Stamps.com 2010 Annual Report Download - page 10

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TABLE OF CONTENTS
When we refer to our “Non-Enhanced Promotion” marketing channels, we are referring to all the marketing channels
described above, excluding the Enhanced Promotion Online Advertising channel.
Marketing of PhotoStamps
We target our PhotoStamps marketing at consumers and businesses. We market or have marketed our PhotoStamps product
through the following channels:
In recent years, we reduced our consumer-focused marketing spending in order to lower our customer acquisition costs and
improve our expected returns and profitability in the PhotoStamps business.
2011 Business Strategy
Our PC Postage Business
Our 2011 strategy for the PC Postage business includes the following major initiatives:
We also plan to continue increasing our investment in our direct mail channel as well as refining our customer acquisition
process through online advertising, affiliates, partners, telemarketing, traditional media, and other areas. Our goal is to
modestly increase our investment in our PC Postage business in the current small business economic environment and be
well positioned to increase that investment commensurate with continued improvements in the economic environment,
especially as it pertains to small businesses.
Although our online enhanced promotion channel tends to attract customers with lower lifetime values, 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 continue to reduce our marketing spending in
this area in 2011 versus 2010.
•
Enhanced Promotion Online Advertising.
We work with various companies to advertise our service in various places
across the Internet. This channel typically offers an additional promotion directly to the customer by the partner in order
to get the customer to try our service. We reduced our investment in the enhanced promotional channel during recent
years.
• Online advertising, including paid search, banner ads, permission-based emails, and other online advertising methods;
• Partnerships including Apple, Google/Picasa, HP/Snapfish, Adobe and others;
• Retail distribution of a boxed PhotoStamps product;
• Remarketing to our existing customers; and
• Traditional offline methods of consumer advertising.
•
Increase our Small Business Marketing Spending.
Based on recent analysis and trends, we believe that improvements
in the macro-economic environment are being reflected in our small business acquisition metrics and that the lifetime
value of a non-enhanced promotion customer continues to be more than twice the cost of acquiring those customers.
Accordingly, we plan to increase customer acquisition spending in our non-enhanced promotion small business
marketing channels by an estimated 5% to 10% in 2011 versus 2010.
• Optimize our Business Model and Improve our Customer Experience.
We plan to continue optimizing our registration
process and post-registration customer interactions to improve the initial experience a customer has with our service. We
plan to continue expanding our presence in social networking sites and continue expanding our customer web portal and
multi-media and content on our website. We also plan to launch new features in our software product in 2011 including
adding new mailing and shipping capabilities and various other features that we believe will make mailing easier for our
customers.
•
Enhance our Corporate Enterprise Solution Marketing Efforts.
Customers continued to be attracted to our corporate
enterprise solution versus a postage meter based on our dramatically lower cost of ownership and visibility into
individual employee activity from our sophisticated front-end
6