Hubspot : Inbound

Marketing and Web 2.0

Value perception by OO, MM, B2B and B2C Segments
Marketing Mary (MM)
• Interested in analytics and reports
• Ran many inbound marketing programs.
Hence, needed robust and sophisticated
tools to design and measure results.
• Difficult to acquire these customers but
stayed longer.
• Long customer life was due to usage of
monthly analytics and reporting.
Business to Business (B2B)
• Had little or no experience with Web 2.0
and required more attention in form of
customer service.
• Derived greater value from inbound
marketing to feed their customer funnel
as they sold complex products involving
longer decision making cycles.
• Therefore, these customers derived
greater value from lead-qualification
analysis that Hubspot provided.
Owner Ollies (OO)
• Primary objective was to generate more
leads for their businesses.
• Needed quick simple solutions to feed the
top of their customer funnels.
• Cost to acquire was low but churn rate
was higher. Can be mitigated by CMS.
• Derived value in first few months through
optimising after which they left Hubspot.
Business to Consumer (B2C)
• These companies were sophisticated
Web 2.0 users and found Hubspot
content templates rudimentary.
• Already had high performing websites
and a strong social media presence.
• As the value derived by these customers
is comparatively less than other
segments, the churn rate for these
customers is highest.
 Addressing the problem of Churn from a pricing format
• Owner Ollie’s churn rate is higher as compared to Marketer Mary but start-up fee is the
same for both in current pricing strategy. As Owner Ollie’s are easier to acquire and
derive most of their value initially, they should be charged a higher up front fee. A higher
up front fee and lower ongoing fee will reduce their churn rates. Also, higher ongoing fee
can be charged to MM’s as their price sensitivity is low and their continuous engagement
is high.

• Profiling of customers should be done based on their expected lifetime with Hubspot and
customers with lower lifetime values should be charge higher upfront fee and
subscriptions for longer lock in periods at lower rates.

• Exhibit 8 shows that higher rate of churn takes place in the second year after customer
acquisition. Therefore, customers should be provided subscriptions of 2 years at
significantly lower rates. An increase in engagement with Hubspot resources might lead
to lower churn.

• Due to lack of targeting, the customer set is very diverse which leads to difficulty in
setting an optimal pricing strategy for every customer.

• Hubspot should cater to limited customer segments only as requirements in terms of

product features, customer service and pricing vary a lot. The saved effort can be
invested into further developing offerings for selected customer segments which will
reduce churn rates and allow Hubspot to charge higher premium for its offerings. CMS for
Owner Ollies is one such example.
Thank you