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 after 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 should you care that new .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 new customer acquisition in 2015. If you spend those dollars acquiring more .COM customers 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 about the type of customer your acquire than whether they choose a .com or new TLD. If you acquire a customer 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 about 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 new 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 should 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.
JZ says
its all just spin
Drake says
When I signed uo at godaddy they placed auto renew on all gtlds.
I wanted to delete these names, but they got renewed early automatically.
Next year
Kelvin says
Similar to when you forget to renew a domain and it expires (there’s a 30 day grace period to re-activate it), there’s also a grace period for auto-renewed domains. You have 45 days after auto-renewals to still delete the domain name. It’s an ICANN policy:
https://archive.icann.org/en/registrars/gtld-lifecycle.jpg
Bram says
The entire population of .com renews at 72%, the population of new TLDs from Donuts (the ones they have data on) currently renews at 68.4% (and dropping). This is the only fair comparison.
In other words, as many of us suspected, .COM renewal rates are higher compared to the new TLDs from Donuts.
Domain Hustler says
@ Drake. If you catch it early they will refund you. They have me many times because of that annoying feature.
Domain Hustler says
In this report they are now mixing in the most recent extensions with the others that have already been reported online like .club, so that increases the perceived renewal rate, since the initial domain registrations in the most recent extensions are sunrise and EAP domains.
They are spinning the numbers to their benefit.
Unless I am missing something here it’s totally phony stats.
d0m41nh4ck3r says
What does .club have to do with the price of tea in China?
h4ck3r says
What difference is the type of customers on renewal?
Someone that builds a website is likely to renew. This is true. Someone who invests in a decent name is likely to renew. The only type that matters is the type that renews – I hardly see the reason why as being relevant.
If the registrar upsells (web hosting services) then the type of customer really does matter as you would be looking at acquisition cost. If you can acquire customers with a greater annual return on investment then you would choose to market those avenues. If it is clear that the new gTLDs buy this kind of return you focus efforts there.. but you wouldn’t be relying on Donuts to tell you this information anyway.
What does this all achieve? It counters the blogs that insist there will be red wedding style bloodbath of drops. 50% 60% 70%? It counters the predicted 10% 20% etc.