HubSpot and motion AI –Chat enabled

CRM case
 To understand how customer relationships are created, nurtured, and
built by firms through customer relationship management (CRM)
programs

 The effectiveness and efficiency trade-offs associated with replacing

human customer service representatives with AI chatbots

 To decipher the marketing and selling opportunities and challenges

associated with different phases of the customer funnel and to
understand how firms build, nurture, and support relationships through
CRM
 To develop best practices for chat-based CRM and to identify the
opportunities and pitfalls firms may encounter as they implement
chatbots

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 Take a look at  Hubspot's sales&marketing process and
discuss which activities /phases of  funnel  (ToFu, MoFu,
BoFu)  would Chatbots do better than Humans?
 How might customer behaviour change when they interact
with bots and how would it affect relationship management
and profitability?
 How might Hubspots’ acquisition of Motion AI affect its
relationship with its own customers?
 How would you assess the potential for chatbots for B2C and
B2B  customer relationship in general? Under what
conditions do Chatbots have most /least potential?
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 HubSpot has to attract 100 million website visitors to
generate 40,000 customers (or 2,500 website visitors to
generate 1 customer
 high number of visitors (96%) who are unwilling to reveal
personal information during the early stages of the buying
process
 (scoring below a 7-10 rating on lead qualification
measures)- lead qualification – 40 % qualifies high cost of a
salesperson ($120,000 per year) and the long purchase
journey (45 days)
 13.5 % of qualified leads get to a demo stage and of this
20% goes for sales closure
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Acquisition cost
Humans
 The cost of generating leads = $50
per lead * 100 leads = $5,000
The cost of a salesperson = $120,000
annual salary/12 months/5 customers
converted per month = $2,000
The cost of a human chat rep =
$60,000/12/5 customers converted
per month x 3 (representing 1
salesperson for every 3 chat reps) =
$3,000
Total Cost = $5,000 + $2,000 +
$3,000 = $10,000
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Using Chat bots
 The cost of generating leads = $50
per lead * 100 leads = $5,000
 The cost of a salesperson =
$120,000 annual salary/12
months/5 customers converted per
month = $2,000
 The cost of the chatbot = $0 (one-
time fixed cost)
 Total Cost = $5,000 + $2,000 + $0
= $7,000
 Savings from using chatbots
instead of humans = $3,000
 If the savings is reinvested to purchase more leads,
HubSpot can generate $3,000/$50 = 60 more leads to fill
the top of the funnel and those 60 leads can yield an
incremental 0.48 customers
 The incremental 0.48 customers from the new leads can
be added to the original 0.8 customers acquired with the
original leads to yield a total of 1.28 customers, a 28%
increase in customers

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Bots vs Humans -Relationships
 Humans are naturally relational and will
be more proficient than bots at navigating
the complex process of forming, nurturing,
and managing a customer relationship
 Customers might form different types of
relationships with bots (perhaps more
exchange-type relationships) than with
humans (perhaps more communal-type
relationships)
 Customers will feel freer to break
relational rules or test relational
boundaries with bots than they might with
humans, leading to increased costs-to-
serve.
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 Bots, given their unlimited ability to
digest and respond to reams of
information, might be better be able
to deal with the complexity of
relationship negotiation than human
chat reps
 Bots’ lack of inherent customer
“empathy” will help them negotiate
relationships that are more favorable
to firms as they prove resistant to
customers’ attempts to improve the
relationship in their own favor
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 Bots may more efficiently acquire  Customer Lifetime Value
customers, but humans may more
effectively retain them ??
= (profit per year * years
 Or, that bots might easily acquire
in lifetime) – customer
customers, but those customers acquisition cost
might generate lower profits per
year than those acquired by
humans, who have the ability to
better match solutions to their
particular problems and to upsell
and cross-sell them

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Chatbot opportunity for Hubspots
customers
 Will the firm disclose or keep hidden the fact that
consumers are interacting with a bot?
 Will the bot speak in a consistent, brand-consistent voice
or be flexible enough to mimic the voice of the customer?
 How human-like should the bot be? Will the bot be
programmed with a utility/functional user interface (UI) or
a conversational UI? Why?

 Transparency
 Voice flexibility
 UI and UX design
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Closing thoughts
 62% of consumes want chatbots to have a human-like
voice
 62% - have human-like intellect
 57% -to understand human emotions and respond to them
 55% -to have the ability to provide greater empathy
 54% - to exhibit human-like behavior and personality
(Survey by Capgemini)

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What matters
 Relational intelligence: The ability to interpret relational
signals to discern the type of relationship consumer desires
 Relationship negotiation prowess: Ability to navigate
interactions with the customer to continuously deliver and
strengthen desired relationship to provide mutual value
 A conversational UI: A robust and empathetic user-
interface that allows sensing and responding to relational
cues

 Read: Dawar, Niraj (2018) “Marketing in the Age of

Alexa,”HBR,2018

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How AI based platform provide value (Dawar, 2018)

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Customer Engagements &Brand
relationships
 Assessing Customer Engagement and brand relationship
 Customer Engagement in virtual brand community
Facebook and Other Social Network platforms
 Customer Engagement in offline brand community

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Customer Brand Value (CBV) Frame work
 Recall the discussions on CBBE frame work and measures
of Brand Equity

 Traditionally, the effect of the brand was measured through

the immediate change in sales after implementing a
marketing initiative
 However, since brand building seeks to influence customer
behavior in the long run, measuring the effect of a brand
through immediate changes in sales alone is not sufficient
 It is crucial to understand how a customer’s behavior and
attitude changes based on the brand value perceptions

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 Positive Brand attitude drives future purchase intention
and recommendation intention
 It is crucial to not only measure and interpret the financial
value generated by the brand for the customer but also to
consider the customer’s perception of the brand

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Which one would you invest in ?
 Brand A
 Brand B

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 (a) Brand A’s target
segment is 45- to 60-year-
old customers and (b)
Brand B’s target segment
is 18- to 30-year-old
customers  firms need to base their
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 (a) future size of the
segment and (b) future
spending power
decisions on a forward-
looking approach, how
does this approach result
in higher profitability for
the firm?
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CSK – Revenue Vs Brand Value
2019 –Revenue 2019- Brand Value CSK Market Valuation
(Speculative / Unlisted
share trading/Grey
market premium)
INR 356 Cr INR 732 Cr Around INR 1000 Cr

Income
Grant Central rights BCCI
– INR 240 cr
Brand CSK sponsorship
income – INR 68 Cr

Net profit –INR 50 cr

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Fan centric social strategy-Brand
community

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Fan Generated content

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https://venturebeat.com/2021/01/15/greenpark-sports-
launches-early-access-for-sports-and-esports-social-platform/

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Linking CLV To CBV
 Communication plays a vital role in linking CBV to CLV.
 Planned and unplanned marketing communications such
as word of mouth, product messages, marketing-mix
activities, corporate activities, and marketing initiatives all
constitute brand communication and contribute to
messaging

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Measured Brand Value –Example

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Step 4- Linking CLV TO CBV
 Examine Brand Knowledge of each customers and how it is transferred to Brand attitude
Build Awareness thru Trials
Build Trust thru’ Adverts

 How much brand attitude is transferred to purchase?

 Trust thru trails
 Brand affect thru adverts

 Purchase intention to Loyalty

 Intention thru Promotion

 Brand behavior to CLV

 Loyalty Programmes
 Advocacy and referrals
 Adverts
 Optimize CBV and CLV

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 Step -6-Implementing Strategies -segmentation

High
CLV

Low
CLV

Low CBV High CBV

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