Signs of Recovery
It has been interesting, although not always fun, to watch the trends in behavior amongst our customers as we have traveled the rough road to recovery. Things first started to unravel in the fourth quarter of 2008 and into the first quarter of 2009. During that time we experienced an unprecedented level of subscription cancellations as our customers began to cut costs in response to lower revenue. Unfortunately, and despite their best efforts, many of our customers simply could not survive. As a result, we lost a significant portion of our monthly recurring revenue stream (the life blood of a SaaS vendor). Although the pace of business remained very slow throughout 2009 and revenues were flat for the year, unlike many of our friends, family and customers, we were able to hang in there and live to fight another day.
As mentioned in a previous post, we are now starting to see positive signs of renewed growth in the U.S. economy. Today the Conference Board announced a higher than expected rise in the index of leading economic indicators. The increase of only 1.4% may not sound too impressive but it is the highest it has been for 10 months. And, key indicators including consumer retail spending, employment, and corporate spending on technology are all up. As the economy has begun its recovery, we see similar optimistic signs in our own business. Our cancellation rate has returned to normal and in fact we are now seeing customers adding new users to their licenses - a sure sign of new hiring and growth. We see long time customers coming back to get re-trained. We see requests for training of new users within existing accounts. We see new customers expressing greater confidence in the future of their ventures. We see a lot of former customers coming back to us as they begin brand new ventures. We see former customers who have been forced to change jobs or careers recommending our solution to their new employers. And, most encouragingly, we are seeing a noticeable increase in the number of word-of-mouth recommendations, which had slowed to a trickle over the past year. That means people are starting to ask their friends and colleagues about tools and methods to better manage and organize their businesses. This would not be necessary if they did not have, or at least foresee, increased opportunities to be managed.In the next post we will dig deeper and discuss the specific features and functions of the AppShore solution that are enabling our customers to restart their businesses and build momentum going into the future.