Key takeaways:

• Overwhelming majority of business investors (VCs, private equity and angel investors) — 93% — agree that a poor domain costs businesses a minimum of 5% annual revenue, year on year
• 68% of business investors say a poor domain will cost over 15% of annual revenue
• 30% of business investors consider the loss to be 25% or more of annual revenue
• Among founders, two-thirds (67%) think a poor domain costs at least 15% of annual revenue. Notably, for serial entrepreneurs, 84% think a poor domain costs at least 15% of annual revenue.

Objective: Every early branding decision builds a foundation, the strength of which impacts your business’s fortunes and trajectory for years to come. Brand name and domain — often the first thing customers encounter — play a key role in early impressions of trust and credibility, as well as impacting tangible metrics such as click-through rates and traffic.

To assess the impact of a domain on revenue, we posed this question to determine how much revenue could be lost on a weak domain, year on year, and aid in estimating the potential return on investment of a strong domain name.

Question:

How much, in your opinion, could a poor domain name cost a business in annual revenue?

• Less than 5% of overall annual revenue
• 5 – 15% of overall annual revenue
• 15 – 25% of overall annual revenue
• 25 – 35% of overall annual revenue
• Over 35% of overall annual revenue

Audience:

Audience one: Venture capitalists, private equity investors, and angel investors.

Audience two: Founders and C-Suite leaders (e.g., CEO, CFO, COO)

Audience three: Serial entrepreneurs

Overall Results — Business Investors (Venture Capitalists, Private Equity, Angel Investors)

• Overwhelming majority of business investors — 93% — agree that a poor domain costs businesses a minimum of 5% annual revenue, year on year
• 68% of business investors say a poor domain will cost over 15% of annual revenue
• 30% of business investors consider the loss to be 25% or more of annual revenue

How much, in your opinion, could a poor domain name cost a business in annual revenue?

Overall Results — Founders and Serial Entrepreneurs

• Among business leaders, one in four thinks that a poor domain will cost over 35% in overall annual revenue
• More experienced serial entrepreneurs estimate a higher loss of revenue from a poor domain
• Two-thirds of founders (67%) and 84% of serial entrepreneurs think a poor domain costs at least 15%.

Founders

How much, in your opinion, could a poor domain name cost a business in annual revenue?

Serial Entrepreneurs

How much, in your opinion, could a poor domain name cost a business in annual revenue?

Conclusion

The message from both business investors and business leaders is clear: a weak domain is far more than a branding inconvenience. Whether through reduced trust, weaker customer recall, lower click-through rates, or lost direct traffic, respondents overwhelmingly believe that domain choice has a measurable impact on revenue year after year.

Notably, serial entrepreneurs are more likely to estimate a higher loss of revenue from a poor domain with 67% of founders overall and 84% of serial entrepreneurs suggesting a poor domain will cost at least 15% in revenue. More experienced founders and business leaders have a greater understanding of the value of a strong domain, and the impact of a weak one.

93% of business investors, and over 90% of founders, consider that the revenue loss of a poor domain is over 5%. Even small businesses with an estimated annual revenue of just $1M stand to lose between $50K (at 5%) and $350K (at 35%) every year on a poor domain. This makes domain name a crucial early investment for the trajectory of your brand.

If you’re interested in digging deeper into our findings, or asking your own questions on domain choice and branding topics, contact thom@atomradar.com to learn more.

Further Reading

• Must-Read Insights on Domain Names Backed by Deep Audience Research
• Brandable Domains Correlate with Startup Success for Business Investors: 94% Associate Weak Domains with a Risk of Failure
• Business Investors are Unanimous: 98% Say Name and Domain Signal a Startup’s Long-Term Vision

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About The Author

Thom Davies

Thom Davies is a researcher at AtomRadar and content strategist for Atom.com. His background in quantitative and qualitative analysis is the foundation for data-led brand strategy.

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