HubSpot: Inbound Marketing and Web 2.0

Abhijit Roy | Ajay Verma | Himanshu Jain | Nitish Mittal | Yogesh Gupta

© http://thesocialcanvas.blogspot.com

Issues

» Developing market segmentation and targeting

strategies to decide which customer to serve and

which to turn away

» Come up with suitable Pricing Model

» Determining whether inbound marketing programs

can generate enough scale or whether traditional

outbound marketing methods need to be employed

to accelerate growth 2

HuBspot» SaaS Inbound Marketing Application

» Pull rather Push

» Subscription Model of Revenue

» Customer Conversion Cost - Immediate

» Revenue over a period of Time

» Gap in Cash Flows – Bigger with growth

» Requires Large Capital

» Churn in the middle?

» Actual Marketing is NOT done by HubSpot – Marketplace

» Labor intensive , Lot to Learn , Time Consuming 3

HubSpot customer funnel

4

100%

45.81%

1.51%

0.1% => 0.4%

0.03%

HubSpot customer funnel

5

Nurturing

Not Converted

Market Activities

6

Creating Traffic

Lead Qualification

(Profiling)

Conversion

Marketing

Sales

HubSpot

Salesforce.com

SEGMENTS

» Total Number of Customers till December 2009

» (Total Customer Till December 2008 + Customer Acquired

in December 2008* (1+Customer Acquisition Growth

rate) ) * (1-Churn rate)

» Owner Ollies : 1642

» Marketer Mary : 4407

» B2B : 6970

» B2C : 973

7

SEGMENTS CLV

» $500+Average Revenue Per Month*Average

Customer Life

» B2B , Churn = 3.3%

» Average Life = 15.37 Months

» CLV = $ 5371

» B2C , Churn 6%

» Average Life = 8.84 Months

» CLV = $ 33018

SEGMENTS – B2B

» OO Market : ~ 83K

» OO Life : 14.31 Months

» CLV: $ 4077.5

» Hubspot Owner

» Breakeven Month : 2

» Lower Churn rate for

CMS hosted sites9

» MM Market : ~ 25K

» MM Life: 21.25 Month

» CLV: $ 11125

» Hubspot Marketer

» Breakeven Month: 9

TARGET SEGMENTS

10

But Marketing Rules are changing , Target ALL without any discrimination

X X

B2B

B2C

OO MM

Pricing Model

» Currently Monthly

» Exhibit 8 : Average Age of Customer ~ 12.7 months

» Shift to yearly Subscription

» Customer Acquisition Cost will be recovered sooner

» Customer Lock-in

» May Lose out OO Customers

11

» Option to Customer : Monthly or Yearly Subscription

» HubSpot Owner : $500 + ($250/Month or $2000/Year)

» HubSpot Marketer : $500 + ($500/Month or $5000/Year)

inbound Vs outbound marketing» “If we couldn’t make inbound marketing work for our own company, then

we shouldn’t be selling software that helps other companies do it.”

» Exhibit 8 : The Flat final conversion rate is misleading

» No STP being done during that time => Quality of leads

» Cost of Lead Generated using IM is 5-7 times less

than a lead generated by OM

» Go for Inbound

12

Food for thought

» Online-to-Online Closure

» Online-to-Offline Closure

» Manipal Universal Learning

» Online Lead Generation to Offline Final Closure

» 2nd Moment of Truth : When prospective students come to the

class for counseling

» Will Inbound strategy differ?

13

THANK YOU