Stamps.com 2007 Annual Report Download - page 7

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Direct Mail.
We send direct mail pieces to prospective small business, small office, and home office customers. We
purchase targeted prospect lists from third parties or obtain prospect lists from partners.
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TABLE OF CONTENTS
Marketing of PhotoStamps
Our PhotoStamps marketing has traditionally been targeted primarily at consumers. Our consumer marketing strategy
includes the following types of programs: (1) online advertising including paid search, banner ads, permission-based emails, and
other online advertising methods; (2) remarketing to our existing customers; (3) partnerships including Apple, Google/Picassa,
HP/Snapfish, Adobe and others; and (4) traditional offline methods of consumer advertising. In May 2006, we received approval
from the USPS to offer PhotoStamps with business logos, and we increased our focus on these higher volume business
opportunities during 2007. During 2007 we decided to reduce our consumer-focused marketing spend in order to lower our
customer acquisition costs and thus improve our expected returns on the PhotoStamps business.
Business Strategy
The PC Postage Business
Our 2008 strategy for the PC Postage business includes the following major initiatives:
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Remarketing.
We remarket our services to former customers. Our remarketing efforts are generally focused on the new
features which may relate to the reasons former customers stopped using our service. We utilize e-mail and regular mail
to communicate new features of our products to our former customers.
• USPS Referrals . We utilize the nationwide USPS Account Manager network to market and sell our services to
customers. We market to the account managers by attending regional and national meetings and forums, and
participating in local vendor calls. We also receive referrals directly from the USPS website at www.USPS.com .
• Offline Marketing Programs . We utilize various other offline advertising and marketing programs including
telemarketing, traditional advertising, retail and other programs.
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Direct Sales
. We utilize a direct sales force for higher cost enterprise versions of our PC Postage service.
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Increase and Optimize Our Small Business Marketing
. We plan to continue increasing and optimizing our customer
acquisition investment in our small business marketing channels outside the non-
enhanced promotion channels. Based on
recent analysis and trends, we believe that the lifetime value of a non-enhanced promotion customer is more than twice
the cost of acquiring those customers. We plan to continue increasing our investment in our direct mail channel as well
as refining our acquisition through online advertising, affiliates, partners, telemarketing, traditional media, and other
areas. We plan to increase our PC Postage customer acquisition spending in the non-enhanced promotion channels by an
estimated 35% to 40% in 2008 versus 2007. For the online enhanced promotion channel, although the channel tends to
attract lower quality customers, we continue to see an attractive return on our investment, and we plan to continue to run
this channel until we no longer find the returns to be attractive; however, based on recent trends, we currently expect to
see overall acquisition in this area decline in 2008 versus 2007.
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Improved Customer Experience
. We plan to continue optimizing our business model around converting and serving
small business and home office customers. We plan to continue optimizing our web site and our registration process,
particularly because optimizations in this area pay dividends across all of our marketing programs. We also plan to
continue focusing on improving the initial experience a customer has with our product, and building more usable
interfaces for accessing the capabilities of our product on an ongoing basis. We recently completed and launched version
7.0 of our PC Postage product which included a dramatically overhauled user interface, and we have several additional
usability enhancements planned for 2008.
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Market Our New Multi
-User Capability . We plan to aggressively market our multi-user capability, which allows
customers to have multiple users access a single account at a single location. We recently completed the multi-user
capability and launched it during the first quarter of 2008 in conjunction with the release of version 7.0 of our PC
Postage product. We intend to use this feature
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