Constant Contact (NASDAQ:CTCT) is a provider of on-demand email marketing, event marketing and online survey solutions for organizations. Customers use the firm’s products to create, send and track emails, events and surveys to their end users. This enables companies to build stronger relationships with their end customers which eventually helps them to increase their customer base and drive sales growth. The firm competes with a number of players in the space including Vertical Response, iContact, Eventbrite, Zoomerand and Surveymonkey.
Constant Contact Coverage Launch – $30.66 Stock Price Estimate
Content Marketing is the main business division, which we estimate accounts for around 86% of the stock value. Its cash holdings make up the remaining 14%.
Constant Contact’s Focus on Growth
The email marketing space is quite saturated with several companies offering unique solutions to its clients. Constant Contact’s average customer base has grown from 128,000 in 2007 to 393,000 in 2010, and we expect its customer base to grow at nearly 15% pace over the next few years given the company’s strong product line and ability to innovate towards stronger solutions. See the chart below.
Due to its varied offerings (email, survey and event marketing), Constant Contact is able to cross sell products to users more efficiently then some of its competitors. The firm also places significant emphasis on best practices and coaching, which helps drive increased usage of its products and, thus, revenues.
Key Business Strengths
Constant Contact has increased its global presence in over 160 countries and is focusing on growing its customer support base to attract new users. The company has also expanded its product offerings to meet the evolving needs of its customers. For example, the growth of social media prompted the launch of NutshellMail, a social media monitoring tool that enables customers to receive feeds from Facebook and Twitter.
Continued product innovation and an ability to keep up with market trends has spurred a high degree of customer retention. From 2005 to 2010, at least 97% of email marketing customers in a given month have continued their service into the following month.