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Investment Overview for Constant Contact (NASDAQ:CTCT)
Below are key drivers of Constant Contact's value that present opportunities for upside or downside to the current Trefis price estimate for Constant Contact:
: Constant Contact's average customer base has increased from approximately 128,000 in 2007 to 527,500 in 2012 as a result of growth in business and enhanced product offerings like email marketing, social media marketing, event management and group buying. Growing demand for content marketing has been the key driver of Constant Contacts success. If the firm is able to grow its customer base by 15% each year reaching 1.2 million customers during the Trefis forecast period instead of the rate that we forecast there could be potentially be a 9% upside to our price estimate. If however growth slows down and Constant Contacts is able to only expand its customer base to 800 thousand customers instead of the 1 million that we currently forecast, then there could be a potential downside of 10% to the Trefis price estimate for Constant Contact's stock.
Constant Contact is a leading provider of on-demand email marketing, social media marketing, event marketing and online survey solutions for small businesses, associations and non-profits. The firm provides internet based services to facilitate email deliver-ability, including bulk and transaction sending, reputation management, compliance auditing, abuse processing and diagnostics. These services provide customers the ability to increase deliverability of email with less time, cost and complexity than handling it themselves.
Engagement marketing creates a dialog that shares information and encourages interaction. Its Engagement Marketing platform enables our customers to launch and monitor customer engagement campaigns across multiple channels including through email, social media, events and online surveys.
The email marketing product enables small organizations to effectively and efficiently create, send and track professional and affordable permission based email marketing campaigns. Through these campaigns, customers can build stronger relationships with their customers, clients and members as well as increase sales and expand membership.
The event marketing product enables customers to promote and manage events and create event homepages, track event registrations and collect online payments.
The online survey product enables customers to easily create and send surveys and receive immediate and actionable feedback.
The social media marketing product enables customers to leverage the power of social networks like Facebook and Twitter and market their products on those platforms.
Constant Contact offers a variety of different products to its customers which include email marketing, event marketing, surveys, social media marketing and others. Based on the available data we have categorized their operations as Content Marketing and reported results as an aggregate of all services offered.
Transitioning into a multi-product company represents a key goal for the company in 2013
While Constant Contact is highly dependent on email marketing, which contributes to around 85% of its total revenues, the company is undergoing a transition to evolve into a multi-product company. The company is undertaking various efforts to accomplish this goal, such as bundling its products on an integrated platform and merging its different sales forces. Recently, the company introduced a new enhanced contact management system, which will help the company in this move.
Integration of social media
Businesses are understanding the value of social media these days and are increasingly trying to make their content shareable across a variety of social platforms such as Facebook and Twitter. Companies in the content marketing space are adding social media as part of their product lines.
Growth in mobile and video marketing
Email marketing providers such as Constant Contact are increasing their marketing services for customers through video and mobile means. In late 2009 Constant Contact had launched the Constant Contact Quick View for the Iphone to enable small businesses to manage their contacts and view its campaigns while on the go.
How Does Trefis Modelling Work?
How do we get the historical numbers for this chart?
Trefis has a team of in-house Analysts who gather historical data from company filings and other verifiable sources. When historicals are available, we explain how we got them at the bottom of the Trefis analysis section below.
Who came up with the Trefis forecast for future years?
The Trefis team of in-house Analysts considers a variety of factors when projecting any forecast. The rationale for our projections is explained in the Trefis analysis section below.
How does my dragging the trendline on the chart impact the stock price?
- We use forecasts for business drivers to calculate forecasted Revenues and Profits for each division of the company.
- We then use forecasted Profits in a Discounted Cash Flow (DCF) model to obtain the Price Estimate for the company.
See more on: DCF Methodology
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