Hubspot Case Analysis

441 words - 2 pages

I would suggest that HubSpot target only to Owner Ollie’s with a heavy focus on B2B.
Back to the time when the case was written, HubSpot had 1,000 diverse customers, including small business owners, marketing managers of large firms in the health care, real estate, and construction industries. The inbound marketing did not target a specific type of customer and ignore 50% of the leads. Since each segment had its own needs and service requirements, gaining economics of scale was difficult, so were the implementation of strategic planning and pricing. Single-Segment Concentration would allow for the company to maximize its efficiencies as it would only need to support one type of customers. ...view middle of the document...

An up-front price increase is easier to be done, because Owner Ollie customers were not likely to shop competitors pricing and would be able to absorb a price increase.
* Although, Owner Ollies presented a higher churn rate than Marketer Mary, they displayed higher possibilities of relying on HubSpot’s content management system (CMS), due to the lack of marketing professions to host their websites. Customer group using CMS exhibited the lowest average churn rate; therefore, pushing the CMS service to Owner Ollie customers would significantly reduce the churn rate.
* Owner Ollies were less knowledgable and sophisticated than Marketer Marys and derived greater initial value from inbound marketing than the latter. A larger impact HubSpot could make to Owner Ollies’ businesses is a great selling point of HubSpot’s products.
The rational to choose B2B over B2C is as follows:
* Since most B2B customers had little to no experience with Web 2.0 and no other agencies or consultants supporting their efforts, they relied a lot on HubSpot’s attention and supports during start-up and during their lives as customers. The high reliance on HubSpot’s services increases B2B customer’s switching costs and enhances HubSpot’s price bargaining power.
* B2C customers generally required more sophisticated and customized systems which were impractical for HubSpot to completely fulfill, given that HubSpot is a start-up company without a large enough technical support team to customize every product they sell. And compared to B2C, it’s easier for B2B customers to derive value from inbound marketing.

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