Known mainly as a provider of cloud-based email marketing solutions for small businesses, Constant Contact has been expanding its product offerings, transforming itself into a platform vendor.
With more than 605,000 customers (including roughly 40,000 net new additions in 2013 and 10,000 in the first quarter), Constant Contact has the ability to sell a greater number of solutions (covering event registration, online surveys, coupons and social media campaigns) into an increasingly large installed base.
Now it has the potential to do even more with a product called Constant Contact Toolkit, which it claims which brings together all of the online marketing tools needed to drive new and repeat customers across key channels.
Opening the Toolkit
Introduced in April, Toolkit is an integrated online marketing platform combining new and existing elements of Constant Contact’s product set. The company wants to make it as easy as possible for smaller businesses to find and engage with current and new customers across a variety of marketing channels.
With Toolkit, users can launch, monitor and analyze 15 types of marketing campaigns, ranging from newsletters to local deals. Customized design templates are available, and customer lists can be segmented, with every interaction tracked. The platform’s real time reporting on campaign metrics (including email opens, likes and coupon claims) shows users what worked best with each message or offer, providing performance details across the entire list of contacts.
Toolkit’s Essential Package, favored by 50 percent to 60 percent of new customers, starts at $45 a month, while the Basic Package, which includes access to the eight most-used campaigns, starts at $20 a month. For $195 a month, the Ultimate Package gives users a personal marketing coach to help them set up and deliver campaigns.
In addition to acquiring new accounts — Constant Contact’s goal is to end 2014 with 635,000 paying customers, representing a year-over-year increase of nearly 7 percent — the company also wants to increase the average monthly revenue per user (ARPU), according to CFO Harpreet Grewal. Three years ago, the company’s ARPU was $37.45. By the first quarter this year, it stood at $43.82, a gain of 8 percent from the same time a year ago.
Growing Lists, Cross Selling
Constant Contact intends to keep ARPU on the rise by helping customers grow their list sizes (bigger lists mean larger campaigns), cross-selling additional products into the base and moving users over to the higher-priced Toolkit offerings. Today, the average Constant Contact customer has a list of more than 3,000 contacts, up from 2,200 just a few years ago. As for Toolkit, the average customer spends $10 a month more than the Constant Contact historical average.