Hubspot Case Assignment By: Alexis Leyh Main Problem: Hubspot’s funding and negotiations with Venture capital firms relied solely on their performance. In comparison to competitors Omnicare, Constant Contact, and Salesforce.com, Hubspot’s churn rate and sales velocity were extremely low. They needed to find alternatives to arriving at a churn rate of 2% and figure out how to gain the appropriate customers as well as sustaining them for the span of the company’s lifetime. Situation Analysis: Company: Hubspot was founded in 2006 and branded as a developed an easy-to-use collection of marketing tools for small, medium, and large sized businesses. They created “an entire marketing system” that modeled the software-as-a-service (SaaS) setup to better represent their product. By using the technique of inbound marketing, the company had gained 1,400 subscribers by June 2009. Their three product suites personalized to small, medium, and large companies- which help with website management and marketing activities- are sold to B2B and B2C clientele. Customers: Hubspot’s target market focuses on three business segments or industries based on size: Small, Medium, and Large. Within these industries, Hubspot can further segment into business-to-business and business-to-consumer sellers to further categorize the software to fit the businesses needs. Small companies can be characterized as minimalist users of the system. Their package includes Hubspot’s CMS (Content Management System) costing $250 per month. (See Exhibit 1B ) Gaining more attention from the sales team at Hubspot is the Medium and Large sized companies. They purchase their contracts annually as opposed to monthly, allowing for more time and availability to use all three marketing activities offered. Medium-sized businesses pay $9,000 per year while large businesses pay $18,000 per year. (See Exhibit 1B ) These customers have access to consulting, limited and unlimited, depending on size of industry, which allows for constant interaction and communication.
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- Spring '14