Stamps.com 2003 Annual Report Download - page 11

Table of Contents
Through our marketing programs, we seek to acquire our target customers in a cost effective manner. We execute a diverse range of
programs that meet our return on investment targets. We project customer lifetime value in our various channels, and we compare lifetime
value to the cost to acquire each customer in order to determine the economic return on our marketing programs.
Our Technology
Our technology is comprised of the following key components:
System Architecture . Our servers are located in a high-security data center and operate with internally-developed security software. These
servers create the data used to generate information-based indicia. These servers also process postage purchases using secure technology that
meets US Postal Service security requirements. Our service currently uses a Windows-based client application, which supports a variety of
label and envelope options and a wide range of printers. In addition, our application employs an internally-developed user authentication
mechanism for additional security.
Transaction Processing . Our transaction processing servers are a combination of secure, commercially available and internally-developed
technologies that are designed to provide secure and reliable transactions. Our system implements hardware to meet government standards for
security and data integrity. The performance and scalability of our system is designed to allow many users to process postage transactions
through our software.
Database Processing . Our database servers are designed and built with industry-leading database technologies and can be scaled as
needed.
Research and Development . Our research and development expenditures were $12.6 million in 2001 and $4.8 million in 2002 and 2003.
5
bundled along with a partner’s hardware device. We have partnerships with companies who offer small business productivity
software, financial software, printers and Internet services.
•
Retail Partnerships
We may make a copy of our free software or a marketing brochure available at a partners’
retail location. Current
retail locations include office supplies and computer equipment stores.
•
Online Advertising.
In this channel, we partner with key players in the online marketing industry to acquire customers using a variety
of online mediums including banner ads, pop
-
up ads, search keywords, and permission
-
based email campaigns.
•
Affiliate Program.
In this channel, we utilize the traffic and customers of smaller web sites and other businesses or individuals that
are too small to qualify for a partnership directly with our Company. Our affiliate channel is currently managed by a third party. We
offer financial incentives for our affiliates to drive traffic to our web site.
•
Direct Mail.
In this channel, we send direct mail pieces to prospective customers. We purchase targeted prospect lists from third
parties or obtain prospect lists form our partners. We then execute a direct mail campaign to the target list.
•
Remarketing.
We remarket our service 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.
•
USPS . We work with the USPS on a variety of different marketing initiatives. Examples of these marketing initiatives include the
distribution of marketing collateral in retail post offices, a presence on USPS.com and working with USPS representatives to target
prospects.