Scribd
Upload
459 views

HubSpot Case Study Analysis

HubSpot is considering whether to target small business owners (Ollies) or marketing professionals (Marys) as customers. While Ollies are cheaper to acquire, they have lower lifetime value and higher churn rates. Marys are more expensive to acquire initially but have higher lifetime value due to repeated usage and lower churn. Based on the details provided, HubSpot should focus on Marys as they contribute more to long-term growth through higher retention and ROI. HubSpot is also considering a software-as-a-service (SaaS) or software-as-a-product (SaaP) pricing model. SaaS lowers barriers to entry and allows for easier adoption and updates to meet changing online

Uploaded by

Jerome Wong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
459 views

HubSpot Case Study Analysis

HubSpot is considering whether to target small business owners (Ollies) or marketing professionals (Marys) as customers. While Ollies are cheaper to acquire, they have lower lifetime value and higher churn rates. Marys are more expensive to acquire initially but have higher lifetime value due to repeated usage and lower churn. Based on the details provided, HubSpot should focus on Marys as they contribute more to long-term growth through higher retention and ROI. HubSpot is also considering a software-as-a-service (SaaS) or software-as-a-product (SaaP) pricing model. SaaS lowers barriers to entry and allows for easier adoption and updates to meet changing online

Uploaded by

Jerome Wong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Jerome Wong Zhen Hao, A0154448Y.

MT5012 HubSpot Case Study Submission

Which is the right segment for Hubspot to target? Why?

The case for Owner Ollies (Small Business Owners)

 Ollies costs less than $1000 to acquire


 Smaller lifetime value
 Higher churn rate
 Usually Ollies are the key decision makers
 Bigger volume business

Ollies are easier to acquire often because they are the decision makers themselves and do not
need to seek approval from management. This allows Hubspot to onboard more Ollies
compared to Marys due lower friction in decision making

However, Ollies also have a much higher churn rate compared to Marys (Figure 1). They're
more focused on SEO optimization of their websites and are able to derive value through
their first few month of using the platform. Once they have done so, Ollies would cancel their
HubSpot Subscription

The case for Marketer Mary (Marketing Profesionals)

 Marys cost about $5000 to acquire


 Higher lifetime value
 Lower churn rate
 Considered purchase and require justification to higher management
 Smaller market

Marys are able to consistently get ~50% new customer acquisition (Figure 1) compared to
Ollies through HubSpot and are able to get a higher ROI of investment through using the
platform

Even though they are a harder customer to acquire compared to Ollies, they derive value
through repeated usage of the platform, especially so in the monthly analytics and reporting
features. This translates to a lower churn rate (Figure 2) and more leads

Conclusion

Despite identifying the two distinct customer segments, there are not enough data to
accurately determine whether one is better than the other. Other parameters like cancellation
rate, upgrade numbers, referral rate and customer satisfaction measure such as net promoter
scores, as well as the budget allocated to the two segments need to be considered in order to
make a better judgement

Based on the details given, I would recommend HubSpot to focus on Marys. Strong retention
rate, as indicated by low churn rate and higher ROI in using the platforms, over time is a
good indicator of product-market fit. They contribute to a higher lifetime value and brings
about opportunities to generate brand loyalty, stickiness and referrals.
Jerome Wong Zhen Hao, A0154448Y. MT5012 HubSpot Case Study Submission

Whereas rapid user growth followed by rapid user attrition is an indicator of unsustainable
growth. By spending more to to acquire Ollies than retain Marys, lifetime value of this
customer segment becomes limited and this hurts top line growth

Which pricing model - Software-as-a-Service (SaaS) or Software-as-a-Product (SaaP) is


more suitable for Hubspot?

The case for SaaP

 One time fee


 Higher barrier of entry for users due to higher cost
 Can be used offline
 No/Little Maintenance/Customer support
 No software updates or bought separately

SaaP allows users to own the piece of software instead of passing the ownership and
responsibility to the company providing the software. This allows for better protection and
privacy of data as companies can host it on their own servers instead of the one provided by
the software. This is more prominent in government or highly regulated fields such as
defence or medicine.

The case for SaaS

 Recurring fee
 Lower barrier of entry for users due to
 Maintenance/Customer support usually provided
 Software updated regularly

SaaS lowers the barrier of entry and allows for more onboarding of users as usage of the
software becomes less of a considered purchase and more of an impulse purchase. Users can
use the software for a trial period and choose to cancel if they do not find value in it. SaaS as
a pricing model allow companies to reach a broader audience who place less emphasis on
data and privacy concerns.

Conclusion

HubSpot should use SaaS model primarily because it is a business model that is future proof.
Inbound marketing is an increasingly competitive space(Figure 3) and competitors are
looking to iterate and push features out to meet the changing demands of the social media and
online marketing space. With each new change in the Search Engine algorithm or
introduction of a new social media platform, HubSpot will need to optimize and introduce
new software updates to align to new best practices and technologies that gets introduced
rapidly into this space
Jerome Wong Zhen Hao, A0154448Y. MT5012 HubSpot Case Study Submission

Appendix

Figure 1: HubSpot's New Customer Acquisitions

Figure 2: Average Churn Rate between Business Type vs Business Size


Jerome Wong Zhen Hao, A0154448Y. MT5012 HubSpot Case Study Submission

Figure 3: HubSpot’s Competitive Field

You might also like