...It’s year 2009 and HubSpot has reached its 1000 customer milestone. Although this milestone was a great achievement for the 3 year old start- up company, they have a problem on hand. HubSpot needs to decide on which segment to focus on: “Owner Ollies” (OO), “Marketer Marys” (MM) or both. Although a focus on one segment or the other might allow HubSpot to create efficiencies and help them increase their acquisition rate within that segment, our analysis has led us to conclude that they should continue to target both OOs and MMs. From a quantitative perspective we conducted the customer lifetime value calculations. In order to derive the MM and OO lifetime values, we separated both the MMs and OOs into CMS vs. non-CMS users, and also segmented the OOs into “small business” and “very small business” based on different churn rates. Based on our market share assumptions (Exhibit 1) we determined the total potential market in each segment, and used the CMS usage statistics to determine how many of each would be CMS users. We then multiplied the size of each segment by the customer lifetime value of each segment (Exhibit 3 shows the CLV calculation for one segment, Exhibit 2 shows the different inputs used for all 5 segments). Our preliminary analysis favored OOs with over $101 million in potential profits versus $87 million from the MMs (Exhibit 4). Also, based on our CLV analysis the OOs have the additional benefit of becoming profitable in month 6 (Exhibit 3), where the...
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...and try to find any other competitive, I think Hubspot can increase its initial and monthly payment slightly that would improve Hubspot's profitability. 2) For MM – this customer is larger in size compared to OO and has more purchasing power. Exhibit 7 shows it can potentially charge higher price premiums. Since Customer lifetime is higher for MM than OO, Hubspot can make profit from MM for a longer period of time. MM is more stable businesses and 67% of MM are B2B which is showed in Exhibit 5. Since inbound marketing is more effective for B2B compared to B2C, I think Hubspot should focus more on MM to increase its profit. For both case, I think Hubspot should study their price sensitivity before increasing its prices. To do so, one way may be to analyze changes in post purchase customer retention and new customer acquisition data resulting from variations in price. In my opinion, Hubspot should mix inbound marketing and outbound marketing. Even though, the acquisition cost through outbound is 5-7 times larger than that through inbound, OM will generate more customers. The cost for advertising in mass media like TV or magazine will be very expensive. But, if Hubspot takes internet ads on the popular website that will cost cheaper. Hubspot can find the website that many potential customers visit by using its own software. Hubspot can think about going for joint venture or partnership with the popular website. Hubspot has SEO(search engine optimization) which will...
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...Overview Hubspot provides an inbound marketing content management system (CMS) to help businesses get found on the Internet and convert leads into customers for maximum ROI. Have a successful track record for a startup. Hubspot has new reached crucial stage, where in order to accelerate the growth rate and to increase their profit, Hotspot need to decide the following: (1) target segment of their customers, (2) how to channel their product development resource, (3) reduce the churn rate with a new pricing strategy and (4) determine to use inbound marketing or outbound marketing or mix of both. Hubspot Analysis: Hubspot has a unique software tool that enabled its customers to market their products and services like Search Engine Optimization (SEO), Social Media, Blogs, Podcasts and social networking websites like Twitter, Facebook. Hubspot became popular for its inbound marketing strategies that pulled prospective customers toward a business. The software tools that it offered were also created also based on the same principle of inbound marketing. Hubspot provides three type of services: (1) content design, (2) Exposure optimization and (3) Lead tracking and Intelligence. In the Content design, Hubspot offer predesigned templates to companies build their own website. Exposure optimization consist of Search Engine Optimization (SEO) tools and Link grader, which helps customer website identifiable via search engines. Lead tracking which offers marketing intelligence analytics...
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...HubSpot: Inbound Marketing and Web 2.0 By Ashna Bali 1) According to HubSpot, the rules of marketing have changed in the sense of the way that businesses approach or reach out to their customers. HubSpot believes in tapping into technology and Internet for marketing businesses and products by using Web 2.0 tools and methods such as blogging software, social media and search engine optimization. The CEO of HubSpot, Brian Halligan, believes that the traditional “outward” methods of marketing are seen by potential customers as an interruption in their lives (For example, advertisements on TV while watching your favorite show) and society is getting better at blocking out such interruptions. Therefore, the impact of such marketing is obviously reducing. On the other hand, “inbound marketing” is on the rise. Google has become such an important part of our lives today and people like to read blogs and reviews online before purchasing products or services. Hence, businesses should direct their attention to social media, blogging and search engine optimization. David Meerman Scott (2010) recommends that marketers "earn their way in" (via publishing helpful information on a blog etc.) in contrast to outbound marketing where they "buy, beg, or bug their way in" (via paid advertisements, issuing press releases, or paying commissioned sales people, respectively). Yes, I agree that the rules of marketing have changed and that these days the internet and social media plays a very important...
