Stamps.com 2012 Annual Report Download - page 10

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In 2013, we plan to continue increasing, optimizing and refining our enterprise customer lead generation and sales and marketing efforts.
We plan to continue working on improving the efficiency of our sales team. We also plan to increase the number of enterprise customers as
well as increase the number of locations with existing customers.
In 2013 we plan to optimize our business in this area by (1) continuing to introduce improvements in the software and features to further
improve the scalability of the product to the largest high-
volume customers, (2) adding new shopping cart integrations for easier data export
and import from the tools that customers like to use, and (3) continuing to scale our sales and marketing efforts using our national sales
force.
In addition, while our online enhanced promotion channel tends to attract customers with lower lifetime values relative to acquisition costs, we
continue to see an acceptable return on our investment in this channel. We plan to continue to operate this channel so long as it provides an
attractive return. We currently expect to continue to maintain our level of investment in this area in 2013 at levels comparable to 2012.
PhotoStamps
In 2013 we plan to continue marketing PhotoStamps, but with limited spending and expectations. We will continue our program of focused
direct-to-
website PhotoStamps marketing spending with a goal of keeping the overall cost per acquisition at a level that provides an attractive
financial return. While we do not expect to increase our investment in PhotoStamps in the short-
term, we believe that there are potential
opportunities to grow the business in a better economic environment.
Competition
The market for our products is competitive. Some of our current direct competitors in the PC Postage and Customized Postage categories
include:
Endicia.com/Dymo.
Endicia is a group within Newell Rubbermaid’s Office Products division that offers a software-
based PC Postage service
similar to our PC Postage service under the brand name Endicia, a custom postage offering similar to our PhotoStamps service under the brand
name PictureItPostage, and a NetStamps-
like service in conjunction with Dymo (an affiliated company also owned by Newell Rubbermaid)
under the brand names Dymo Stamps and Dymo Printable Postage. All three of these services are directly competitive with our own services in
these areas.
Dymo Stamps is different from our service in its business model. Its service is offered without a monthly service fee, which is one of its primary
marketing messages versus our service. To use the Dymo Stamps feature, however, customers must purchase Dymo Stamps labels through
Endicia at a price that is significantly higher per label than the price for our NetStamps labels.
Pitney Bowes, Inc.
Pitney Bowes is the current market leader in the U.S. traditional postage meter business, with revenues of $4.9 billion in
2012. Pitney Bowes launched its initial software-
based PC Postage product in 2000 and currently offers a PC Postage product under the name
pbSmartPostage, which was launched during 2010. Pitney Bowes has historically offered a PC Postage product under the name ShipStream
Manager but it appears from their website that the ShipStream Manager product is being discontinued and those customers are being converted
to the pbSmartPostage product. During 2004 Pitney Bowes also began offering an Internet-
based service for printing a single label for use in
shipping a package that does not require a monthly subscription fee, in partnership with eBay. Pitney Bowes offers a customized postage
offering (branded ZazzleStamps) through a partnership with Zazzle.com, Inc., a small, private U.S. company that specializes in custom products.
We also compete with traditional postage meters offered by Pitney Bowes and others in the U.S. market. We believe that our customers choose
our PC Postage service over traditional postage meters primarily to save money. We also believe that our PC Postage service can offer superior
capabilities to postage meters in certain areas, such as the ability to integrate tightly with small business productivity applications and the ability
to easily monitor and track USPS packages. We believe customers choose postage meters over our solutions because of the perceived ease of use
of those products versus our current approach of software that runs on a PC.
Table of Contents
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Enhance our High Volume Shipper Solutions and Sales and Marketing Efforts.
We continue to attract high volume shippers such as
warehouses, fulfillment houses, e-commerce shippers, larger retailers, and other types of high volume shippers to our service through our
efforts in these areas. In 2012 we continued to invest in our shipping technology and our sales and marketing efforts. As a result, postage
printed by our high volume shipping customers in 2012 was up 66% compared to 2011.
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