With the one-year mark hitting for a number of new gTLDs (new domain extensions) companies are trying to determine how to define their KPI around renewal rate. Donuts, the largest company in the new gTLD space and owner of the most gTLDs came out and said that they expected to see a renewal rate of 85%. I think that is high, very high, but I don’t mean this to be a slam on Donuts, in fact I’d say the opposite, I think they are absolutely crushing it, it’s the expectation around renewal rates that needs to change.
One of the things that has really impressed me with Donuts is their level of transparency. On their blog they share current renewal rates which now sit at 68.4%, in my opinion this is still high and I think any registry seeing these kind of renewal rates is hitting it out of the park.
With .COM the renewal rates hovers close to 50% (this is the last I’ve heard, correct me if I’m wrong!) I think new gTLDs should be expecting closer to a 30% – 40% renewal rate. Even at this rate most new gTLD operators turn a nice profit and with new registrations coming in every day that 30% – 40% only becomes a bigger number every year.
So while I commend Donuts on setting a high bar, I think they set the bar too high, they shouldn’t be disappointed with a 68% renewal rate, I’d be thrilled.
What do you think? Is 85% a realistic renewal rate for new gTLDs? If not what is? Comment and let your voice be heard!