HubSpot: Inbound Marketing and Web 2.
0
HubSpot, founded in 2006, provides inbound marketing strategies and practices that pulled prospective
customers towards a business and its products through the use of Web 2.0 tools and applications such as
blogging, search engine optimization, and social media etc. It provides different products such as content
design, SEO tools, and lead tracking and intelligence to help customers increase their reach in market.
Inbound Marketing
Inbound marketing is a marketing methodology that is designed to draw visitors and potential customers
in, rather than outwardly pushing a brand, product or service onto prospects in the hope of generating leads
or customers. To maximized inbound marketing reach, three distinct skills are required:
Ability to write compelling content that would attract customers
Ability to distribute that content so that it can easily be found by prospects
Ability to attract and engage a community of followers who can disseminate the information to
others
5 C framework for HubSpot
Company Customer
Tech Start up, In-bound marketing 1000 customers
Thought leader in web 2.0 Low cost & greater efficiency
They live and breathe inbound marketing Marketing Mary – 73% (25 employee)
Fast pace company & energetic employee Owner Olly – 23% (25-100 employee)
Low cost & greater efficiency
Software products (MS, SEO tools, lead tracking)
Context Competitor
From web to web 2.0. Eloqua (expensive & complicated)-good for
Growing use of internet, Social Media large enterprise
Harness internet to build a business. Salesforce
Huge market potential
Sales funnel (Create Traffic, Analyse Qualify Leads,
Close Sales)
SWOT analysis
•Innovative product portfolio in •High churn rate after 12 months
inbound marketing Dwindling rate of leads after a while
•Latest technology and user for some customers
friendly products •Challenge in scalability of business
•Optimized keyword search Content template too rudimentary
•Great Customer satisfaction for some B2C customers
•Low Cost Strength Weakness Strategic planning
•Training and expert guidance •Over dependence on inbound
marketing
Threats Opportunities
•Technology Evolution •Huge potential customer base
•Competition from other New innovative products
companies such as Web Huge internet potential
Position, salesforce.com
Profit calculation for the segments and the CMS (Customer Management System), Non-CMS products are as shown in
the table below.
Owner Ollies Marketing Mary
Churn Rate (%) 4.3 3.2
Average Customer Life per month 23.26 31.25
Acquiring Cost $1000 $5000
Initial payment for service $500 $500
Monthly payment $250 $500
Customer Life-Time Revenue $6315 $16125
Breakeven time 2 months + Initial Payment 9 months + Initial Payment
Net profit $5315 $11125
CMS Non-CMS
Churn Rate (%) 2.1 5.5
Average Customer Life per month 47.6 18.18
Acquiring Cost (Assuming only Owner $1000 $1000
Ollies)
Initial payment for service $500 $500
Upgradation Charge $500 $500
Monthly payment $250 $500
Customer Life-Time Revenue $12900 $5545
Net profit $11900 $4545
Current Pricing Model
Owner Ollies Marketing Mary
Initial Payment $500 $500
Monthly payment $250 $500
CMS Upgradation Charge $500 $500
Recommendations for HubSpot
Bundling Price Offer Suggestion
Owner Ollies (73%) Marketing Mary (27%)
Base Product $250 $500
With CMS Upgrade $500 $500
Total Cost $750 $1000
New Bundled price $850 $850
From the Bundling processing shown above, the breakeven price will be (0.73*750 + .27*1000) = $818. HubSpot
can provide a single bundle at $850 for both OO and MM segments and can eliminate the Base product. This will
enable HubSpot to make a profit of $32 per sale.
Husbpot must enhance their SEO and web 2.0 content to be attractive for the MM segment.
The bundled product will target the Marketing Mary and the CMS customers. The current target of ‘any and every
customer’ might not be the correct target segment for hubspot.
Certification for Inbound Marketing: HubSpot can target about 0.1 % (2287) of its potential customers and have a
targeted information session which would enable the potential customers to get enough information about
Inbound Marketing. These trainings can be held across 5 locations with a budget of about $50,000. This can be
placed on LinkedIn, Facebook and other strategic locations which can be used for inbound marketing by enhancing
the Search Engine operations.
