Domain name added trust to brand, founder says.
Insurance brokerage and comparison service Cover paid $825,000 to buy the domain name Cover.com last year, the company disclosed.
Co-founder and CEO Karn Saroya released details of the purchase in a blog post last week.
The company worked with brokers to buy the domain name from DigiMedia. $75,000 of the total payment was for the domain brokers, so the net was $750,000.
Saroya explained why it was a good investment:
We sell an intangible product and at the end of the day, we’re in the trust business. Owning Cover.com has lent an extra level of legitimacy to the brand and this, in turn, has translated into sales.
We have seen firsthand how it helps get people over the hump when it comes to investing their money with us. Immediately after moving to Cover.com we saw our conversions rise, largely because customers would cross-reference our app on the internet before they made the purchase decision.
Saroya noted that it doesn’t make sense for all businesses to spend this much on a domain, especially very early stage companies.