ClickAction: Getting Personal with Email

Several years ago, Gregory Slayton came on board as CEO of MySoftware. The
firm was a traditional, shrink-wrap software firm. Slayton understood that
this was definitely not the future; of course, the Net was.

Slayton saw that the company had valuable distribution agreements and a sizeable
customer database. These were assets that could be leveraged on the Web.

The company has since been named ClickAction
. But there was more than just a name change. ClickAction
transitioned its product line towards being a provider of so-called Email
Relationship Management (ERM). The company’s main product, ERM 5.0, helps
companies acquire and retain new customers by using sophisticated email targeting.
The technology includes a “smart” rules engine, which allows emails to be
personalized according to purchase behavior, email response rates and interests.
Moreover, the software has data exchange capabilities, so companies can use their
enterprise data effectively. There are over 150 customers. Examples include Patagonia,
Brooks Brothers, Sara Lee, Coach, Vicinity, Boise Cascade Office Products,
and Dean and Deluca.

The company is showing strength in its revenues. They increased 39% to $6
million in the prior quarter as the company shifts towards the Net. Whats
more, the email marketing revenues accounted for $1.1 million, which was a
nifty 49% sequential increase. Losses are moderate, at $2.2 million.

As of the latest quarter, though, the company had $5.6 million in cash and
$5.8 million in working capital. Also, the company recently got an infusion
of $5.25 million in a private placement.

Email marketing is much more effective than traditional online advertising
(such as banners). It must be based on permission, not spam. By
being based on permission companies can build long-standing relationships
with customers, attending to their individual needs. According to
Jupiter Communications, permission-based email is expected to soar over the
next few years. On average a user gets 40 such emails a year. By 2005 this
is forecasted to be 1612.

Currently, ClickAction has the tools to allow companies to take advantage of
these marketing trends. So far, it looks like Slayton made the right bet
for his company.

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