To say the least, it has been a long day, but a good one. The party for my daughter's graduation ended up at our house, just like the prom and all the other events these kids have enjoyed over the years so my time remains limited. Nonetheless, I would like to briefly comment on some of the information that was presented today.
First, Pete Kight is confident, almost to the point of exuberance which, for those of you whom have met Pete in the past might say, are you talking about the same guy. I am. His enthusiasm was shared by those thirty to forty analysts at the luncheon, those that I spoke with were most comfortable with the decision, some wondering what took so long to attack the marketplace. Pete answered that one himself, a bottom-line individual, the thought of additional negative quarters was not in the gameplan.
In addition, I discovered why my prior model was so accurate in predicting earnings whereas other models always came in too high. The amount of revenue earned from "bill presentment" is negligible, as a matter of fact, the "bill presentment" model we used suggests a fixed cost element which hurt the bottom line. This information should not be taken to be a negative, rather it is most positive in nature.
With respect to bill presentment, Pete shot at the whales and the elephants -- and hit them all. Costly, yes, but the smaller whales, sharks and tunas, had nowhere to go but copy the larger whale and the "tilt" marketing idea worked, the majority of the most critical billers were caught. With the inventory of bill presentment growing, the potential to tap that side of the market for revenue now exists in several forms. Simple presentment on an if paid basis is realistic, the potential to charge for "click-through" pop-up advertisement can be examined as can the fact that the bill presentment company will incrementally decrease its customer service department given the success of CKFR's new 3.0 software -- it is awesome.
The length of time to be given away, with respect to the new portal deals, is minimal, two to four months. That is not a problem, especially if the customer gets hooked, and let's face it, we are all hooked. Remember, the banks use this medium to attract deposits. There is nothing wrong with CKFR using this approach as a "loss leader". I just wonder what took so long to start.
There are so many avenues available to CKFR for current and future "e-bill", "e-pay" and "e-money" revenue producing strategies that the mere thought of who their market is just boggles the mind. The first thing one needs however is the eyeballs. The portals are the first step towards fulfillment of these goals -- where those who sign-up and stay lead CKFR is yet to be determined but after watching the presentation and speaking with those whose understanding of the company is similar to my own I have no doubt that entry of others, whether planned or in progress, will be very difficult, takeaway will be even harder.
In the past I have been hard on the "investment bankers" but there is a silver lining to everything in this picture -- lunch at Club 21 was superb. Once a whore, always a whore, but in this case, they are on the right track -- upgrades, initiation of coverage and greater coverage are on their way -- e-bill takes shape with CKFR the dominant leader. Patience will continue to be rewarded and besides, Ron C. says we are going into Chapter 11 -- looks like new highs are on the way.
Sorry for rambling, but I hope the information is beneficial. Look forward to meeting you all in New York later this summer. |
