By Samantha Lem
As Kanata-based In-Touch Survey Systems Ltd. struggles to maintain revenues, the company is aggressively pursuing new business opportunities in hopes of stimulating growth over the next fiscal year.
In-Touch has been developing and managing data collection software and hardware for more than 20 years for governments and businesses across North America in industries such as retail, automotive, finance, health and food services.
The company operates through four main product lines: Event Matrix, Service Intelligence, GCS Field Research, and In-Touch Public Sector Group. The company’s services collect data for mystery shopping, event marketing, and compliance and operational audits.
In-Touch has had a challenging fiscal year. In its third quarter ended Sept. 30, the company reported its biggest quarterly decline in revenues this year, which fell 30 per cent to $2.33 million from $3.23 million in the same period a year earlier.
Due to a 25 per cent decline in customer contracts during fiscal 2013, as the company said last fall, In-Touch’s revenues have fallen since the second quarter of fiscal 2014. The company said it predicts this year’s revenues to be 15 per cent lower than fiscal 2013’s $10.66 million.
Net earnings also decreased in the third quarter, to $56,572 from $505,307 in the same quarter a year earlier. The company said this was expected due to higher expenses in product development and supporting product launches.
In-Touch’s long-term debt has more than doubled in less than a year, from $317,510 at the end of its 2013 fourth quarter to $695,461 at the end of the 2014 third quarter.
In line with In-Touch’s results, the company’s stock price has declined. It opened at 22 cents on Dec. 4. Shares have traded, over a 52-week range, at between 20 and 44 cents.
The challenge for the company is staying ahead in a competitive, evolving and fast-paced data collection sector.
The big data trend is moving toward information that is available “faster, cheaper and more accurately,” says Cameron Watt, president and CEO of In-Touch.
“These trends are now translating into business, and they’re changing clients’ demands. That’s one of the reasons why we designed OpsMatrix – to meet that demand,” he says.
MicroMetrics Co., a smaller competitor of In-Touch, agrees this industry is very competitive. The Ottawa-based company collects customer surveys through tablets.
“The industry is very crowded right now,” says Martin Kratky-Katz, CEO of MicroMetrics.
Kratky-Katz says the Internet has reduced all barriers to entry, but expertise is still required to succeed. In the case of many successful big players, such as In-Touch, “they typically started as consulting companies with technology.” Later, the company adopted technology and used its knowledge and expertise to collect as well as interpret data.
Where In-Touch pulls ahead in this competitive space is data security, says Watt.
“We’re trusted in terms of how we handle the transfer of encrypted data. Lots of people out there can collect it, but with the types of brands we deal with, you have to be very confident that you’re protecting their data, as well,” he says.
With hopes for significant growth next year, the company is going through many major developments.
Mid-November, In-Touch launched its new auditing software called OpsMatrix, a software-as-a-service, cloud-based system. It allows auditing teams to collect and log information about retail businesses on mobile devices. The software enables users to create auditing checklists, track data via time and GPS locations, and obtain signatures. Managers can then review the reports and view any issues requiring follow up.
“OpsMatrix was developed to help people do their own audits and collect information without having another party do it for them,” says Watt. “It is designed to help companies with multiple operations do things faster, cheaper and more accurately.”
The company is also hoping to grow through investment in a new software company, Dodoname Inc., which launched in early November. In June, In-Touch announced that it sold intellectual property assets, worth about $150,000, to Dodoname. In-Touch also invested $100,000 cash this fiscal year for Dodoname’s working capital.
In-Touch owns 41 per cent of the company, while Michael Gaffney, Dodoname CEO and executive chairman of In-Touch, owns 39 per cent.
The company, based in Ottawa and New Glasgow, N.S., is focused on a new concept: privacy marketing. The Dodoname application creates a private relationship between shoppers and merchants by allowing customers to use a pseudo email address when communicating with merchants. Customers do not have to disclose their personal information or identity, such as their name.
“We have developed an app that lets you go anywhere on the Internet without a fear of privacy breaches,” says Gaffney. “It puts consumers in control of their privacy.”
Gaffney says if Dodoname becomes successful, it will be a valuable investment and partner for In-Touch.
“If Dodoname does well, it will simply roll through to In-Touch and it will increase value to its shareholders,” he says. “It’s a different business than what In-Touch’s core business is, that’s why it was spun out.”
In order to accommodate new product launches this fiscal year and next, the company will be undergoing a management restructuring process, In-Touch said in its third quarter report. The company will focus on hiring new sales and marketing employees.
In November, In-Touch announced it laid off vice-president of operations Pavla Selepova, who had been working at the company since 2008.