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Hubspot Case Presentation - First Place

Each year, Tulane's Freeman School of Business has each senior enter a case competition as part of the capstone course. Our group,Team Orion, won first place in the fall of 2011 with our analysis of Hubspot.

Group members: Evan Nicoll, Jessica Lange, Connor Dismer (me), and Lloyd Walker

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Hubspot Case Presentation - First Place

  1. 1. HubSpot Inbound Marketing and Web 2.0 Orion Evan Nicoll Jessica Lange Consulting, LLC Connor Dismer Lloyd Walker
  2. 2. Agenda • Introduction • Core Competencies • Goals (General and Specific) • Concluding Remarks and Questions Nicoll Lange Dismer Walker
  3. 3. Core Competencies • Funnel Optimization • Customer Service • Content Management Nicoll Lange Dismer Walker
  4. 4. Goals • General • Growth • Increase Profitability • Exit Strategy • Specific • Outbound Marketing and Segmentation Decisions • Increasing Customer Lifetime Value • Organization Structure Nicoll Lange Dismer Walker
  5. 5. Outbound Marketing and Segmentation Decisions • Outbound Marketing Decision • Add Limited Outbound Technique • Customer Segmentation Nicoll Lange Dismer Walker
  6. 6. Outbound Marketing Decision Increase Hurt Growth Brand Rate Image Nicoll Lange Dismer Walker
  7. 7. Add Limited Outbound Technique • Continue with current inbound marketing strategy • Introduce “lukewarm calling” - Call those who have expressed interest but opted out - Already have a relationship with them - Permission to contact them • Discover why companies opted out of HubSpot • Should not hurt brand image since it is not true outbound marketing Nicoll Lange Dismer Walker
  8. 8. Customer Segmentation • Growing faster and lower Marketer churn rate • Tailor product to pull more Marys Marys in • Focus on Ollies that sell Owner high involvement products • Offer slimmed down Ollies product Nicoll Lange Dismer Walker
  9. 9. Increasing Customer Lifetime Value • Current Customer Lifetime Value • Pricing Segmentation • CMS for Owner Ollies • Third Party Integration Nicoll Lange Dismer Walker
  10. 10. Current Customer Lifetime Value Owner Ollies Marketer Marys Monthly Fees $250 per month $500 per month Acquisition Cost $1000 $5000 Break-even 3.5 months 9 months Churn Rate 4.3% 3.2% CLTV (3 year max) $3920 $5935 Two ways to improve these figures • Increase price • Reduce churn Nicoll Lange Dismer Walker
  11. 11. Pricing Segmentation Percent of 30% 40% 30% 10% Customers Owner Ollie $200 $300 $400 $500 Price Point Original Price $250 Weighted $350 Average Marketer $400 $600 $800 $1000 Mary Price Original Price $500 Weighted $700 Average • Raises average monthly revenue per customer by $100 and $200 • Should not negatively affect churn rate Nicoll Lange Dismer Walker
  12. 12. CMS and Owner Ollies Non-CMS Ollies CMS Ollies Marketer Marys Churn Rate 5.5% 2.1% 4.3% Average Customer 14.9 months 24.9 months 20.9 months Lifetime CLTV (3 year max) $3235 $5726 $5934 Key Takeaways • CMS increases CLTV by over $2000 • Website transfer costs $500 • Transfer makes sense to offer for free New Tactics • Limit options for non-CMS with new Owner Ollies • Entice old customers to transfer • Could earn up to $1.6 million in revenue over 3 years if all existing Owner Ollies transfer Nicoll Lange Dismer Walker
  13. 13. Third Party Integration - Services • Improve Convenience • Valued Highly by Owner Ollies • Less expertise • Limited time • Create a marketplace for Online Marketing Firms • SEO management • Content Production • Added Bonus: We get a cut of the revenue Nicoll Lange Dismer Walker
  14. 14. Third Party Integration - Applications • Offer more functions • Valued by Marketer Marys • Meets demand for more features • Reduces churn • Integrate with third party applications • Reduces long-term costs • Already the case with Salesforce.com • Potential for affiliate revenue • Added Bonuses • More resources to focus on core offerings • Positions HubSpot as central platform for inbound marketing Nicoll Lange Dismer Walker
  15. 15. Organizational Structure The Objectives 1. Operational efficiency and effectiveness 2. Financial Accountability 3. Legal compliance Relevant Controls Over Financial Reporting General Controls Access Controls a) Hot Site Backup Facility a) Password Protection b) Firewall b) Device Authorization c) Audit Trail Table (Reasonableness Check) c) Systems Access Log d) Dispute Finder d) Callback e) Trackback Nicoll Lange Dismer Walker
  16. 16. Organizational Structure Investment Center (limited staff) Database Programming Administrator Marketing Marketing (Owner Ollies) (Marketing Marys) CMS Consultants Consultants 24/7 Customer Help Desk Support Nicoll Lange Dismer Walker
  17. 17. Performance Analysis Real EBITDA $35,000,000.00 $30,000,000.00 $29.9 mill $25,000,000.00 $23.4 mill $20,000,000.00 $18.3 mill $15,000,000.00 $14.3 mill Real EBITDA $10,000,000.00 $11.2 mill $8.8 mill $6.9 mill $5,000,000.00 $4.8 mill $2.7 mill $- $.4 mill 1 2 3 4 5 6 7 8 9 10 Annualized Growth 100 80 85.04 60 73.95 66.43 61.01 56.92 *IRR 74.29 53.72 40 Annualized Growth 20 0 1 2 3 4 5 6 7 8 9 10 Nicoll Lange Dismer Walker
  18. 18. Hedonic Pricing Components Market Share Prime Premium Network Externalities Mindshare Software Price Benefits Trialability Percentage of Percentage of Customers 0.3 0.4 0.3 0.1 Customers 0.3 0.4 0.3 0.1 Weighted Weighted Price 200 300 400 500 Average Price Price 400 600 800 1000 Average Price 60 120 120 50 350 120 240 240 100 700 Nicoll Lange Dismer Walker
  19. 19. Concluding Remarks and Questions • Implement “Lukewarm” Calling to Revise the Funnel • Third Party Integration to Increase CLTV • Management Assertions for Exit Nicoll Lange Dismer Walker
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Each year, Tulane's Freeman School of Business has each senior enter a case competition as part of the capstone course. Our group,Team Orion, won first place in the fall of 2011 with our analysis of Hubspot. Group members: Evan Nicoll, Jessica Lange, Connor Dismer (me), and Lloyd Walker

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