Hubspot Case Analysis

EXECUTIVE SUMMARY

We recommend that HubSpot target Marketer Mary within B2B companies through adding advanced features and appeal to Owner Ollie with spare resource. In addition, we recommend they focus on inbound marketing alone, and raise both onboarding charge and ongoing fee.

ANALYSIS

Given the goal of accelerating growth rate, we consider the potential profitability of each segment from a quantitative (Table 1) and qualitative (Table 2) approach. In addition, we also consider the overall market value generated by each segment (Table 3).

Narrow Focus or Wide Net

HubSpot is on the right track to refine its focus. Derived from its customer funnel (Exhibit 1) and competitive field (Exhibit 3), many of HubSpot’s individual applications have competitors, but it strives to provide an all-in-one approach. Given the diversity in product portfolio, it would be challenging for HubSpot to work out an inclusive strategy satisfying different types of customers. We recommend HubSpot narrow its target market and enhance specific features to increase leads conversion rate.

B2B Customers or B2C Customers

B2B customers appreciate easy-to-use content templates and straightforward marketing analytics since they are less knowledgeable and sophisticated than B2C customers. More attention and support will be given to them at early stage, while HubSpot can gain in return customer loyalty and long-term relationship implied by the fact that B2B customers present a high monthly retention rate of 96.7% which contributes a remarkable CLV over $6,000. B2C customers present 3.3% lower in retention rate and CLV just above $2,000. (Appendix A)

In addition, differences between B2B and B2C marketing determine that B2B customers would obtain greater value from inbound marketing in terms of assessing multichannel information thoroughly and feeding the top of customer funnels effectively. From HubSpot’s customer portfolio (Exhibit 6), we observe a growing proportion of B2B customers over the past several months, climbing to 68% at December 2008, a clear indicator of customer preference.

Marketer Mary or Owner Ollie

HubSpot should further narrow down customer segment to Marketer Mary (MM) in B2B section. Though MM only accounts for 27% of customer portfolio, Owner Ollie (OO) possesses a higher churn rate of 4.3% per month, compared to MM’s 3.2% per month. The reason may be that MMs

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