Constant Contact makes sure businesses never lose touch with their most important customers. The company provides small businesses with Web-based marketing software and services for managing e-mail campaigns and online surveys. Its offerings include easy-to-use tools for creating, implementing, tracking, managing, and analyzing marketing materials. Constant Contact also offers products for social marketing and event marketing. The company's customers include retailers, restaurants, and other businesses, as well as non-profit organizations, alumni associations, and churches; two-thirds of its clients have fewer than 10 employees. It claims more than 500,000 customers for its products.
Constant Contact has offices in Massachusetts, Colorado, Florida, California, and New York, as well as in London. It serves clients in some 180 countries, although the US accounts for nearly 90% of sales.
Sales and Marketing
The company markets its products through its own advertising and referral efforts, as well as through partnerships with more than 8,000 local and national small business service providers. It focuses on small businesses and organizations, most of which pay a fixed, monthly subscription fee based on the number of e-mail addresses in their account. Subscriptions to its e-mail marketing tools typically cost between $15-$150 per month, which allows Constant Contact to serve a market that is typically ignored by larger CRM and marketing software competitors such as Oracle, SAP, and salesforce.com. The company has seen rapid organic growth in recent years, with its customer base growing 20-fold from the 25,000 it reported in 2004.
Constant Contact's revenue has risen steadily along with its customer base. In 2011 sales were up nearly a quarter to $214 million, driven by nearly 20% growth in average monthly customers and a 4% rise in revenue per customer. The company also saw a substantial jump in net income (up more than 700% to $24 million) on the strong revenue and an income tax benefit of $13 million.
The company continues to enhance its offerings with new services and tools. Over the years it has added survey (2007), event marketing (2009), and social media (2010) tools to its portfolio. In early 2012 it launched Social Campaigns, which helps clients create and run Facebook campaigns.
It is also looking for growth in new geographic markets. Although international operations are a small part of Constant Contact's business today, it sees opportunity in international markets. The company opened its first office outside the US, in the UK, in 2011.
Mergers and Acquisitions
In 2012 Constant Contact acquired CardStar, which provided mobile applications for loyalty cards and coupons. Also that year the company acquired SinglePlatform, a developer of marketing software used by small businesses to improve their visibility to consumers on the Web. SinglePlatform's application enables businesses to use a single interface to distribute content to such online venues as Foursquare, YP, and UrbanSpoon, as well as on social networks and other websites.
In 2011 Constant Contact had added social CRM capabilities with the acquisition of Bantam Networks for $15 million in cash. Its Bantam Live application gives small businesses a place to launch and monitor customer engagement campaigns across social media platforms. In 2010 the company acquired NutshellMail, giving its customers a tool for engaging social media networks from their e-mail inbox.
Mutual fund manager FMR owns nearly 15% of the company; asset manager Columbia Wanger owns nearly 10%. – less