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...HubSpot: Inbound Marketing and Web 2.0 Contents Introduction 3 HubSpot Background 4 Inbound vs. Outbound Marketing 4 Product & Pricing 6 Marketplace & Competition 10 Marketing Strategies 14 Customers & Segmentation 16 SWOT Analysis 22 CRM Implications 23 Problem Statement 25 Appendix A – Exhibits 27 References 30 Introduction HubSpot founders, Brian Halligan and Dharmesh Shah, were selling more than software—they were selling a philosophy. They believed that Web 2.0 was a game changing technology that could be leveraged to fundamentally change the way marketers attracted customers. At the same time, typical push marketing techniques were becoming ineffective. Greg Stuart, x-CEO of Interactive advertising bureau, estimates that advertisers spend roughly $112 billion (just over half of total spending in 2006) on sending messages that reach the wrong audience or none at all (Anonymous, 2006). HubSpot designed their products to fill and manage the customer funnel using techniques termed Inbound Marketing. Using the same techniques and products they were selling, HubSpot was able to attract 1,000 customers in a little over a year which showed that their philosophy was sound. In fact, their philosophy was “sold” even before they had a single customer because they were able to raise $17M in venture capital. They attracted a diverse group of customers using the inherent characteristics of inbound marketing techniques. However...
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... Outbound marketing is out of date; inbound marketing is the new solution to the market trend. In the current environment, outbound marketing’s effectiveness is diminishing while inbound marketing strategies with search engines, blogs and social media are generating new business at higher rates. The phenomenon is logical because the outbound marketing tend to awaken a need, while the inbound marketing serves as a way to answer that need. In other terms, inbound marketing is centric into the prospective consumer’s buying process thus increasing the likelihood of purchasing. Also inbound marketing is very cost-effective. (Question 2). HubSpot has taken advantage of this market trend to impose its corporate model and to meet the businesses’ needs in attracting prospects and converting them into paying customers. As a start-up company, Hubspot has sought to serve as many customers as possible, regardless of whether they are in a B2C or B2B markets or whether they are Owner Ollies (OO) or Marketer Marys (MM). This strategy may seem efficient as it can quickly generate profits that can be...
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...a diverse pool. 2. Decide on the current pricing model to entice new customers to the company and maximize the profitability of existing customers. 3. Decide whether to supplement their inbound programs with traditional, interruptive outbound programs (targeted telemarketing and advertising). 4. Widely attract different types of customers or to narrow their focus to a particular target market (B2C/B2B or Owner Ollies/Marketer Marys). Customer Analysis • HubSpot customers came from many different industries, including B2B and B2C • Two different types of customers: Small Business Owners (Owner Ollie) Marketing Professionals (Marketer Mary) • 73% of HubSpot’s customer portfolio • Owned small businesses (1-25 employees) • Busy; managing HR, ops, sales, finance and marketing • Primary objective: generate more leads • 27% of HubSpot’s customer portfolio • Work for companies with 26-100 employees • Supported by a marketing team and/or consultants • Interested in the analytics and reports provided by HubSpot • Owner Ollies want quick, simple solutions to help them generate leads since time and resources were scarce. These customers usually don’t have a vendor management policy in place, and therefore don’t shop around for competition. The buying process is fairly simple: if Owner Ollie sees potential value in the software, they will give you their credit card number and buy. • Marketer Marys run more inbound marketing programs and need more robust and sophisticated...
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...As Hubspot wishes to quickly grow their business in a short period of time, it is highly recommended that the company focus its efforts towards Owner Ollies. This strategy is centered on the simplicity of their required product, Hubspot’s ability to maximize profits combined with the potential for further market penetration. The market of small business owners is not only greater than that of medium to large business but is also the simplest to serve. These clients, limited in marketing knowledge, are looking into quick and easy solutions to increase traffic to their websites. At this junction, Hubspot should rely on their simple product line and focus efforts on satisfying these owners and attracting similar customers. Spending a copious amount of time and money with marketers on complex and costly products would detract from the company’s fast pace growth. In addition to this, the profit of an Owner Ollie customer surpasses that of a Marketer Mary for the first 16 months of business. (Appendix A Figure 1) As the churn rate continues to rise and approximately 60% of the total customers have left, it is critical that Hubspot make its greatest profits prior to this milestone. (Appendix A Figure 2) The breakeven point for the owners also takes place during the second month of operation; considerably sooner than that of the marketers occurring in the 9th month at a cumulative churn rate of 32.6%. The opportunity to significantly impact the business of an owner is more evident...
