Now Namecheap Affiliates Can Rip Off Their Readers

namecheap_logoFor 4 years I have been an advocate of using Namecheap for domain registrations. They have had the occasional technical problem, but overall I am extremely satisfied with their service, their interface, and above all knowing they are not going to switch off a domain just because of a single spam complaint.

At least one of Namecheap’s major competitors will switch off your domain and force you to pay a huge processing fee to switch it back on, even if the spam complaint was for an email that just listed your domain, or an affiliate link that went to one of your sites, sent by a 3rd party.

That can happen at any time, and Sod’s / Murphy’s / Finagle’s Law it will happen at the wrong time, such as a major product launch.

I have been told by friends that Moniker are also reliable in this regard, though I have never used them for normal domain registrations.

Some time ago during other support requests with Namecheap I asked about a possible affiliate program, as whilst it would never pay big on domains, it could offer a little more on things like SSL certificates and maybe hosting.

Namecheap Affiliate Program… Disappoints

Update: Namecheap have announced that most coupon codes can now be used with their affiliate program

Here is their announcement email in full

You appreciate NameCheap’s easy to use interface and responsive customer support, so why not earn money letting others know about it? We now have an Affiliate Program so you can make money spreading the word about NameCheap. Earn 15 percent any time someone buys our services for the first time from your affiliate link. Then use those funds towards other NameCheap purchases or eventually deposit them into your PayPal account.

Signing up takes less than two minutes. Just login to your NameCheap account and choose “Affiliate Program” from the right hand side. Follow the instructions and you will be provided with a unique affiliate id. You will get a unique affiliate URL which you can either advertise by itself or with a banner. For more information, please see this page.

If you have any feedback about our program, please send our Marketing Specialist an email at michelle(at)namecheap.com. We are very happy to finally offer this to the many people who have asked about it for some time now.

Get the Savings and Support You Love from NameCheap Hosting

You’ve come to love the support you get with your domain names and we promise you won’t be disappointed with our web hosting. You can use the following coupon codes at our website:

SCHOOLTIME – 10% off any shared, business and reseller package
HOSTSWITCH – 15% off any shared package and business package
USE4VPS – 10% off any VPS package

This Month’s Domain Coupon Codes

Save money on all your new domains with coupon code DREAMTIME. For transfers, use coupon code SWITCH2NC.

Have a wonderful September and thank you for choosing NameCheap!

Note: as bolded (by me) the affiliate program only covers the first sale, and all the coupon codes Namecheap have traditionally offered.

Now lets pull some info from the referenced page

* Earn 15% commission on any sale(First purchase only)
* Commission upto 15 days of referral
* Coupon code can’t be used with Affiliates
* Commission on new purchases only
* 30 day waiting period
* Commission reversed on refunded orders, cancelled orders or fraudlent orders

Update: Namecheap have announced that most coupon codes can now be used with their affiliate program

So as someone who recommends Namecheap to others as a better alternative than some of their competitors, especially for any internet marketers who may be launching products with affiliate programs, or running mailing lists (even when using a 3rd party autoresponder service), I have a choice to make.

  1. Use an affiliate link, and make a minimal commission on a first domain sale that would most likely happen as a test, before someone transfers more domains, oh and whoopee maybe 15% of 1 month webhosting or a cheap SSL.
  2. Inform my readers of the cheaper prices they can get by using a coupon, which thus forfeits the affiliate commission, but my readers will thank me.

For me the choice is obvious, I want my readers to get the best possible value. Affiliate commissions should never be at the expense of customer value, in the same way product producers should never get in a price war with their own distribution channels – it is just bad business.

Update: Namecheap have announced that most coupon codes can now be used with their affiliate program

The obvious solution for unscrupulous affiliates would be to create an coupon site for Namecheap, but only list old coupon codes that are now invalid.
A significant percentage of users would just purchase regardless, though chances are anyone looking specifically for a coupon in Google would already have an existing Namecheap account.

The only people I can see gaining value from this affiliate program are search services for domain names, but they might earn more from another services which pay significantly more for hosting referrals or a reseller system.

Michelle is going to think I am picking on her as she represents Namecheap, and was previously working with Volusion.

Namecheap are still great, I will still recommend them, but I am not going to push an affiliate link that offers my readers a worse deal than using a coupon that is widely available.

With affiliate programs or CPA networks offering $1-$2 just for an email signup, and hosting often offering $50-$100 for a new customer, I find it amazing that Namecheap are being cheap on customer acquisition. Surely they have enough data to be confident of their lifetime customer value for genuine new referrals.

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Comments

  1. michellegreer says

    Andy,

    First of all, you have me on chat and you knew you could come to me with these concerns before publishing this article. You know I do and have always listened. Come on now. We are the little guy just trying to make it easier and less obtrusive to buy domains.

