Question-and-Answer Session
Operator
(Operator Instructions) We’ll go first to David Hilal - Friedman, Billings, Ramsey & Co.
David Hilal - Friedman, Billings, Ramsey & Co.
It was nice to see the churn come in where it did given today’s environment but I guess maybe what offset it a little bit in my mind was the gross sub-number decline which I calculated to be about $26,000. So I wanted to get some color on that.
I guess specifically, David, when you think about all the ways you acquire customers, both your partners and your different channels, which one of those are probably having the most trouble in this environment versus which ones are maybe a little bit more resilient in this environment?
David L. Brown
A specific answer to your question, when we look across all of our channels we see small business customers being very hesitant to make new buying decisions and that’s what’s affected our gross subscriber additions over the last few quarters. We haven’t seen any change in that recently.
Where we are seeing unevenness would be in some of our higher ARPU product lines. We are seeing obviously more concern and more slowness in the decision making process in some of our higher ARPU product lines. That would translate into some of the online marketing and some of the lead generation spaces where our ARPU may run into the several hundreds of dollars.
New customer acquisition in those spaces appears to be slower than it was say a year ago this time.
David Hilal - Friedman, Billings, Ramsey & Co.
Do you think churn can come down even further? I know the churn is always the highest in the early days of a customer and given that you’re signing up less new customers and you have more mature customers, usually the way that math works is that it would lower churn over time. Do you think that’ll be the case even in this environment or does that get offset?
David L. Brown
I certainly think we saw that in the fourth quarter and as we enter into the first quarter we’re continuing to see signs of that. We’re also by the way seeing benefits from having completed the migration of our do it yourself hosting accounts from many, many platforms down to two platforms.
That was completed in December and I’m very happy to say that that was a year long process and during that time we did experience higher than normal churn in that DIY, do it yourself, customer base. We expect to see that churn coming down as we move into the future and we’re continuing to see very positive trends in our do it for me customer bases.
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