6 ways to expand your margins as a web hoster

As a domain registrar, our perspective on the domains and web hosting market is deeply intertwined with how you, as web hosters, navigate your position there. In a competitive landscape marked by slimming margins, increased conglomeration, and intense competition, it can be hard to stand out. In this article, we are sharing six tips that will help differentiate your business from other players on the market.

Broaden your choice of domains

We want to serve our customers the best we can as a registrar, which is why we choose to offer all publicly available domain extensions. Our experience in the domain industry shows that the choice of TLDs you offer can significantly impact your market appeal. While traditional TLDs like .com, .net, and .org are universally appealing, offering a diverse range of niche TLDs can help you target specific market segments more effectively. For example, extensions like .ai, .io and .ly are currently in high demand in the tech industry. Combining a large offer of TLDs with the possibility of purchasing high-value domain names on the domain aftermarket can help you draw in new segments of customers.

Bundle for better value

Another effective way to expand margins and stand out is by bundling domains with essential web services. Besides offering more value to your customer, bundling also increases the average order value, which is crucial in a market with inherently small per-product margins. Common bundle products for web hosters include SSL certificates, DDoS protection, email services, and CDNs. While consistently popular, the competition for these products is quite strong. Besides offering classic bundling products, you could also try to differentiate yourself with more niche products your competitors may not offer, such as a DMARC solution or a VPN service.

Focus on customer experience

A great customer experience can make or break your brand, but that doesn’t just start or end with your support interactions. Customer experience spans all interactions between your customers and your business, including your website, your control panel, your automated emails, and your customer onboarding journey. Especially as a smaller or medium-sized company, delivering a great, personalized customer experience is a way to stand out from the crowd, particularly compared to larger businesses where customers may feel like a number.

Create relevant content

Effective marketing is vital to communicate the value of your unique offerings, and content is one way to stand out here. Many hosting companies do not prioritize content and neglect their websites and social media pages. From tried-and-true formats, such as blogs and landing pages, to newer formats like e-books, videos, and podcasts, great content will help your business stand out and make it easier for people to find you organically. Besides organic content, consider the benefits of targeted advertising to reach specific demographics that are more likely to convert, such as tech startups for .io domains or local businesses for geographical TLDs.

Be strategic about pricing

In a competitive environment, pricing strategy is critical. Consider implementing tiered pricing for bundled services to cater to different customer segments, from one-person businesses to larger companies. You can also strategically use promotional discounts to attract new customers or come up with seasonal offers to maintain customer interest and retention. Make sure that these promotions do not erode your baseline margins by compensating with bundling and upselling opportunities.

Use market data

Utilizing data analytics is crucial for understanding which TLDs and bundled services are most popular and profitable with your customer base. Learning more about this allows you to adjust your offer and focus on your most lucrative customer segments. Tools such as Google Analytics can provide you these valuable insights into customer preferences and behavior, helping you make informed decisions about where to allocate resources and how to structure promotions.

Conclusion

For web hosters in today’s fragmented market, success involves more than just offering web hosting and domain registration. By strategically selecting and bundling TLDs and associated services, providing great services, and using content and data to your benefit, you can enhance your value proposition and expand your margins. As your domain registrar partner, we are here to provide you with the support and products you need to succeed and stand out in this crowded market. Remember, every service you add not only increases your revenue per customer but also enhances customer stickiness, which is invaluable for long-term business sustainability.