P-015 DRAFT: Yearly November Half-off Domain Sale

Governance Proposals
1

Voting period:

14 days

Categories:

Social Proposal

Request for Action

Constitution Amendment

Abstract:

Establish a month-long half-off sale each year.

Rationale:

Implement the half-off sales technique in order to energize community activity, increase adoption of tez names, lock in longer domain renewals and gain more long term users.

Details:

A yearly month-long half-off sale for a cryptocurrency-related domain name service (DNS) can provide several specific advantages:

  1. Increased Adoption: A significant discount can encourage more users to purchase and register domains, especially those who may have been hesitant due to the cost. This can lead to a broader adoption of our service.
  2. Market Penetration and Brand Visibility: Offering a substantial discount for an extended period can help penetrate the market more effectively. It can attract new users who might not be familiar with our service, thereby increasing brand visibility.
  3. Locking in Long-Term Users: Since domain name registrations are typically renewed annually, attracting users with a discount could lead to long-term renewals, securing a steady revenue stream for future years.
  4. Incentivizing Bulk Purchases: Users might take advantage of the sale to register multiple domains at once, leading to higher immediate revenue and increasing the likelihood of future renewals and engagement with our platform.
  5. Promoting New Features or Services: If the Tezos Domains service is rolling out new features or integrations, a sale can be an excellent way to draw attention to these updates, encouraging users to try them out while the discount is available.
  6. Customer Loyalty and Retention: A well-timed, predictable sale can create customer loyalty, as users will plan to renew or register domains during the sale period each year. This helps in retaining users and maintaining steady engagement with our platform.
  7. Generating Buzz and Community Engagement: A month-long sale can be promoted within the crypto community, on social media, and through influencers, generating buzz around our service. This can lead to increased word-of-mouth referrals and community-driven marketing.
  8. Clearing Out Expiring or Unclaimed Domains: The sale could help move domains that are about to expire or have not yet been claimed, ensuring they find a user and don’t remain dormant.
  9. Competitive Advantage in a Niche Market: In the competitive world of cryptocurrency-related services, offering a significant discount can differentiate our DNS service from others, attracting users who are looking for cost-effective options.

The suggested sale month is November, set to go along with other traditional sale events such as Black Friday and Cyber Monday.

Specification:

  • Modify domain price to be half-off on the first day of the month agreed upon (Dev team) [note: still looking to verify this can be done; it might happen when proposal is executed]
  • Modify domain price to be normal price on the last day of the month agreed upon (Dev team) [note: still looking to verify this can be done; it might happen when proposal is executed]
  • Perform yearly analysis of half-off month effectiveness (Dev team & CM team)
  • Perform yearly month-long promotion for the half-off sale (CM team)
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2

If we did this it would really hurt us without even achieving our goals—moreover preventing us from achieving those goals in other ways afterwards. Here’s why it will backfire:

  • Delayed Renewals (Rational Expectations): Customers would hold off on renewing their domains at the regular price because they expect the half-off sale. This results in a drop in revenue during non-sale periods, as customers wait for the discount to renew.
  • Post-Sale Drop (Intertemporal Substitution): After the sale, customers who miss the discount may delay renewing altogether or allow their domains to expire, expecting to catch the sale next year. This reduces the likelihood of timely renewals after the promotion ends, leading to longer-term revenue declines.
  • Perceived Unfairness Leading to Reduced Customer Retention (Price Discrimination): Customers who renewed before the sale would perceive it as unfair that others get a discount they didn’t receive. This can lead to dissatisfaction and reduced loyalty, as customers may feel undervalued, increasing the chances of customer churn.
  • Brand Dilution (Prestige Pricing): Introducing an annual half-off sale would hurt our brand image. Offering this kind of annual half-off sale will undermine the perception of exclusivity and quality, turning it into a bargain product, at best and a desperate platform at worst. which contradicts the brand’s desired positioning. That will also increase churn and customer loss.

Let’s please not do this.

1 Like
3

I can’t agree with any of these. Can I get a second/third delegate here to agree with @Kevin?

The feedback did elicit a chance I think we should make to the proposal, in that we should run a trial sale month year (i.e. November 2024) and adjust based on the outcome. We should not sign up for this yearly even, if it does indeed prove to be unsuccessful.

Here are my responses:

Delayed Renewals (Rational Expectations)

Kevin’s argument:
Customers would hold off on renewing their domains at the regular price because they expect the half-off sale. This results in a drop in revenue during non-sale periods, as customers wait for the discount to renew.

My response:
While it is true that some users may wait for the sale, the overall benefit of increasing domain registrations—especially new users—outweighs the short-term effects of delayed renewals. New users gained during the sale will create a larger base of potential renewals in future years, expanding the customer pool.

Post-Sale Drop (Intertemporal Substitution)

Kevin’s argument:
After the sale, customers who miss the discount may delay renewing altogether or allow their domains to expire, expecting to catch the sale next year. This reduces the likelihood of timely renewals after the promotion ends, leading to longer-term revenue declines.

My response:
This argument assumes that users will consistently time their renewals around the sale. However, domain renewals are often time-sensitive, with users needing to renew domains to avoid losing them. While some users may wait for the next sale, many will choose the convenience of immediate renewal.

Perceived Unfairness Leading to Reduced Customer Retention (Price Discrimination)

Kevin’s argument:
Customers who renewed before the sale would perceive it as unfair that others get a discount they didn’t receive. This can lead to dissatisfaction and reduced loyalty, as customers may feel undervalued, increasing the chances of customer churn.

My response:
The introduction of a predictable, annual promotion can actually increase customer satisfaction, especially if it’s communicated transparently well in advance. Customers will have clear expectations of when discounts will occur, and they will plan accordingly. Loyalty programs or exclusive discounts for long-term users can also ensure that existing customers feel valued.

Brand Dilution (Prestige Pricing)

Kevin’s argument:
Introducing an annual half-off sale would hurt our brand image. Offering this kind of annual half-off sale will undermine the perception of exclusivity and quality, turning it into a bargain product, at best and a desperate platform at worst. which contradicts the brand’s desired positioning. That will also increase churn and customer loss.

My response:
Rather than diluting the brand, a well-structured and well-timed sale can boost engagement and build a community around Tezos Domains. By framing the discount as a reward for the community’s growth and engagement—especially around major events like Black Friday—it emphasizes the platform’s active role in supporting users rather than cheapening the service. Additionally, the DNS market operates differently from typical consumer markets, where users prioritize utility over exclusivity.

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In situations such as these, I find the best approach is to define some KPIs that we all agree will accurately provide a picture of the health and success of the campaign. Then we should proceed with planned trial, and reconvene after the conclusion of the trial to review the KPIs and determine if it was a success and if it moved the needle in valuable ways, or not.

I think there are valid arguments on both sides, and traditional sales & marketing techniques do not always translate to web3, so a trial is indeed warranted. I just want to make sure we clearly define and track those KPIs that are going to give us an informed view afterward.

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