A Theory on the Amazing ExactTarget Success Story

Image representing ExactTarget as depicted in ...

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Earlier today I was talking with an entrepreneur about how the marketing automation market today parallels the email marketing market of seven years ago. We were talking about some of the largest email marketing vendors and what decisions they made along the way to achieve their prominence. One of the vendors, ExactTarget, has an amazing success story, especially considering the relatively small amount of money raised in their first six years.

Here are some pieces of the theory as to how they were able to achieve such success:

  • They had great market timing to be early but not too early
  • Originally, the product started around $100/month, making it affordable for most businesses
  • They employed relatively junior field sales reps in all the major markets who were able to sign up local companies as well as give it away to non-profits (like local technology associations) who would then have the ExactTarget logo at the bottom of every email blast
  • The original low entry price forced ExactTarget to get good at customer acquisition, on-boarding, and product ease-of-use otherwise the business wouldn’t scale
  • As employees of ExactTarget customers changed jobs they would help get ExactTarget implemented at their next employer creating a nice momentum effect
  • Email marketing, charging based on number of emails sent or database size, provides significant head room to grow the size of an account (e.g. as a company like Groupon, which uses ExactTarget, started out paying a few thousand dollars a year in 2008 now pays millions of dollars annually)
  • The product, marketing, and sales team became much more sophisticated allowing the company to move up market, and I’d guess that their average revenue per customer today is many times greater than what it was five years ago (moving up market is generally easier than moving down market)

Now, this is all theory, but ExactTarget has been an amazing success story regardless. Great timing, execution, and little luck goes a long ways.

What else? What do you think of this theory on the ExactTarget success story?

3 thoughts on “A Theory on the Amazing ExactTarget Success Story

  1. We had the pleasure of being their reseller in the UK and EU and established them there until they acquired us as the first part of their global expansion. I agree with all of David’s comments and would only add two things.

    To David’s last point their move upmarket was initially client driven as larger corporations woke up to the fact that the ExactTarget solution had significantly high levels of functionality that some of the supposed ESP’s selling into corporates lacked. This was particularly true of their Enterprise solution which allowed for multiple email databases to operate within a central control system that managed the quality of the email content.

    Secondly they were (and maybe still are!!) great people to work with. They couldn’t have been better at supporting our efforts in Europe and their client base. Hey – people buy from people, that has a lot to do with their success.

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