Donuts is revealing renewal rates: what are its motives?

domainking131

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Donuts is revealing its renewal rates ahead of time.
Andrew Allemann shares his views on this, saying that it is a marketing technique.
Here is what he has to say:

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 says:

"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%.

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."

You may read the complete news here
 
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