4 ms·

The number that explains Constant Contact's success

55 points by chrisyeh 14y ago

deleted 14y ago
[deleted]
tyang 14y ago
This is eye-opening: "Goodman credits the company's success to--get this--in person seminars through Chambers of Commerce across the country." The problem is most startups targeting SMBs have neither of the following - the numbers just aren't there and they have no idea how to get there: "If you're a SaaS startup targeting the SMB market, you'd better either have an awesome freemium offering, or you'd better have a average customer lifetime of around 45 months."
- orangethirty 14y ago
  It's not really eye opening. People here tend to believe that startups should only be marketed online. When reality is just the opposite. With so much online marketing going on these days it's easier to go offline and get customers that way. In the age of online mrketing those who master the offine variant will be king.
standeven 14y ago
This is even more impressive when one considers the typical lifespan of a small business; 44% don't make it to 48 months[1]. I wonder if Constant Contact manages to attract more successful businesses, or if businesses that seek out and engage in such marketing opportunities are just more successful. [1] - www.nbcnews.com/id/16872553/
- jrs235 14y ago
  If they are finding their customers at chamber of conference gatherings (or at least targeting chamber of commerce members), perhaps one could see if businesses that see the value in belonging to a chamber of commerce (and the marketing and networking benefits of such) have a higher success rate? And/or perhaps businesses that join chambers tend to have been successful long enough to get over the early failures and are profitable enough to afford the chamber fees. To me, targeting chamber businesses seems like a great way to find an ideal target customer base assuming the thoughts I poised above.
deleted 14y ago
[deleted]
netcan 14y ago
2004 - "There's no software priced between $1000 and $75,000. I'll tell you why. The minute you charge more than $1000 you need to get serious corporate signoffs." http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html http://www.joelonsoftware.com/articles/CamelsandRubberDuckie... It amazing how the payment/delivery medium sets prices in software. There are a lot of SASS products where a substantial number of customers pay that much. Apple's App store opening the $1 end of the spectrum is another great example.
- manuelflara 14y ago
  Definitely. SaaS can be ridiculously profitable if you provide enough value that customers stay with you for a long time. I wouldn't have paid "$100 for life" when I signed up to Basecamp, but I picked the (old) $12/mo plan. Considering I've been happily using it for 6 years, I've spent close to a thousand dollars already. Pretty crazy.
  - jaggederest 14y ago
    Maybe I'm crazy, but when I see people offering a service for a fixed lifetime subscription, I buy the hell out of it. Like guaranteees on car batteries and mufflers, it's usually a bad deal for the person providing it, with the proviso that you remember to use it.
    - lutusp 14y ago
      Consider this -- if they're offering it and they've been in business more than 15 minutes, it must be to their advantage and not yours. It's like electronic extended warranties and service plans -- retailers offer them because they're money machines.
      - niggler 14y ago
        S/minutes/months/. Early on the prices might be at-current-cost or even a slight loss (to gain traction) and then creep later on.
      - 14y ago
rogerbinns 14y ago
I'm surprised they are still in business. I had to add them to my email server blocklists due to the sheer volume of spam. It was typically being added to mailing lists that had nothing to do with me.
- dizzystar 14y ago
  They are actually pretty good at making sure businesses don't get blocked. I have my own opinions on the company, but they are widely respected by companies in their space. As far as a "general purpose" email marketing company, they are probably the best at what they do. I would definitely work with industry-specific marketing companies over constant contact if that option is available, but I wouldn't fault a business for choosing CC instead.
smoyer 14y ago
My conclusion from the numbers provided by the OP are that CC is still in business because they actually know the cost to acquire a customer and that customer's life-time value. It also helps that the life-time value is higher than the acquisition cost (by quite a bit).
jonknee 14y ago
I have recently started seeing a decent number of Constant Contact TV commercials which I thought was interesting.

55 points by chrisyeh 14y ago

deleted 14y ago

[deleted]

tyang 14y ago

This is eye-opening: "Goodman credits the company's success to--get this--in person seminars through Chambers of Commerce across the country." The problem is most startups targeting SMBs have neither of the following - the numbers just aren't there and they have no idea how to get there: "If you're a SaaS startup targeting the SMB market, you'd better either have an awesome freemium offering, or you'd better have a average customer lifetime of around 45 months."

orangethirty 14y ago
It's not really eye opening. People here tend to believe that startups should only be marketed online. When reality is just the opposite. With so much online marketing going on these days it's easier to go offline and get customers that way. In the age of online mrketing those who master the offine variant will be king.

standeven 14y ago

This is even more impressive when one considers the typical lifespan of a small business; 44% don't make it to 48 months[1]. I wonder if Constant Contact manages to attract more successful businesses, or if businesses that seek out and engage in such marketing opportunities are just more successful. [1] - www.nbcnews.com/id/16872553/

jrs235 14y ago
If they are finding their customers at chamber of conference gatherings (or at least targeting chamber of commerce members), perhaps one could see if businesses that see the value in belonging to a chamber of commerce (and the marketing and networking benefits of such) have a higher success rate? And/or perhaps businesses that join chambers tend to have been successful long enough to get over the early failures and are profitable enough to afford the chamber fees. To me, targeting chamber businesses seems like a great way to find an ideal target customer base assuming the thoughts I poised above.

deleted 14y ago

[deleted]

netcan 14y ago

2004 - "There's no software priced between $1000 and $75,000. I'll tell you why. The minute you charge more than $1000 you need to get serious corporate signoffs." http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html http://www.joelonsoftware.com/articles/CamelsandRubberDuckie... It amazing how the payment/delivery medium sets prices in software. There are a lot of SASS products where a substantial number of customers pay that much. Apple's App store opening the $1 end of the spectrum is another great example.

manuelflara 14y ago
Definitely. SaaS can be ridiculously profitable if you provide enough value that customers stay with you for a long time. I wouldn't have paid "$100 for life" when I signed up to Basecamp, but I picked the (old) $12/mo plan. Considering I've been happily using it for 6 years, I've spent close to a thousand dollars already. Pretty crazy.
- jaggederest 14y ago
  Maybe I'm crazy, but when I see people offering a service for a fixed lifetime subscription, I buy the hell out of it. Like guaranteees on car batteries and mufflers, it's usually a bad deal for the person providing it, with the proviso that you remember to use it.
  - lutusp 14y ago
    Consider this -- if they're offering it and they've been in business more than 15 minutes, it must be to their advantage and not yours. It's like electronic extended warranties and service plans -- retailers offer them because they're money machines.
    - niggler 14y ago
      S/minutes/months/. Early on the prices might be at-current-cost or even a slight loss (to gain traction) and then creep later on.
    - 14y ago

rogerbinns 14y ago

I'm surprised they are still in business. I had to add them to my email server blocklists due to the sheer volume of spam. It was typically being added to mailing lists that had nothing to do with me.

dizzystar 14y ago
They are actually pretty good at making sure businesses don't get blocked. I have my own opinions on the company, but they are widely respected by companies in their space. As far as a "general purpose" email marketing company, they are probably the best at what they do. I would definitely work with industry-specific marketing companies over constant contact if that option is available, but I wouldn't fault a business for choosing CC instead.

smoyer 14y ago

My conclusion from the numbers provided by the OP are that CC is still in business because they actually know the cost to acquire a customer and that customer's life-time value. It also helps that the life-time value is higher than the acquisition cost (by quite a bit).

jonknee 14y ago

I have recently started seeing a decent number of Constant Contact TV commercials which I thought was interesting.