HubSpot: Inbound Marketing and Web 2.0 Case Study Solution
Rivalry with the existing competitors:
Before Hubspot started there were a lot of companies that were already working on software development but Hubspot penetrated the market with a new idea of inbound marketing and that took the industry by surprise. The competitors like Eloqua are working towards improving their services and doing outbound and inbound marketing.
Strategies:
Single Price Strategy:
The company has 2 main groups to cater, Ollie Owners and Marketer Mary. These two groups have different preferences and different resources to get the work done. The company has been charging them different monthly on-going fee but have charged the same startup fee from both the groups. If they lower the prices and charge them both the same price, they might be able to capture more of Marketer Mary companies but the Sales figure will not grow as quickly as the expenses of catering that group will cost them. Marketer Mary is being provided with a lot more facilities than Olli Owners.
On the other hand, if they increase the prices of the services, they might lose the small business owners who fall in Ollie Owners group as they cannot afford a very large investment or paying a hefty amount on marketing subscriptions.
As the company is a diversified company the prices charged should be different and according to the services provided to each group.
Customer Retention:
As Hubspot is a service-based company it needs to serve its customers in the best possible way and retain its customers. Initially Hubspot started to gain its customers through inbound marketing as that was what the company preached. It attracted the people and started to develop its pool of prospects on a website which was attractive to the people who were interested in marketing their brands.
Later on, they started marketing themselves on social media by creating groups and airing a TV program named Hubspot TV. They made fun of the people who are still stuck with outbound marketing and had a way with comedy that attracted a lot of people and their customers started to increase on a daily basis. They started to fill the “funnel” of the company with customers.
In order to retain the customers, they had to be efficient. They served all sorts of customers in the same manner; the services were different but the procedure was similar. Due to such a vast spread out, they had a lot of different sorts of customers to deal with. Initially the company served all sorts of people and catered every customer but with time they started to filter the customers and separated them after filtration into 2 major groups; Ollie Owners and Marketers Mary.
The team members of the company have different point of views when asked on the groups as to which group is more important to the company. A few believe that the Marketer Mary is a group who can pay more and if we retain them and try to gather more and more of such customers the profits will maximize while the others believe that Olli Owners are the growing companies and they would be more loyal to the company and would want Hubspot for a longer period of time.
Cost-benefit Analysis:
As per the cost benefit analysis (Appendix 4), the initial investment done by the company can be recovered from the Ollie Owners, a loss of $250 will happen if they do not continue with their subscription and the benefit to the company is higher as the company does not have to give them a lot of services. But in Marketer Mary the company has to face a loss of $4000 if they do not continue the subscription next month, and this will highly affect the company’s profits. The company also has to serve them more than Ollie Owners.
Conclusion:
The company can grow its roots further and can reach the height of success as there is still a lot of potential in the market. It needs to take care of its financial position and bring new ideas to take the inbound marketing on a new level of marketing. It should bring more options to cater the customers from all kinds of concerns and take a full benefit from them. The idea of inbound marketing has restricted the company but it can still achieve its goal to make this marketing strategy work and it has worked on many occasions.
Appendix 1: Hubstaff Inc. distribution
Source: (Gurufocus, n.d.)
Appendix 2:
Appendix 3:
Appendix 4:
