One of the earliest steps you'll take for your business is choosing and securing a domain – an identifying name that you'll use for your website. Registering a domain name allows you to take the next steps of building, hosting, and marketing your website. So many entrepreneurs see this as a step to complete as quickly as possible; they choose the most convenient domain without giving it much thought.

However, your domain can have a massive impact on your company's future success. It's not a decision to take lightly.

Proving the Value of a Domain

You might be skeptical about the real value of a domain name. You might think, it's just an address to your website; it doesn't affect your core brand, your products, or your services. 

But it doesn't take much research to see just how valuable domains are. It's true that you can pick up a basic domain for just a few dollars, but the best domains in the world are highly sought after by wealthy, established entrepreneurs, thus driving up the price significantly. Why? Because they know just how important and valuable the right domain can be for their business.

You may find it surprising but the domain Voice.com was sold in 2019 for $30 million, one of the largest publicly reported sales of all time. Though keep in mind that most people and companies generally don't report sales publicly so there could be sales of much higher value out there. In fact, according to a SEC filing Cars.com is valued at a whopping $872 million. Not the business – the domain.

And it's not just the top few domains selling for exorbitant sums. Hundreds of domains are worth millions of dollars or more. 

The Impact of a Domain Name

Why is it that a mere domain could be worth millions of dollars? It's because your domain has such a substantial impact in so many areas:

• Authority and reputation. Your domain is often the first element of your business a potential customer will see. They'll notice your website in search results or see it in a marketing campaign. Accordingly, they'll form a first impression of your business based on the quality of your domain. If it seems uninspired or cheap, it's not going to land well. But if you have a short and catchy domain, it's immediately going to make your company look better.
• Memorability. Existing customers can bookmark your site for easier recall later, but you still need to overcome the hurdle of getting the first visit. After seeing an ad for your website, or hearing it in a discussion with a friend, a person will have to remember your domain to use it effectively. Memorable, easy to type domains tend to attract far more visitors as a result.
• Clarity and knowledge. Oftentimes, a domain lets people know what your business is about. A random string of characters like afdhuioxuou.com means absolutely nothing. But a domain like Cars.com immediately tells you something; this website is in the automotive industry, and it probably sells cars. This can help people figure out what you do faster and more reliably.
• Ease of use. How easy is it to type your domain name and visit your website? How easy is it to talk about? If it's hard to spell, if it's hard to pronounce, or if it can be butchered easily, your business is going to have a much harder time building more visibility and recognition.
• Search engine optimization (SEO). Your domain also has an impact on your success in search engine optimization (SEO). In case you aren't familiar, SEO is a collection of strategies meant to help you rank higher in search engine results pages (SERPs). A successful SEO strategy will increase your rankings, helping you earn more brand visibility and therefore, more traffic. The right domain name can help you optimize for specific keywords and phrases searched by your target audience, making it easier to rank in competitive pages.
• Other forms of marketing. Effective domains can also greatly increase the potential of your other marketing and advertising campaigns. If your domain is short and easy to spell, it's going to be easier to brand and feature as the centerpiece of your marketing collateral. If it's catchy and memorable, it's going to do the heavy lifting in your ad. Accordingly, a good domain can instantly multiply the results of any marketing campaign.

How to Choose the Best Domain

Good domains have a handful of features in common:

• Brevity. Short domains are better, all other factors being equal. They're easier to remember. They're easier to type. They're harder to misspell and/or mispronounce. And they can even save you money on marketing and advertising in the right context.
• Clarity. Try to imply what your brand is about. Descriptive domains work well; if you can't get one, get a brandable domain that subtly implies what your company does, its mission, or value proposition.
• Memorability. "Catchiness" is somewhat of a subjective matter, but great domains are always easy to remember. Unique, clever, yet familiar ideas often perform best here – and of course, short domains help in this regard as well.
• Keyword inclusion. Unless you're going after a specific brand name, try to include a target keyword or phrase your customers might search when looking for a company like yours. It will lend you massive SEO benefits.
• A .com extension. Though many extensions exist, .com is still the most authoritative, trusted, and valuable overall.
• Price. Because the perfect domain will be instantly recognizable by entrepreneurs and customers around the world, it drives up its price. Getting a good domain for a fair price is often better than getting the perfect domain for an egregious one.