Shutterfly 2012 Annual Report Download - page 9

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•Attract, retain, and grow our leadership team.
In order to successfully execute our strategies, we require a talented leadership team. As a
result, we intend to continue our focus to attract, retain, and grow our team; and to build
continuity and pursue executional excellence in our daily operations everywhere. By
providing our employees with a great place to work, we believe that we continue to
strengthen our high performance culture.
•Maintain financial discipline.
We manage our business activities with a focus on continued revenue and profitability
growth. Our financial strategy involves growing revenues across our brands and initiatives
to take advantage of the multi-billion dollar social expression and personal publishing
markets, but in a way that generates continued net income and adjusted EBITDA growth.
Enterprise
In order to use available manufacturing capacity during low volume periods and to leverage our large
installed base of digital presses, we provide Enterprise services primarily to the direct marketing industry.
Our Enterprise revenues are derived from the printing and shipping of direct marketing and other variable
data print products and formats. We continue to focus our efforts in expanding our presence in this
market. For example, in November 2010, we acquired certain assets and liabilities of WMSG, Inc. to
enable a complete solution for variable digital print marketers and other print-on-demand opportunities.
Enterprise revenues as a percentage of total net revenues were 4% in 2012, 3% in 2011 and 2% in 2010.
Technology and Production Systems
We use a combination of proprietary and third-party technology, including the following:
Customer relationship management, or CRM, system. Our integrated CRM system is
composed of various tools designed to convert first-time customers into repeat buyers. We seek to
increase average order sizes by expanding customer awareness, providing targeted, segmented
offers to customers, and encouraging cross- and up-selling. The system uses a variety of data,
including website usage patterns, order size, order frequency, products purchased, seasonality
factors, image upload, and share usage, as well as customer satisfaction information. This data is
continually updated and refreshed in a data warehouse, from which different customer segments
are identified and monitored on a continuing basis for targeted marketing communications.
By using this deep customer intelligence and ongoing analysis, we are able to offer customers
a more personalized website experience and to target them with specific website promotions,
discounts, specialized e-mail, and direct mail offers. Our promotion engine generates special
offers that are account specific and applied automatically at checkout.
We are also able to dynamically assign visitors to test and control groups who are shown
different versions of our service. This form of A-B testing enables us to continuously optimize
products, pricing, promotions, and user interaction with our websites.
Website system. We have designed our website systems to be highly available, secure and
cost-effective. We can scale to increasing numbers of customers by adding relatively inexpensive
industry-standard computers and servers. We have a strong commitment to our privacy policy, and
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