    Secondly, NameCheap would like nothing more than to offer coupons to our affiliates. Seriously. The easier we make it for you to sell, the more you would. However, NameCheap works on slim margins already. If we gave you a portion of what we made, plus a coupon code, we would literally lose money. I can't imagine any customer who is happy with our service would actually want us to lose money selling domains.

    Andy, what would you do if you were in our shoes? People asked us for an affiliate program, and we gave them one. We can't justify losing money to do so. What is your solution to this problem?

  2. says

    I could easily reverse that logic and ask you how many affiliates you contacted in preparation of your affiliate program who practice affiliate marketing as brand evangelists rather than just coupon sites, domain research and top 10 lists of domain hosts.

    The only thing I criticized in the whole of this post was the affiliate program, every other aspect is a solid testimonial.

    The most telling of the tweets I received you might not have picked up.

    @AffiliateStuff “LMAO!! You said it, but we were all thinking it ;)”

    You might not know Kirsty McCubbin but she was the A4U Affiliate Marketing Blogger of the year, whose opinions are highly respected, and she doesn't pull punches either.

    My solution? Give me $0.05 – $0.10 on all domains for the first year (on current prices, but see later, you could increase prices and pay more – improved value proposition)

    Not sure if it is currently available, but Formula 5 from Stompernet would give you plenty to chew on http://andybeard.eu/adtrackz/go.php?c=f5mba (aff)

    If I bring someone across with 100 domains, that must be worth $5 – $10 to you

    Give me a bigger percentage on hosting which having just compared numbers is competitive with VPS.net but without the “cloud” features. It wouldn't actually hurt you to just become one of their resellers – the margins with volume are pretty good.

    Just 2 days ago I was chatting with a guy who has multiple websites just about to do a huge product launch… who had his domain with Godaddy.

    One of the strong pieces of advice I gave him was to switch to Namecheap or Moniker, and do it yesterday, as it is a huge risk.

    As an affiliate authenticity with your audience is your most valuable commodity. The money isn't in the list, but the relationship with them.

    I wouldn't want Namecheap to go bust just so I could make money recommending them, but if you are going to have an affiliate program, it has to be one that makes sense for all parties.

    Affiliate authenticity is your strongest weapon, because most major affiliates have heard horror stories with your competitors. It is something that can overcome price differentials – significantly.

  3. says

    I'm a relatively new NameCheap fan (I started transferring away from GoDaddy after the last Superbowl) and was hoping they'd roll out an affiliate program since I get asked for recommendations pretty regularly.

    Andy's last paragraph about customer acquisitions addresses the “losing money” question. It's not at all unusual for a business to lose money on the initial sale, because they know the lifetime value of a customer and that they will make a profit over time.

    Obviously, I don't know what NC's numbers look like, but I'd tend to think that people intentionally using a registrar (vs. just buying a domain as part of a hosting registration process or through TypePad/WordPress.com/etc.) are the type of people who will probably go on to buy another domain.

    Add to that the fact that it's generally a pain to switch registrars, and I imagine you typically retain customers (of even just one domain) for several years, as long as you don't tick them off (like GoDaddy does :) ).

    I'm with Andy; I'll forgo the affiliate program rather than offering my clients a worse deal. And if the lifetime value of a NC customer is that low, it might be better to not offer the affiliate program at all, if it's going to generate ill-will among customers who later learn they paid more than they had to as a result.

    Don't get me wrong; I like NameCheap and plan on buying domains there for the foreseeable future. The affiliate announcement is just a bit disappointing, particularly when compared to the programs of other, less-recommendable registrars.

  4. says

    It is a strong testimonial for Namecheap, and their largest competitor seems to make enough to run Superbowl ads every year – maybe from the $200 fees for reactivating domains after a spam complaint.. at their convenience

  5. says

    I'm an advocate of namecheap vs other registrars and it's great to see an aff prog coming to fruition after 3+ yrs of waiting.
    The terms weren't quite what i expected, and i guess it's better than nothing.

    I'm with you in putting the reader/customer's interests above my own profit, so it's nice to see a little recognition from namecheap.

  6. says

    I keep on thinking of so many ways that they could add extra value on the backend that would be revenue producing.
    The Ill-will or “buyers remorse” is a danger

  7. says

    Affiliation and domain names is bad business :(
    A year ago 1&1 has paid 1usd for a new customer if he registered just one domain name.
    Now they pay nothing!
    I think the only way to make money with hosting related products to offer coupons as a reseller (godaddy?).

    Btw. I don't like the namecheap interface, dynadot''s interface is much faster ;)