I did a deep dive into our 290 LTO deals at @afternic and discovered some valuable insights concerning cancellations, early payoffs, and trends.
๐ Cancellation Rates
Our raw cancellation rate was 26.9%, but that understates risk because it counts active deals as non-cancellations.
A better number is the resolved cancellation rate: cancellations divided by completed LTOs.
Historically, among our LTOs that have reached an outcome, about 59% completed successfully and 41% were cancelled.
โฑ๏ธ Cancellation Timing
Cancellations are heavily front-loaded. Obviously the more payments they make the less likely they are to walk away at the next payment. But at what point are they really committed?
Of our 78 cancellations, 28 (36%) made only one payment, 40 out of 78 (51%) made at most two payments, and 63 out of 78 (81%) made at most six payments.
Once a deal avoids cancelling after only one payment, its resolved success rate rises to about 70%. Once a deal avoids the early churn window and gets to around six payments, the resolved success rate rises to around 86-88%.
๐ Cancellation and Term Length
Most of our LTOs (87%) were in the 12-23 month range, so I'm not sure how statistically significant this data is. But there was a pretty clear pattern that the longer the length of the LTO, the higher the raw cancellation rate was.
The raw cancellation for LTOs less than one year was 25%, for 12-23 months it was 25.3%, for 24-35 months it was 31.2%, and for 36+ months it was 53.8%.
You might think the longer the term, the more manageable the monthly payments are, and the more likely they'll be to stick around. But in this dataset, longer terms were clearly riskier. Personally, Iโd be cautious offering terms longer than 24 months.
๐ณ Cancellation and Monthly Payment
Looking only at 12-month LTOs, the raw cancellation rate was essentially the same for sub-$200 monthly payments vs $200-299 payments vs $300-499 payments. But interestingly, once the monthly payments reached $500+ the raw cancellation rate dropped by more than 50%.
That's somewhat intuitive though, someone committing to a $500+ monthly payment is probably more serious and well-funded.
๐ค Confusing Cancellations
Three buyers cancelled with only one payment left, which seems pretty unbelievable.
In 8 cases, a cancelled LTO later sold again shortly afterward โ 6 through LTO and 2 through BIN. The data doesnโt include buyer identity, but given normal domain sell-through rates and the short timing, these were very likely buyers coming back after missing a payment or regretting the cancellation.
โก Early Payoffs
17% of completed LTOs were paid off early. Nearly half of early payoffs happened close to the finish line, but of the early payers, 32% paid off after only 1โ2 payments.
๐ LTOs By Year
2023: 13 (53 annualized)
2024: 106
2025: 114
2026: 57 (137 annualized)
We're seeing a steady trend upward as LTOs stack up.
๐ Wrap Up
I hope this helps you get a better picture of what you might experience if you enable LTOs.
The interesting takeaways for me were how heavily front-loaded LTO churn is, how longer terms reduce your odds of success, how little the monthly payment amount affects the odds except at the high end, and how more than 10% of cancelled LTOs still ended up in a sale shortly after.
@Yibecoder None of them made my heart skip so there is that answer . Pretty much if you have to ask yourself that question. You should know the answer.
@ishmilly The best skillset to develop is knowing what to drop and what not. Tiers that remain in the lower brackets will have a lower ROI so they are the most logical step to now renew. I used to have 5500 domains. Now its 1200. Less but much better quality
@DomainJames@AGreatDomain Sux. Sorry to hear. Removing Fast Transfer is so worth it and you are still in control of the sales. The entire transaction only adds minutes to maybe an hour to the sales transaction.
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GM ๐
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