The document provides information about two students, Anusha.G and Saranya.B, studying at Pondicherry University. It then discusses Hubspot, an internet marketing company, including details about its founding, headquarters, leadership, services provided like content management and sales funnel tools. The document analyzes Hubspot's target customer segments of Owner Ollies and Marketer Marys, issues with high churn rates and pricing models, and recommends addressing segments with high churn and applying hybrid inbound-outbound marketing approaches.

1. Anusha.G
Section A, Second Year
Department Of Management Studies
Pondicherry University
Saranya.B
Section A, Second Year
Department Of Management Studies
Pondicherry University

5. Type : Private
Industry : Internet Marketing
Web Analytics
Online Marketing
Founded : June 2006
Headquarters: Cambridge, Massachusetts
Key people : Brian Halligan and Dharmesh Shah,
CEO & Founder

6. 3 skills for inbound marketing
• Compelling content
• Content distribution
• Engage Community
• Attaining Marketing Efficiencies
• Sales + marketing = Smarketing
• Building Relationships
• B2B increased 37% inbound and 30% outbound
Benefits of Inbound Marketing

7. • Content Management System
• Keyword Grader
• Templates
• Exposure Optimization
• SEO tools
• Link Grader
• Lead Tracking and Intelligence
• Marketing Intelligence analytics
• Sales Funnel
What Hubspot provides?

8. SALES
FUNNEL

9. Filling the customer
funnel
COMPETITOR’S AREA &
MARKETPLACE
• 2009-1000 diverse customer
• Robust website -3,00,000
unique vistors in 2008
• 8000- Linkedin- Promarketers
• Hubspot TV
• “Cold Calling is for Losers” –
35000 times
• Salesforce called on all leads

10. Targeting Segments
• Owners Ollie-68%
1-25 Employees
• Objective:
Generate More
leads (SEO)
• Marketer Mary-31%
• 25-100 employees
• Web consultants
• Analytics and
reports

11. Business
2
Business
Business
2
Customer
Complex
Business
Model due to
longer
decision cycle
Interested
only in
basic
template
Selective
Sales Force
Derive
greater value
from the
lead
qualification
Sophisticated
Web 2.0
users
Highly
performing
websites
High social
media
presence
Have web 2.0
consultants
B2B vs B2C

12. 1. Target segments?
2. Revised pricing ?
3. Are we missing anything?
Hubspot – Problem Statement
B2B B2C
Marketer
Mary
Owners Ollies

13. Problem 1: Which customers to serve

14. Owner Ollies Marketer Mary
Pros Cons
Easier to Reach High churn rate-
mainly concerned
about SEO
Low cost of
acquisition - $1000
Revenue generated
is less
Basic and simple
solutions
Unstable business
model
Shorter Selling
Cycle
Pros Cons
Lower Churn rate Harder to reach
High Revenue per
customers
Longer Selling
Cycle
Longer relationship CMS usage is less
than 2%
Usage of more
inbound tools of
hubspot
Acquisition cost is
high - $5000

15. OO MM
Churn rate 4.3 3.2
Average customer
life
23.36 31.25
Acquisition Cost $1000 $5000
Initial amount $500 $500
Monthly Profit $250 $500
Customer Life Time
Value (CLTV) 5340 11125
CUSTOMER LIFETIME VALUE
Inference: Towards Marketer Mary

16. Business Type Sub-types Percentage of Customers
(February 2008)
New Owner Ollies
B2B>25 6%
B2B<25 56%
B2C>25 6%
B2C<25 32%
Marketer Mary
B2B>25 41%
B2B<25 26%
B2C>25 18%
B2C<25 16%
Total B2B 65%
Total B2C 35%
New Customer Acquisition

17. BUSINESS TYPE AVERAGE CHURN RATE
(Cancellations per
month) in %
Owner Ollies 4.3
Marketer Marys 3.2
Total B2B 3.3
Total B2C 6.0
CMS 2.1
Non-CMS 5.5
Total 4.1
CHURN RATE
Higher Churn
Rate
Towards CMS
In 2009, 13% of Owner Ollies went for
CMS and Owner Ollies form 73% of the
Customers as of December 2008
Only, 2% of Marketer Mary
chose CMS
B2B segment is found to have the
least churn rate

