Target the Right Market

A software company debates its strategic focusby Jill Avery and Thomas Steenburgh

SparkPlace A two year old provider of online marketing software.

Software lets customers manage and measure the effectiveness of their marketing approach.

Software available for a monthly fee Software available for a monthly fee

Limited resources

Focused on growth

Marketing DilemmaSams Marys

Size < 20 employees 20-100 employees

Potential market size 1.3 million

SamsPros Cons

1.3 million potential customers

$1 Marketing = $5 profit

Lower customer retention

Profits are only $10k $1 Marketing = $5 profit

Less complex software needs

Less competition from other marketing firms

Sales cost are $1000

MarysPros Cons

Longer customer retention

$50k profit for each

More invested in product;

Less than million potential customers

$1 Marketing = $2 profit More invested in product; easier to upsell

$1 Marketing = $2 profit

More complex software needs

More competition in the space

Sales costs are $5,000

Target Both MarketsPros Cons

Greater potential market

Greater overall profit potential

Spreading resources thin

More intense marketing needspotential needs

More intense development needs

WHICH MARKET WOULD YOU TARGET!