1. Anusha.G Saranya.B
Section A, Second Year Section A, Second Year
Department Of Management Studies Department Of Management Studies
Pondicherry University Pondicherry University

5. Type : Private
Industry : Internet Marketing
Web Analytics
Online Marketing
Founded : June 2006
Headquarters: Cambridge, Massachusetts
Key people : Brian Halligan and Dharmesh Shah,
CEO & Founder

6. 3 skills for inbound marketing
• Compelling content
• Content distribution
• Engage Community
Benefits of Inbound Marketing
• Attaining Marketing Efficiencies
• Sales + marketing = Smarketing
• Building Relationships
• B2B increased 37% inbound and 30% outbound

7. What Hubspot provides?
• Content Management System
• Keyword Grader
• Templates
• Exposure Optimization
• SEO tools
• Link Grader
• Lead Tracking and Intelligence
• Marketing Intelligence analytics
• Sales Funnel

8. SALES
FUNNEL

9. COMPETITOR’S
Filling the
AREA &
customer funnel MARKETPLACE
• 2009-1000 diverse customer
• Robust website -3,00,000
unique vistors in 2008
• 8000- Linkedin- Promarketers
• Hubspot TV
• “Cold Calling is for Losers” –
35000 times
• Salesforce called on all leads

10. Targeting Segments
• Owners Ollie-68%
1-25 Employees
• Objective:
Generate More
leads (SEO)
• Marketer Mary-31%
• 25-100 employees
• Web consultants
• Analytics and
reports

11. B2B vs B2C
Interested Sophisticated
only in Web 2.0
Complex
basic users
Business
template Highly
Model due to
performing
longer
websites
decision cycle
Business Business
2 2
High social
Selective
Sales Force
Business Customer media
presence
Derive
greater value
Have web 2.0
from the
consultants
lead
qualification

12. Hubspot – Problem Statement
1. Target segments?
B2B B2C
2. Revised pricing ?
3. Are we missing anything? Marketer
Owners Ollies
Mary

13. Problem 1: Which customers to serve

14. Owner Ollies Marketer Mary
Pros Cons Pros Cons
Easier to Reach High churn rate- Lower Churn rate Harder to reach
mainly concerned
about SEO High Revenue per Longer Selling
Low cost of Revenue generated customers Cycle
acquisition - $1000 is less
Longer relationship CMS usage is less
Basic and simple Unstable business than 2%
solutions model
Usage of more Acquisition cost is
Shorter Selling inbound tools of high - $5000
Cycle hubspot

15. CUSTOMER LIFETIME VALUE
OO MM
Churn rate 4.3 3.2
Average customer 23.36 31.25
life
Acquisition Cost $1000 $5000
Initial amount $500 $500
Monthly Profit $250 $500
Customer Life Time
Value (CLTV) 5340 11125
Inference: Towards Marketer Mary

16. New Customer Acquisition
Business Type Sub-types Percentage of Customers
(February 2008)
B2B>25 6%
New Owner Ollies B2B<25 56%
B2C>25 6%
B2C<25 32%
B2B>25 41%
B2B<25 26%
Marketer Mary
B2C>25 18%
B2C<25 16%
Total B2B 65%
Total B2C 35%

17. CHURN RATE
BUSINESS TYPE AVERAGE CHURN RATE
(Cancellations per
month) in %
Higher Churn
Owner Ollies 4.3 Towards CMS
Rate
Marketer Marys 3.2
Total B2B 3.3 In 2009, 13% of Owner Ollies went for
CMS and Owner Ollies form 73% of the
Total B2C 6.0
Customers as of December 2008
CMS 2.1
B2B segment is found to have the
Non-CMS 5.5 least churn rate
Total 4.1 Only, 2% of Marketer Mary
chose CMS

18. CLTV After Moving to CMS
CMS Non-CMS
Churn rate 2.1 5.5
Average customer 47.6 18.18
life • CMS- increases CLTV
Acquisition Cost $1000 $1000 • Transfer costs- $500 offer for free
• Restrict non-CMS
Initial amount $500 $500 • Prompt to move CMS
Transfer charge $500 $500
Monthly Profit $250 $250
Customer Life Time
Value (CLTV) 11900 4545

19. Recommendations on Target Segments
OWNER OLLIES
B2B SEGMENT
• 73 percent of the total MARKETER MARY
customers • B2B greater value
• 56% -B<25 category • Long Term Relationship • Have lesser churn rates
where only basic tools • B2B least churn rate • Increased lifetime value
required • 68% of the current • Wide range of Hubspot
• Lesser churn rates -CMS customer products.
• Acquisition cost is 1/5th of
MM

20. Recommendations on Target Segments
• High Churn rate
• Analyze reason
• Attractive discounts
• Product features be
expanded
• If log-in is rare,
intimate the reasons
for poor results

21. Problem 2: Pricing Model

22. Problems in Pricing
• Diverse Segment
• Reduce Churn rate
• Pricing for new customer
• Retaining the old customer

23. Pricing Options for Consideration
• Software as a Service (SAAS)-renewal model
• Charging upfront for the software – locking in the customers

24. GIVEN PRICING
• Hubspot Owner - $500 consulting fee at start-up and $250/month
ongoing fee
• Hubspot Marketer - $500 consulting fee at start-up and $500/month
ongoing fee
• To move to CMS and extra of $500 is demanded.

25. Recommendations Based on the suggested segments
Target Pricing Model
Segments
Initial payment -
MM - $500
Marketing SaaS OO - $750
Mary For OO- CMS Monthly- $250
• Every 3 months Package- $750 - $600
B2B SaaS • Yearly package can be offered for
$3000 - $2500
Owner Ollie Option between
Monthly and Yearly
Pricing Model

26. Based on the following Inference
• Better to go for SaaS
• low upfront cost for its products.
• allows customers to pay cheaper monthly instalments
• HubSpot should address those people who rarely log-in to their accounts
• HubSpot’s customers discontinue at 18 months stage.
• Pricing change-discounts
• Find reason – high churn rate

27. Problem 3: IM vs OM

28. Missing Anything?
• IM - not capture market potential
• Loses a lot of potential revenue that OM can bring in,
• Competitors - both IM and OM
• Market leadership- A question mark?
• Should Hubspot concentrate on both IM and OM?

29. Implications
• OM UAC – 6 to 7 times higher than IM.
• Hubspot - loses brand Image and loyalty
• Inbound marketing -pull effect
• IM - good awareness about Hubspot.
• More active awareness will give more leads

30. Suggestions
• Outbound techniques might be partially applied like online
advertisements
• Logo on the client site
• Need not go into expensive outbound methods like offline
marketing.
• Outbound techniques might be later used in following
scenarios
• For feedback mechanism
• Subscription suggestions

31. Current status of Inbound Marketing
(Hubspot)

32. • 86 percent to 117 percent year over year in bookings
• 80 percent in MM, 20 percent in OO.
• Towards simple integrated system.
marketer -> HubSpot
sales person ->Salesforce.com
• Plan to go public
• Pricing:
 Basic-$200/mo , Professional -$600/mo and for Enterprise -$1000/mo .
 No of Contacts in Database (pricing change as of September 1, 2011)
 Cost for Small/Medium Business: $3,000/yr
 Cost for Enterprise Business: $18,000/yr
 Comparative package based on features.

33. THANK YOU