Hubspot Case PDF

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THIS CASES ARE SO HARD AND TAKE WEEKS!!! I would have killed to have had this when I was in school!...

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Cody Layton Marketing 464

Hubspot Case Problem Statement Founded in 2006 by Brian Halligan and Dharmesh Shah, Hubspot quickly became known for its inbound marketing strategies and practices that pulled prospective customers toward businesses through the use of Web 2.0 applications. These include functions like blogging, search engine optimization, and social media. Hubspot also offers software tools that are based on the same principal of inbound marketing. Displayed in the case is a customer funnel that describes the important process for Hubspot to attract potential customers, qualify the prospects, determine which prospects have the highest potential to become paying customers, and then finally close the sale. During the initial stages of business for Hubspot, the sold to any customers interested in buying products, making their customer set extremely diverse. This problem is also attributable to the mass marketing orientation of inbound marketing. With the increase of prospective customers, Hubspot started to qualify leads before ever turning them over to the sales force of the company. The segmentation observable for Hubspot is B2B and B2C. Broadly the company has segmented their customers as Owner Ollie (small business owners) and Marketer Mary (marketing professionals). The Owner Ollie segment makes up about 73% of the customer base, leaving Marketing Mary at 27%. Respectively the cost to acquire each group is $1000 and $5000. The current position of Hubspot has led to three categories of problems that will need addressed before and expansion of business operations is possible. 1. Targeting Strategy: Hubspot is unable to meet the needs of their diverse customer’s base. The major problem here is that Hubspot has not effectively identified a clear targeting strategy. Targeting of Mary’s Ollies, or even everyone is possible, but needs to be evaluated based on profitability. 2. Inbound vs Outbound: Hubspot may not be able to scale the business through the use of inbound marketing alone. An increase of reach is possible through the supplementing inbound with outbound marketing methods. The issues here is that Hubspot advises clients to use inbound marketing, this may undermine Hubspots recommendations to the client. 3. Pricing Strategy: The case has presented an ineffective pricing strategy for Hubspot. To eliminate this as an issue, Hubspot will need to Identify a pricing strategy that reduces churn rate and increases retention, caters to the needs of their different markets (Mary’s or Ollies), and allow Hubspot to obtain the most possible profit from customers. Alternative Evaluation: 1. Continue to conduct business as usual: Hubspot could continue to only use inbound marketing, and continue to serve all customer types. This strategy would probably allow the business to remain successful at large, but not allow for large scale growth. 2. Only target Owner Ollies: Positives of this option are that this segment currently accounts for 73% of total business, this is a fairly easy segment to sell products to, Owners are not likely to shop competitors pricing and would be able to absorb a price increase, Hubspot already has a larger overall impact on Owner Ollie’s business, and the low customer acquisition cost ($1,000). Negatives are that this segment has a high churn rate of 4.3% and that they are less likely to spend time using the products.

Cody Layton Marketing 464

3. Only target Marketer Mary’s: The most significant benefit of this option is the low churn rate (3.2% monthly), which suggests that this is a more loyal customers segment. This segment is also more likely to be recession proof, and will also be more interested in the analytics and reports provided by Hubspot. This option does prevent a few negatives as well: this segment only represents a small portion of the business’s customers base, needs advanced product solutions, has a high acquisition cost ($5,000), are more difficult to reach, and has a longer selling cycle. 4. Only target B2B: Benefits of this option are that: this segment has a relatively low churn rate of 3.2%, customers seem to receive a lot of value from inbound marketing and lead qualifications, and that B2B typically will have a longer sales process and will be more selective about potential customers to target. The only immediately identifiable negative of this option is that Hubspot will need more customer support. 5. Only target B2C Customers: The unique advantage of this option is that it requires a very low level of customer support. Negatives of this potential solution is that it carries a very high churn rate of 6%. 6. Incorporate Traditional Marketing Mix: This option has quite a few appealing benefits: first off, inbound marketing is the single tool in the current marketing mix, traditional marketing activities will be able to reach B2B & Owner Ollies because they are not familiar with Web 2.0. Hubspot could also initiate a “lukewarm” calling platform in order to revise the customer funnel. The most apparent downside to this option is a potential for serious brand disillusion. Recommendations: 1. Only target Owner Ollie’s with primary focus on B2B: This will allow Hubspot to focus on a single segment which will allow for Hubspot to maximize efficiency because they will only be required to offer support to a single type of customer. This will allow Hubspot to have more time to spend on analyzing how to effectively meet this needs of the Owner Ollies which will give them an opportunity to take advantage of the opportunity to be the market leader in lead generation through inbound marketing for this segment. Hubspot should focus heavily on the B2B segment of Owner Ollies because this will derive the most amount of value from Hubspots products. Finally, this recommendation will prove to be beneficial because Owner Ollies are easier to acquire, have shorter sale cycles, and have a significantly lower upfront cost of $1000. There is a huge potential to be a market leader for this segment that is currently unrealized, this recommendation will help Hubspot take advantage of this opportunity 2. Introduce Third Party Applications : Having a third party integration service should increase convenience and be something of value for Owner Ollies. This will create a marketplace for online marketing firms where items like production and SEO can be easily managed. Third party integration will increase CLTV of Hubspot and reduce long-term costs while creating potential for affiliate revenue streams. Hubspot will also benefit greatly from a greater amount of resources to help them focus on the company’s core offering while also positioning them as the central platform for inbound marketing in the industry. 3. Implement a “Lukewarm” calling system to revise the Customer Funnel : At this point, outbound technique should be limited, and Hubspot should continue with their current inbound marketing strategy. Hubspot already has strong relationships with these people, and therefore has greater permission to contact them. This will allow Hubspot the opportunity to know customers better and understand why some companies opted out. This strategy will not hurt brand image as it differs from true outbound marketing.

Cody Layton Marketing 464...