Question-and-Answer Session
Operator
Thank you (Operator instructions). Our first question will come from Vance Edelson with Morgan Stanley.
Vance Edelson – Morgan Stanley
Hi, thanks a lot. Good morning. You mentioned the three indicators that you monitor to make sure you're doing the right thing in creating value. If you think back to past cycles and past recoveries, what is normally the first indication that it is really paying off? Do you start to see an increase in new customers first or does the cross-sell ratio start to rise, does pricing power improve? How has that played out in the past or put another way what are you looking for in the coming months that would make you most optimistic that recovery is at hand?
Tom Monahan
We watch – I think it is interesting to watch all four categories of metrics, and the one that matters the most ultimately is contract value, which in our business lends itself to enhance profitability. What we've seen in the past is that the key leading indicators, which are continuing at pretty robust levels, we are continuing to maintain very active sales pipelines. We are continuing to engage our members very directly and we are continuing to see good usage patterns and good feedback. Those start to convert more quickly into economic outcomes. So in a difficult environment, things that take four conversations to book a piece of business either a renewal or a new sale start taking three and then they start taking two, and what we end up getting is leverage on the marketing and member services line as the productivity of the people in the field we've been building these great relationships manifest itself in faster and quicker to move through the system contract value. So you tend to see a little bit of, for lack of a better term, velocity as the economy recovers, and things that were requiring multiple steps and multiple efforts in multiple layers of approval and review. That starts to strip away and commercial activity becomes easier to move through the system.
Vance Edelson – Morgan Stanley
Okay, great, and in terms of the long-term dividend philosophy, is it your expectation that you will at some point bring it back up to the prior level. Is that kind of the ultimate goal and a related question on the buybacks, what is the reasonable timeframe to be repurchasing shares again?
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