Case Study Target the Right Market

A software company debates its strategic focus. By jill avery and Thomas steenburgh

Target the Right Market

HPR’s fictionalized case studies present dilemmas faced by leaders in real companies and offer solutions from experts. This one is based on the HBS Case Study “HubSpot: Inbound Marketing and Web 2.0,” by Thomas Steenburgh, Jill Avery, and Naseem Dahod.

the knock on Jane Tamsen’s office door startled her. Vikram, one of Jane’s sales directors, poked his head in. “You ready for us?” he asked.

Jane waved him in. Andrew, another of her team members, followed. “Let’s hear it,” Jane said.

“The data are showing what we’ve suspected all along,” Vikram started. “We’re playing in two major markets. The first is small businesses—they have owners who run their own companies, fewer than 20 employees if that. The other is medium-size businesses with 20 to about 100 employees; the purchaser at these places is a senior manager, not the owner.”

“I think of them as ‘small Sams’ and ‘medium Marys,’” Andrew added.

“Creative,” Jane said.

Andrew had been one of her first hires at SparkPlace, a two-year-old provider of online-marketing software, and he’d continued to impress her. Founder and CEO Dirk Middleton liked him, too, especially after Andrew coined what would become the company slogan: Marketing is broken. Dirk, who had spent his career in sales, started the business for that very reason. He firmly believed that cold calling and spamming were destroying marketing. Rather than pestering prospective customers with pushy e-mails, companies should, he thought, use blogs and other social media to attract people who were already researching and shopping in the industry. Then those potential customers could give companies permission to market to them. That approach would be not only less annoying to consumers but also more profitable for the companies doing the selling. SparkPlace’s software, available for a monthly fee, was designed to let customers manage and measure...