Constant Contact (NASDAQ:CTCT), which recently acquired MobManager, a daily deal management solution for small businesses, has officially entered the daily deals space with the launch of SaveLocal, its new online offering which enables small businesses to run and manage their own daily deals.  Constant Contact will compete primarily with Groupon (NASDAQ:GRPN), LivingSocial, which is backed by Amazon (NASDAQ:AMZN) and Yelp (NYSE:YELP), which also runs deals for SMBs, and other small players in the daily deals space. However, unlike others, Constant Contact lets businesses create personalized deals for their own customer base, giving them complete control of the process.
Constant Contact Now Offers a Complete Online Marketing Solution for Businesses
With its recent acquisitions in daily deals and mobile marketing segments, and the launch of its social media marketing offering, Constant Contact now offers a full spectrum of online marketing services targeted specifically at small businesses. It started out as an email marketing solution offering event marketing and online survey tools, eventually moving into every major niche related to online marketing.
Daily deals is becoming an increasingly popular customer acquisition tool and if Constant Contact is able to capture even a small amount of market share of this booming market with SaveLocal, it would mean a significant boost to its revenues and stock price. However, given the intense competition in this space, acquiring new customers may be a major challenge for Constant Contact. We expect it to gain traction initially by cross selling its daily deal offering to its existing customer base.
We expect its customer base to increase steadily going forward, and given the complete online marketing package that it now offers, we also expect a rise in the average revenue per customer. You can check the impact of both drivers on the Trefis price estimate for Constant Contact.
SaveLocal will be part of the content marketing business, which accounts for more than 80% of the $27 Trefis price estimate for Constant Contact. Our price estimate stands nearly 5% below the current market price.Notes: