not then but I may be now. I don’t like troublemakers!
    Here is the actual post without your misrepresentation.
    “There are many improvements I can make to this blog as many have pointed out over the past year. However, concentrate on the thoughts and what is said. If this was written on toilet paper it would not have any less value. Keep the focus on the subject. Maybe someday I will get a better design. But brother, I have a LOT of things on my plate and design is low on the agenda. Enjoy the thoughts and hopefully this will be read by those that should read it.”

    Reply
  20. andy kelly

    Anyone with half a brain knows that premium generic domains that attract great direct naviagtion stats are golddust ~ the only issue is how much you are willing to pay for them – It is complete folly for a leading company to shun the prime generic/s for their respective businesses. If they buy they secure the traffic and sales for a lifetime (assuming they don’t fail to renew it) Even at this stage of the game it amazes me how uneducated many business leaders are when it comes to the tangible value of prime domains.
    andy kelly
    http://www.urlacademy.com

    Reply
  21. Shaw30Marsha

    Following my own exploration, millions of people on our planet get the loans at various creditors. Thus, there’s good chances to find a secured loan in any country.

    Reply
  22. Jeff Schneider

    Hello Rick,
    Top of rthe day to you! The catalyst for the big dogs to pursue us begins. This is just TOO MUCH FUN !
    Gratefully, Jeff Schneider, (Contact Group)

    Reply
  23. David

    I can not believe people didn’t get what you wrote all this years. That’s very weird.

    Reply
  24. Jeff Schneider

    Hello Rick,
    Bingo! It looks like Facebook just bought some insurance does it not? Will be watching to see how they use it. They probably figured they would move on it before the farm bureau talked with others. TIMELY post Rick! Congrats
    Gratefully, Jeff Schneider (Contact Group)

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.