THS Articles

How Web Hosting Resellers Can Protect Their Customer Base

By Eric Rice

As a reseller, you encounter a variety of challenges to the health of your business every day. Spam, stretched resources, razor-thin profit margins, hackers, phishers, and, of course, competitors all pose challenges to your business. In some ways, your own parent registrar also competes with you, although not purposefully so. This quiet competition is frequently a function of the structure of the registrar’s relationship. In fact, the very design of the reseller-registrar relationship leads your registrar to communicate with your end-users. There are steps you can take, though, to tend to your customer base.

First of all, there’s no need for paranoia among resellers that their registrars are trying to steal from them. In fact, no data exists to suggest that registrars taking business from their resellers is a big problem. In fact, ICANN says it has not received any complaints from resellers alleging that their registrar is trying to lure away their customers. Nonetheless, it’s worthwhile to illustrate how competition naturally occurs; how resellers can protect themselves from surreptitious or “structural” competition from their own registrars; and what you can do to care for your business.

Registrars who sell domains wholesale and retail are inherently in competition with their resellers. You’re both in the business of selling and managing domains. In addition, most of the retail registrars are no longer simple domain companies. Domains have become the hook for selling hosting, email and other more lucrative services. These service offerings used to be more the province of resellers. But now registrars offer most of the same services as their resellers.

Of course, in competing with one another, your registrar likely enjoys several major advantages over you. In general, it has a larger marketing budget, stronger brand awareness, more overall resources, and can offer domains more cheaply than you. Your registrar also has two other huge advantages: your customers often turn to them directly for support, and your registrar routinely contacts your end-users to send domain renewal notices and other legitimate information. This often prompts the end-user to contact the registrar for one reason or another.

Despite the skewed competitive field, most registrars aren’t bent on alienating their resellers. Nor do they fiendishly plot to steal customers from their resellers. Since they profit from the sales generated by their resellers, they’re not keen on upsetting you and potentially tarnishing their reputation in the industry. A handful of resellers have reported their customers receiving direct solicitations via email from their registrar, but this isn’t the norm. On the other hand, registrars can take business from you in numerous ways. All registrars have your clients’ contact information because it is a standard part of the WHOIS process. And, most registrars use WHOIS information in their own marketing databases. They simply don’t do a good job of comparing and vetting the names of your clients from their own marketing lists.

Registrars communicate with your end-users in other ways as well. As required by ICANN, registrars must send your customers emails about domain renewal deadlines and updating WHOIS records. This direct contact with your end-users, as well as the public information identifying the registrar in WHOIS profiles, lets your customers know that their actual registrar is not you. If such an email spurs your customer to call the registrar about the renewal or for other information, it gives the registrar an opportunity to upsell them. It also prompts the end-user to wonder who the registrar is, why they bought from a reseller, and if they might get a better deal by going directly to the registrar.

Another way that registrars can impinge on your business is via support calls they field from your customers. Since your registrar actually controls the domains of your end-users, the registrar’s information is what your customer sees in the public WHOIS listing. As a result, they routinely call your registrar when they have an issue or question. Since every industry trains its customer service teams to use support calls to sell customers more products and services, registrars could use such calls to upsell. Since your end-users routinely might call your registrar for a variety of support issues, your registrar may discuss with them other services that you also offer. Make sure your registrar refers customer service calls back to you to try to handle first before they get involved.

Resellers can help themselves by providing stellar customer support to their end-users, and consistently communicating well with them. Since ICANN, nor any other governing body for that matter, has a relationship with resellers, competition between registrars and resellers “is a customer service issue,” states Tanzanica King, Communications and Operations Specialist for ICANN. Part of communicating well with your customers entails maintaining current contact information. Poor communication with end-users is frequently due to a reseller sending important information via email to outdated addresses. Resellers who don’t deliver solid support force their customers to seek out their registrar for renewal and DNS assistance. This also makes the end-user aware that they are not dealing with the actual registrar of their domain, but a reseller. So, by not providing adequate customer support, you lead your customers to your registrar, and run the risk of them buying services and products from your registrar, instead of you. Act like you’re the registrar for your customers’ domains. Update them on important information. Provide great, responsive support, and keep them turning to you when they need help – and more services.

You should also seek tools to manage large volumes of domains simultaneously, as opposed to doing so on a one-on-one basis. This will help ensure you do not become overwhelmed by the demands of sending and responding to individual communications with hundreds or thousands from your end-users, which can impact the quality and reliability of your customer service. Also consider allowing your customers to renew domains on their own.

Despite the fact that most are reputable, registrars still must be diligent about erecting and enforcing strict barriers and guidelines to ensure they do not compete with their resellers. Registrars should train their staffs well in their procedures – especially their customer service representatives – so that they don’t upsell the end-users of their resellers, nor inadvertently send them prospecting emails and other solicitous communications.

HOW TO PROTECT YOUR CUSTOMERS
Since there no policies regarding competition between resellers and their host registrars, what can you do to take care of your business?

• Make sure your registrar makes it far more expensive for end-users to register domains directly with them than with one of their resellers. Interview a registrar before becoming a reseller with them. Find out if they undersell their resellers.

• See if your registrar offers any tools or makes any effort, via their web site, customer service chat/email or via the phone, to help end-users contact their reseller first about issues.

• Custom brand emails you send to your clients, as opposed to forwarding your clients emails from your registrar. This will ensure they open your emails, and reinforce to your customers that they are dealing directly with you and should contact you first when/if they have a question or need.

• Do research on a registrar before joining them as a reseller to determine if they mix selling wholesale with retail. See if they put their emphasis in their marketing on users retail or on supporting resellers. Choose a registrar with a strong focus on resellers as their bread and butter.

• Communicate consistently with your end-users, and update customer contact information frequently.

• Act like a registrar, and keep your customers turning to you for support, new products and services.

• Ask your registrar if their support staff is trained to upsell services during customer service calls. Do they ask callers if they registered directly with them or through a reseller? If the caller says they registered with a reseller, is it the registrar’s policy not to upsell them, but to refer them back to the reseller?

• Ask your registrar under what circumstances they are allowed to contact your customers directly, if at all.

• Be sure to read your reseller’s agreement before you sign. See if the agreement states that the registrar will not solicit your customers.

• Urge your clients to forward you any emails and direct mail they receive about their domains that are not from you.

• If you manage a handful of individual domains, be sure to check on how much advance notice your registrar gives you, or your customers, when a name is up for renewal or about to expire. How many times do they state they will try to contact you? How much time do they give domain owners to respond?

• Ask your registrar what their policy is if the customer of a reseller asks about switching their registration directly to the registrar?

HOW TO RESPOND, IF YOU MUST
In today’s instant feedback, always-on information age, online companies can pay dearly when examples of bad faith become public. Most registrars are ethical and strive to serve their retail and wholesale customers well. For those few who are slow to tweak the institutional configurations that lead to competition with their own resellers, or the very small percentage who prize short-term financial gain more than their resellers or their reputation, take your grievances public. Save all email and chatroom complaints you file with your registrar, and make notes on phone conversations. You can post the information on domain name oriented websites frequented by other resellers and complain to ICANN via their website (www.icann.org). Finally, contact the media that cover the domain industry. While the services and products offered by resellers and registrars will likely to continue to overlap, both parties must work together to further nurture amicable and mutually beneficial relationships.

About the Author:
Eric Rice is General Manager for BulkRegister (www.BulkRegister.com), a leading global B2B domain name registrar that provides comprehensive domain name services and secure portfolio management to its 28,000 members, including an extensive reseller network and enterprise customers. Eric can be reached at erice@bulkregister.com or 410-234-3318.