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...here is where the problem arises. People feel that their privacy is being regularly compromised when they see that they are interrupted and bothered with advertisements which they are not even interested in. Traditional marketing rules proactively tries to engage a person without his/her consent. Not that this is a bad thing, because this system has been working for decades now and shall continue to do so in the near future. Difference being that since the number of communication mediums have increased, the frequency of engagement of people has increased drastically. That could work negatively. Specific to the Hubspot case; the crux of the Hubspot company was to capitalize on the positives of inbound marketing strategies and prove that the traditional outbound marketing approach was in for a change, completely. The difference in plan of approach was that Hubspot as a company did not advertise their offerings directly to all target audience. They created tools and content that explained Hubspot's offering, which was left for the interested customers to seek themselves. To make this pull approach to work, the online content of the information should be useful and interesting, easily accessible and interactive by nature. Thus it has been noticed that some rules of marketing have changed. But in...
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...La Organización Internacional del Trabajo (OIT) determinó que la mala alimentación en el trabajo causa pérdidas de hasta 20% en la productividad. Una conducta alimentaria inadecuada puede converger en mala nutrición o sobrepeso, como también en estrés y problemas de salud que se traducen en bajo rendimiento laboral y aumento de costos por ausentismo. Datos y cifras * La inactividad física ocupa el cuarto lugar entre los principales factores de riesgo de mortalidad a nivel mundial. * Aproximadamente 3,2 millones de personas mueren cada año debido a la inactividad física. * La inactividad física es uno de los principales factores de riesgo de padecer enfermedades no transmisibles (ENT), como las enfermedades cardiovasculares, el cáncer y la diabetes. * La actividad física tiene importantes beneficios para la salud y contribuye a prevenir las ENT. * A nivel mundial, uno de cada tres adultos no tiene un nivel suficiente de actividad física. * El 56% de los Estados Miembros de la OMS ha puesto en marcha políticas para reducir la inactividad física. * Los Estados Miembros de la OMS han acordado reducir la inactividad física en un 10% para 2025. ¿Qué es la actividad física? La OMS define la actividad física como cualquier movimiento corporal producido por los músculos esqueléticos, con el consiguiente consumo de energía. Ello incluye las actividades realizadas al trabajar, jugar y viajar, las tareas domésticas y las actividades recreativas. La expresión...
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...While the launch of (Spiderman 2) may appeal to a broad audience – this campaign will target Men aged 16 – 24. We will focus efforts in areas in urban and suburban markets where movie theaters exist. （介绍这是什么，why吸引）target Spiderman 2 is a specific type of movie – Action/Superhero – which are typically skewed to males. We have selected age 16-24 because they have seen the Spiderman movies, TV shows and comics. We also feel that there will be exposure to men outside of the target. We are calling our target “Peter” （Storytelling） Peter is 17 years old, a junior in high school and lives in the suburbs of Denver. He takes the bus to school. Afterschool he stays for baseball practice then goes home or to his friend’s house where they hang out or do homework. On weekends, Peter works at the local mall as a server for a hot dog vendor. Often he and his friends meet up at the mall during work breaks. Peter communicates with his friends via mobile and social networks. They often “snap” (snapchats) rather than carrying out a text or IM conversation. (daily life and behavior) The campaign will reach Peter his friends are in the evenings or on weekends via mobile/social and OOH. The use of social and OOH will be integrated. （讲各个media细节用）The OOH strategy would use larger than life units to “break thru” （提及关键词）and be impactful. While Peter was working today he watched as a giant Spiderman billboard was placed on the theater in the mall. It was difficult to miss and made it look like Spiderman...
