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Hubspot Case Analysis

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A case analysis of Hubspot by my team members and I.

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Hubspot Case Analysis

  1. 1. Beth Malley, Scott McSweeney, Jeremy Grant, Yang Cao, Olayemi Adejumo
  2. 2. HubSpot’s Current Position Leader in Web 2.0 and Inbound Marketing  Unique product  At a crossroads   1,000 customers  Goal: accelerate growth rate and increase profitability  Segmenting customers  Adjust pricing model  Supplement inbound marketing?
  3. 3. Profits vs. Growth Profit Owner Ollie Marketer Mary Growth January 2008 December % 2008 Increase Cost $1,000 $5,000 Leads 1,370 3,000 218.98% Current Revenue $250/ month $500/ month Opportunities 74 300 405.41% BreakEven 4 months 10 months New Customers 35 115 328.57% Churn Rate 4.3% 3.2% Expected 23.26 Lifetime months 31.25 months Lifetime Profit $10,625 $4,814
  4. 4. Segmentation Strategy  Further segment Owner Ollie  Offer two packages  Appeal to Marketer Mary  Lower churn rate  More time and money, less sensitive to price  Constitute majority of new customers  Greater utilization of analytics  More resilient to adverse economic conditions
  5. 5. Owners’ Package  Incentivize use of CMS  Reduces churn rate  $250/month with use of CMS  $315/month without CMS  Annual Contracts     Encourage owners to use HubSpot Reduces churn rate Guarantees profitability for at least 1 year Generate content demonstrating added benefits with continued use
  6. 6. Marketer Mary’s Package Raise price to increase profits  Annual contract  Focus on analytics, less on websites   Develop more robust tools  Become a marketing analytics leader  Inbound marketing geared toward Mary  Generating data demonstrating success of Hubspot and inbound marketing
  7. 7. New Pricing Structure CMS Owner Ollie Non-CMS Owner Marketer Mary Ollie Cost to Acquire $1,000 $1,000 $5,000 Current Price/ Month $250 $250 $500 Current BreakEven 4 months 4 months 10 months New Price/Month $250 $315 $625 New Break-Even 4 months 3.17 months 8 months Churn Rate 2.1% 5.5% 3.2% Expected Lifetime 47.62 months 18.18 months 31.25 months Current Lifetime Profit $10,905 $3,545 $10,625 New Lifetime Profit $10,905 $4,727 $14,531
  8. 8. = $69/Month* = $2000/Month Maximum = 10 Users = $125/Month* * = Per User
  9. 9. Inbound vs. Outbound Marketing  Don’t use outbound marketing  Hurts brand image  5-7 times more expensive Already turning away 50% of leads  Demonstrate to potential customers how inbound marketing works for HubSpot   HubSpot employees’ passion for inbound marketing
  10. 10. Solution  Address both Marketer Mary and Owner Ollie segments  Capture greater value from Mary going forward Implement annual contracts  Adjust pricing  No outbound marketing 
  • febrianM

    Jan. 12, 2020
  • MathieuLabro2

    Oct. 12, 2019
  • MitulShah52

    Jun. 9, 2018
  • tushartharad

    Aug. 28, 2017
  • sadiarfq

    May. 7, 2017
  • SubodhRastogi

    Nov. 9, 2015

A case analysis of Hubspot by my team members and I.

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