Hubspot Case Study

...

While Pursuing both MM and OO customers may be advantageous in that this option offers the largest market potential compared to MM/OO alone (Exhibit 1). However, this also means distracting HubSpot from its core competencies. Significant time, cost and effort may be lost which may be better devoted to serving a specific segment (OO) alone. This also carries the risk of spreading HubSpot’s resources out too thin, which may be detrimental to its growth as a young startup. The competition is also tougher if the company focus on both segments.

At the moment, HubSpot uses software-as-a-service model by charging a fixed fee while signing up and then a monthly fee. Since we recommend HubSpot to focus on Owner Ollies, we observed a few opportunities to innovate on the pricing. First, to get more customers on board and attract small businesses, there could be an option for a basic product that doesn’t require an upfront payment for one month, but they need to subscribe for continued use. Secondly, customers could be incentivized to use the CMS system by offering a lower subscription price. For example, the monthly fee could be $200 for customers who use the CMS and $250 for those who do not. Lastly, there could be an option for a discounted long term subscription which can further improve the CLV such as annual subscription with cheaper price (for example $2500/year package, instead of total $250 x 12 months) to lock the customer. Furthermore, to incentivize customers to spend more time with the software, HubSpot could introduce reward points that are based on the weekly time spent by the user on the software and offer discounted price near 18 months customer age to reduce the high churn rate at that stage.

When launched, HubSpot was determined to improve inbound marketing processes and make them accessible to business owners. Hence, if we think about the company’s mission, an outbound marketing strategy does not fit into its goals. It is more expensive than inbound marketing and has a lower success rate. However, there could be subtle use of some outbound techniques to make the brand more visible and recognized. For example, customer leads who showed an interest could be sent messages to remind them of their interest in a product. There could be exercises to increase user engagement through forum discussions, webinar sessions with industry veterans and small conferences targeted at interested customers. This will not hurt the brand image of the company. Instead, it is likely to create a dedicated network of users who appreciate the value proposition that the company offers.