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...top funnel number of their business | Focus more on the bottom line | Normal CLV : Given the drop out/ churn rate of Owner Ollie and Marketer Mary , the lifetime value of Owner Ollie is less than the lifetime value of Marketer Mary. Assuming that Hubspot has the potential to acquire the complete market , we can see from Exhibit 1 attached that the number of Owner Ollie customer is 5 times that number of marketing Mary customer. Hence the net potential revenue that can be generated from owner Ollie is greater than that of marketing Mary. Hence Hubspot should focus on Owner Ollie in Long term If the Hubspot is able to convert the market into CMS At the present rate given in the case where 13% of Owner Ollie customer can be converted to CMS model and 2 % of the Market Mary convert to CMS model with $500 of additional fee the churn rate drops significantly As can be seen in exhibit 2 , that even though the number of customer in the Owner Ollie segment is large the net revenue generated from Marketer mary is large . So Hubspot should try to get the customers on the CMS model and pursue Marketer Mary customer as they can generate more revenue. Pricing Model Software as Service (Saas) – Renewal Model: Currently Hubspot charges $500 as consulting fee for both its customer charging 250/month to Owner Ollie and 500/month to marketer mary. This is a flexible model where the customer pays according to his needs to...
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...Should HubSpot cast a wide net or narrow their focus? Effectively argue that HubSpot should narrow their focus using frameworks we have discussed, as well as points from the case. HubSpot is still a young firm that is trying to satisfy the needs of a very large market. This can prove rather difficult. If they chose to focus on a narrow segment/industry, the engineers can work to build the product for that specific industry. Once the product is in good shape to satisfy the needs of that industry, they can venture out into other industries as well. It also makes it easy for HubSpot to standardize its processes across all customers. The narrow focus also eliminates some of the pricing challenges that come with targeting clients from multiple industries and segments. Should HubSpot target B2B or B2C customers? -Use a mix of qualitative (strategic) and quantitative (CLV, market potential) facts to argue your point. Do not restate points from the case, but use them to support your decision. -Will this group be receptive to the product? I.e., is HubSpot providing value to these segments? Is there competition in this market? Is HubSpot well positioned to serve these customers? Are there any other outside forces we should consider? HubSpot could target the B2B segment for a couple of reasons. Firstly, customers within this segment generate a lifetime value of $7368.4 for HubSpot, over two times that of a B2C customer. Secondly, most B2B companies have higher budget allocations...
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...question 2, how should HubSpot target the segment(s) you selected? Should they continue to practice what they preach and engage in inbound marketing alone? HubSpot, based on its two segments: Ollie Owner B2B and Marketer Mary B2B, can increase the number of customers using different strategies for different segments. As exhibit 8 shows the average customer age to be 12 months approximately; HubSpot can lock such customers into yearly contracts. Yearly subscriptions would also allow HubSpot to recover their cost of acquiring a customer quickly. However this might result in losing some Ollie Owner customers (why?) therefore a lower fee, along with longer contract length could retrieve back lost Ollie customers. HubSpot is known for its inbound marketing: it is their identity. They attempt to convince their customers to use inbound marketing methods hence using outbound marketing will create doubts in the minds of HubSpot workers as well as their customers, which could put their mission statement at risk. Outbound marketing costs a lot more in relation to inbound marketing. Small firms are usually looking for cheaper methods for marketing. They want to keep costs as low as possible; outbound might not prove favorable for such firms. HubSpot has a first-mover advantage in inbound marketing therefore it is better for them to focus on creating consistency and providing quality products rather than devoting their time to outbound marketing, for which HubSpot said was ‘dead’. Inbound...
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...Problem Statement Hubspot’S Challenge: Hubspot emphasizes that it will do only INBOUND marketing. That is the real problem and hence Hubspot’s real problem is the business strategy and not the marketing strategy. Inbound marketing cannot be a stand-alone strategy for a company but since Hubspot champions it, it has in effect cornered itself. Problem with Inbound is , it is a “carpet-bombing” air-war scheme which works in limited mode but in reality market demands “more targeted” ground-war scheme to break through the clutter. This means delivering high quality content to “right” audience and not just to everyone. You also have to do it across multiple channels, which may smell of some “outbound” marketing strategies like phone, direct mail etc. The challenge here is if someone don’t know about you then they cant search about you. And hence lack of an integrated multi channel business model is at the root of Hubspot’s problem. Hubspot is confusing inbound marketing with “content-driven” inbound marketing, which seems to create trouble for it. Hubspot SWOT Analysis: Strengths • Simple solution which attracts customers initially • Good lead tracking and analytics offering • Customer acquisition cost is comparatively lower than competition • Pioneer of Digital Inbound marketing • Do a good job of creating traffic • Decent demand for Hubspot’s freeware programs in market • Passionate employees • Good online buzz and positive press Weaknesses • Dependency on content...
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