Is revealing domain name renewal rates — Why Donuts
By predicting and revealing renewals, Donuts hopes to get registrars and domain name investors on board.
Donuts has posted an update on its renewal rates, showing an overall 68.4% rate following ten days.
The update also highlights a reason Donuts predicted its renewal rates ahead of time and has continuously revealed its rates now that domains are expiring: It’s marketing.
Co-founder Richard Tindal explains that renewal rates on Donuts domains are much higher than those of .com domain names registered in the same year. This is bad for registrars, he reckons:
Why ought to you care that fresh .COM names are renewing at 50% or lower. The entire population of .COM renews at 72% which means it’s a healthy TLD, right? Well, not if you’re a registrar who’s deciding where to spend marketing dollars on fresh client buyout in 2015. If you spend those dollars acquiring more .COM clients you’ll need to figure a 50% renewal rate into your calculation of lifetime value / return on campaign. Don’t calculate that return at 72%.
I don’t think this is a completely accurate assessment.
It’s more regarding the type of client your acquire than whether they choose a .com or fresh TLD. If you acquire a client who plans to create a website or business on the domain, it probably doesn’t matter if they register a .com, .biz or .guru. The renewal rates will be regarding the same. Your rates will be much lower if you sell to someone who’s just registering for future use or as an investment.
Donuts is also revealing renewal rates to market fresh TLDS to domain name investors. I suspect part of Donuts’ early prediction was to convince domain name investors to renew. Tindal writes:
It’s similar if you’re a domain investor. As great as those old .COMs are, when you buy a .COM from the registry in 2015 you’re buying into 2015 quality, and that quality has declined to the point where names will soon renew below 50%. If you’re in the business of buying or selling domains, rather than being a user of them, you ought to have a good look at current year renewal rates for the TLD you’re interested in. It’ll surprise you.
I don’t think this is very relevant. Yes, some domain investors register truly awful names. But the majority of .com domains registered in any given year were previously registered. They aren’t really 2015 registrations.
