Hub Spot - Hubspot Case Analysis - Harvard Business Review PDF

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Hubspot Case Analysis - Harvard Business Review...

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HubSpot: Inbound Marketing and Web 2.0 5C’s Analysis  Company: HubSpot is an American developer and marketer of software products for inbound marketing, sales, and customer service.  Strength: Hubspot reduces the marketing costs drastically by using inbounding strategy.  Weakness: Increasing churn rates. Pricing Strategy fails to retain customers.  Opportunities: Small start-ups are increasing rapidly. Hubspot enables them to compete with larger firms.  Threats:The customer base of Hubspot is very diverse. Ever-changing market and technology.  Customers: The customers of HubSpot are usually divided into two segments. Owner Ollies, which occupies 73% of the business, are the owners of small businesses consisting of 1-25 employees, and whose prime focus was to generate more leads for the business. Marketer Marys, which occupies 27% of the business, are marketing professionals working in any organization of 26-100 people, who want robust and sophisticated tools to design the program and analyse the result.  Context: The customers and marketers are more inclined towards inbound marketing as these Web 2.0 tools & applications are generating more business at higher rates. There is a huge market potential in small & medium-size businesses more than 13 times than large ones. Inbound marketing gives more benefits to small businesses in comparison with large businesses as it has lower cost and higher efficiency.  Competitors:  Threat of new entrants - Low Since the industry requires huge investment in tech  Threat of substitutes - Low Substitute is outbound marketing which is obsolete  Bargaining power of customers - Low As company is providing tailored solution  Bargaining power of suppliers - High Suppliers in the industry are employees with different technical expertise and retaining them can be difficult sometimes  Competitive rivalry – High Some of its competitors include Web Position, Marketo, Buzz Metrics, Eloqua etc. Eloqua was really expensive and complicated to use, and was mainly preferred by large enterprises. Most of HubSpot’s competitors chose to play only in one area among creating traffic, creating leads & closing the sale.  Collaborators: HubSpot has collaborated with various companies that allowed the company to develop new product lines and enhance the product development and distribution process. Also, for the social media marketing process, HubSpot works with Twitter, YouTube and LinkedIn for sharing information and reaching out to potential customers. Q1. Which are the best customer segments to cater to the Owner Ollies(OO) or Marketer Marys(MM)? Hubspot should target Owner Ollies Segment over the Marketer Marys. OO’s form 73% of the customer base. They are small businesses without a dedicated marketing team, so it benefits them more, making it easier to sell to. The cost of acquiring a customer in OO is one-fifth that of MM. Even Though the churn out is higher among OO’s, the market potential is huge, also promoting CMS will help reduce the churn rates. Q2. Which are the best customer segments to cater to the B2C or B2B market? HubSpot should focus on the B2B segment over the B2C. As it requires lesser customization and also has a lower churn rate relative to the B2C. B2B customers derive greater value from us. B2B customers offer a much higher average customer lifetime value than B2C. Q3. What Pricing Strategy should Hubspot choose? In order to reduce the churn rate and increase the customer lifetime. Adding to their existing monthly plan they should come up with yearly and quarterly packages with price discount. Q4. Shouldn’t HubSpot sell to anyone who wanted to buy the product? No, HubSpot should strictly stick with their model of inbound marketing. Their desire to grow quickly should not hurt their brand image and the value of their existing customer base....