18. CMS Non-CMS
Churn rate 2.1 5.5
Average customer
life
47.6 18.18
Acquisition Cost $1000 $1000
Initial amount $500 $500
Transfer charge $500 $500
Monthly Profit $250 $250
Customer Life Time
Value (CLTV) 11900 4545
CLTV After Moving to CMS
• CMS- increases CLTV
• Transfer costs- $500 offer for free
• Restrict non-CMS
• Prompt to move CMS

19. B2B SEGMENT
• B2B greater value
• Long Term Relationship
• B2B least churn rate
• 68% of the current
customer
OWNER OLLIES
• 73 percent of the total
customers
• 56% -B<25 category
where only basic tools
required
• Lesser churn rates -CMS
• Acquisition cost is 1/5th of
MM
MARKETER MARY
• Have lesser churn rates
• Increased lifetime value
• Wide range of Hubspot
products.
Recommendations on Target Segments

20. Recommendations on Target Segments
• High Churn rate
• Analyze reason
• Attractive discounts
• Product features be
expanded
• If log-in is rare,
intimate the reasons
for poor results

21. Problem 2: Pricing Model

22. • Diverse Segment
• Reduce Churn rate
• Pricing for new customer
• Retaining the old customer
Problems in Pricing

23. • Software as a Service (SAAS)-renewal model
• Charging upfront for the software – locking in the customers
Pricing Options for Consideration

24. GIVEN PRICING
• Hubspot Owner - $500 consulting fee at start-up and $250/month
ongoing fee
• Hubspot Marketer - $500 consulting fee at start-up and $500/month
ongoing fee
• To move to CMS and extra of $500 is demanded.

25. Target
Segments
Pricing Model
Marketing
Mary
SaaS
B2B SaaS
Owner Ollie Option between
Monthly and Yearly
Pricing Model
Initial payment -
MM - $500
OO - $750
For OO- CMS Monthly- $250
• Every 3 months Package- $750 - $600
• Yearly package can be offered for
$3000 - $2500
Recommendations Based on the suggested segments

26. • Better to go for SaaS
• low upfront cost for its products.
• allows customers to pay cheaper monthly instalments
• HubSpot should address those people who rarely log-in to their accounts
• HubSpot’s customers discontinue at 18 months stage.
• Pricing change-discounts
• Find reason – high churn rate
Based on the following Inference

27. Problem 3: IM vs OM

28. • IM - not capture market potential
• Loses a lot of potential revenue that OM can bring in,
• Competitors - both IM and OM
• Market leadership- A question mark?
• Should Hubspot concentrate on both IM and OM?
Missing Anything?

29. • OM UAC – 6 to 7 times higher than IM.
• Hubspot - loses brand Image and loyalty
• Inbound marketing -pull effect
• IM - good awareness about Hubspot.
• More active awareness will give more leads
Implications

30. • Outbound techniques might be partially applied like online
advertisements
• Logo on the client site
• Need not go into expensive outbound methods like offline
marketing.
• Outbound techniques might be later used in following
scenarios
• For feedback mechanism
• Subscription suggestions
Suggestions

31. Current status of Inbound Marketing
(Hubspot)

32. • 86 percent to 117 percent year over year in bookings
• 80 percent in MM, 20 percent in OO.
• Towards simple integrated system.
marketer -> HubSpot
sales person ->Salesforce.com
• Plan to go public
• Pricing:
 Basic-$200/mo , Professional -$600/mo and for Enterprise -$1000/mo .
 No of Contacts in Database (pricing change as of September 1, 2011)
 Cost for Small/Medium Business: $3,000/yr
 Cost for Enterprise Business: $18,000/yr
 Comparative package based on features.

33. THANK YOU