Hubspot Case

Individual Written Case Analysis
HubSpot: Inbound Marketing and Web 2.0

Oct 26, 2017

HubSpot, founded by Brian Halligan and Dharmesh Shah, is an Inbound Marketing start-up that is riding on the Web 2.0 wave to provide marketing management services for the new internet era in which we live now. They provide marketing strategies, consulting, software solutions and analytical services to businesses, which in-turn facilitate those businesses to ‘pull-in’ their customers. HubSpot achieves this by helping their business customers use blogging, social media outreach, and search engine optimization to pull-in their customers.
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Some of the businesses are run by mom/pop stores to dedicated marketers. Even though HubSpot has attempted to develop products and services for their diverse market segments, their services are not effectively used by their diverse segments. For example Owner Ollies after achieving some initial boost with HubSpot drop-off their subscription. These Owner Ollies do not use much of the analytical data that HubSpot provides. Incidentally even though it is more expensive to get a Marketing Mary onboard, she finds these analytical reports helpful and relatively has a longer relationship with HubSpot. This dichotomy is evident from the churn rate (Exhibit 8 from the case paper).
Thus HubSpot should focus on those customer segments that are:
1. Growing and
2. Realizing value in its products and services.

Of the various market segments under Owner Ollies, HubSpot should focus only on B2B > 25 customers as they are the only segment that is growing (see Fig. 1). When it comes to Market Mary’s the company should focus on B2B > 25 and B2C > 25 segments as they are the only two segments that are growing (see Fig.
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Segment the market to focus where there is the biggest bang for the buck:
a. Avoid Owner Ollies who have less than 25 employees. Improve the funneling and qualifying leads to ensure that company resources are not wasted on customers who are not benefiting from the product
b. Focus on Marketing Mary’s who have more than 25 employees
2. Change the pricing strategy:
a. Require Owner Ollies sign-up for an annual subscription of $250/month rather than a month-to-month
b. Marketing Marys: Offer either a monthly subscription price of $750/month or a two year subscription price of $500/month
3. Focus only on inbound marketing methods. Continue to further develop their Marketing Marys segment by continuously finding opportunities to add value.
4. Company should not attempt outbound marketing. Attempting outbound marketing goes against what the company is built on. Its unique value proposition will lose significance.
5. Do not create services such as CMS for small market segments. Only provide services only if there is justifiable ROI. For CMS services the per-hour consulting charges have to be increased to reflect the actual market consultation fees (e.g. $150/hour rather than $500 for 12

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