Constant Contact Stock Price Tanking

[rbaker]

Constant Contact Stock PriceTanking.
Sarah Castellanos: Technology Editor- BostonBusiness Journal
May 1, 2015,10:53am EDT Updated: May 1, 2015, 11:34am EDT

Disappointing:That's how Constant Contact CEO Gail Goodman described the company'sperformance in her quarterly earnings call with investors on Thursday.

Shares inWaltham-based online email marketing firm Constant Contact (Nasdaq: CTCT) weredown around 24 percent to about $26.54 apiece in mid-morning trading Friday.Several factors contributed to the decline, including missed forecasts andchanging customer behavior that prompted Constant Contact to lower its revenueand earnings guidance for the remainder of the year.
Here are a fewtakeaways from Goodman's earnings call.

• Customer traffic downshifted, affecting revenue. Goodman said the company's disappointing revenue was due in part to a "marked" decline in the number of website visitors who went through trial runs of Constant Contact's email marketing products. When a website visitor becomes a trial-user, the company sees high rates of conversion to paying customers.
• The company is struggling with credit card failure rates. Recent trends suggest the company is losing up to 4,000 customers every quarter because of credit card failure rates, according to Constant Contact CFO Harpreet Grewal.
• The firm shifted its online messaging. The move, made this quarter, proved to be "a bit too confusing for our prospects," Goodman said in the earnings call.
• The company is "in the midst of a transformation." Said Goodman: "We're evolving Constant Contact from an email marketing company to a provider of an integrated online marketing suite." But the first quarter results have highlighted that there are risks inherent in this transition, which the company needs to address better, she said. "While we remain excited by our prospects, we certainly acknowledge we've experienced a setback."
• Revenue missed the Street's expectations. Revenue for the quarter totaled to $90.4 million, a bit lower than Wall Street analyst estimates of $91.1 million. That's up by about 14.6 percent compared to $78.9 million a year ago.
• The company lowered its guidance. The company said 2015 full-year revenue would be $371 million and $377 million, down from prior estimates of $388 million. Estimates for GAAP net income were reduced from $19.3 million to between $17.7 million and $19.4 million for the full year.

[MikeAurelius]

Recent trends suggest the company is losing up to 4,000 customers every quarter because of credit card failure rates

My opinion only, this is based on their overall strategy. If someone buys into the program and doesn't like it, they will move on to another supplier. With competitors like MailChimp out there who do essentially the same job for a much lower price, it's not hard to see why there's a drop off.

Not all CMS systems are the same, and there are large number out there that you can download and use without cost. Here's a link of open source systems at zero to low cost to maintain:

http://sourceforge.net/directory/os:...t%20management

[rbaker]

Since I retired many years ago this process was not a factor in practice enhancement. I have recently heard of this and other companies marketing their services to eye care providers. I'm just wondering what youse guys think of outsourcing your marketing and are there any HIPPA concerns (although I doubt it.)