HubSpot: Inbound Marketing and Web 2.0

1. Inbound Marketing & Web 2.0
Presented By:
Aravind Kadakethu (UM16073)
Deepak Mohanty (UM16080)
Sandeep Panda (UM16104)
Saptarshi Dhar (UM16110)
Kumar Aditya (UM16121)
Abhishek Mishra (UM16125)

2. Company Background
– Founded by Brian Halligan and Dharmesh Shah in 2006
– Transformative power internet possessed for changing the way small businesses
operated
– Enabling businesses with new ways of marketing
– Traditional marketing methods were losing their effectiveness
– Fund raising
– $5 million from General Catalyst
– $12 million from Matrix Partners

3. Inbound marketing
– Practices that pulled prospective customers towards a business and products
– Informative content was used to entice prospects to interact with the company
and began a relationship with it
– Three important skill:
– Ability to write compelling content
– Ability to distribute that content so that it was easily found by prospective customers
– Ability to attract and engage a community of followers

4. Outbound Marketing v/s
Inbound Marketing
– Message was pushed to a mass audience that contained many who are not in
the market – Outbound Marketing
– Message was designed in such a way that pulled in only those customers who
are interested in the product (more efficient) – Inbound Marketing
– Lead generated using inbound marketing cost five to seven times less than lead
generated using outbound marketing
– In B2B industry, 37% of marketing budget is spent on inbound marketing
compared 30% in outbound marketing
– Allowed small businesses to compete with larger firms

5. The HubSpot Product
– Content Design
– Content Management System (CMS)
– Exposure Optimization
– Search Engine Optimization (SEO)
– Lead Tracking and Intelligence
– Marketing Intelligence Analytics – helps firm to identify prospective customers

6. Objectives
Catering to
different
segments
of
customers
Adjust
Pricing
Model
Venture
into
outbound
marketing?

7. Customer Segmentation
Segmentation Pricing Model
Owner Ollie Marketer Mary
73% of customer portfolio 27% of customer portfolio
Small businesses Large businesses
Don’t have dedicated marketing professional Have dedicated marketing professional
Cost to acquire new customer is less ($1000) Cost to acquire new customer is more ($5000)
Avg. Churn Rate – 4.3% Avg. Churn Rate – 3.2%
B2B Firm B2C Firm
Interested only in basic template Sophisticated web 2.0 users
Complex business model due to longer decision
cycle
Highly performing websites
Selective Sales Force High social media presence
Derive greater value from lead qualification Have web 2.0 consultants
Avg. Churn Rate – 3.3% Avg. Churn Rate – 6.0%

8. Customer Lifetime Value
Owner Ollies Marketer Marys
Monthly Fees $250 per month $500 per month
Acquisition Cost $1000 $5000
Break-Even 3.5 months 9 months
Churn rate 4.3% 3.2%
CLTV $3920 $5935
Segmentation Pricing Model
Two Ways to improve CLTV
• Increase Price
• Reduce Churn

9. Impact of CMS on Owner Ollies
CMS Ollies Non-CMS Ollies
Churn rate 2.1% 5.5%
Average Customer Lifetime 24.9 months 14.9 months
CLTV $5726 $3235
Segmentation Pricing Model
Key Takeaways
CMS increases CLTV by $2000
Website Transfer cost is $500
Transfer cost hinders revenue
New tactics
Entice old customers to transfer
Limit options for Non-CMS customers
Upto 1.6 million revenue growth in years

10. Package Offerings
Owner Ollie
•Incentivize use of CMS
•$250 per month with CMS
•$300 per month without CMS
•Let go of transfer price
Marketer Mary
•Annual Contracts
•Dynamic pricing according to customer needs
•Focus more on analytics instead of content management
•Demonstrate how inbound marketing generates more profitable leads
Segmentation Pricing Model

11. Competitor Pricing
BASIC STANDARD ENTERPRISE
Price
Monthly cost for
database < 10k
contacts
$2,000 $4,000
Contact Sales
Users Marketing Users 10 50 Unlimited*
Segmentation Pricing Model

12. New Pricing Structure
CMS Owner Ollie Non-CMS Owner
Ollie
Marketer Mary
Cost to Acquire $1000 $1000 $5000
Current Price/Month $250 $250 $500
Current Break-Even 4 months 4 months 10 months
New Price/Month $250 $300 $600 onwards
New Break Even 4 months 3.33 months 8.3 months
Churn rate 2.1% 5.5% 3.2%
Expected Lifetime 47.62 months 18.18 months 31.25 months
Current Profit $10905 $3545 $10625
New Expected Profit $10905 $4454 $13750+
Segmentation Pricing Model

13. Outbound Marketing Decision
Segmentation Pricing Model
Increase
Growth Rate
Hurt Brand
Image

14. Limited Outbound Technique
– Continue with current inbound strategy
– Introduce Lukewarm Calling
– Call those who have expressed interest but opted out
– Already have a relationship with them
– Permission to contact them
– Discover why clients opted out of Hubspot
– Should not hurt brand image since not open outbound marketing
Segmentation Pricing Model

15. Third Party Integration Services
– Improves Convenience
– Valued highly by clients
– Reduces Churn
– One-stop solution for all marketing needs
– Revenue stream from partners
Segmentation Pricing Model

16. Conclusion
– Push CMS to reduce customer churn in Owner Ollies
– Change pricing model for Marketer Marys
– Introduce a base price model
– Price & Product Customization according to customer
– Integration with third party services like MailChimp or AWS
– Use Outbound techniques in a limited way such that company
image is not hurt