Founders Brian Halligan and Dharmesh Shah of upstart inbound-marketing firm HubSpot have come to a crossroads in their business model. In order to continue on the path of growing as big as possible and as quickly as possible, the direction of the company must adapt. To achieve the company’s goals of growth acceleration and maximum profit, HubSpot realizes they need to overcome several challenges inbound marketing presents.
Currently, HubSpot is operating as a more diluted company, lacking a niche market focus. As a result, HubSpot found itself attracting a diverse set of customers which makes strategic planning difficult. The needs of its diverse customer base are different and it cannot possibly cater to all these needs effectively. Having
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a mix of customers adds layers of complexity and cost to the sales and customer service areas of HubSpot as well as being challenging in terms of prioritizing potential software updates. The company should narrow its scope even at the cost of reducing some its customers. This would help HubSpot in cutting costs and meeting the needs of their customers more efficiently. Therefore, it would be in the best interest for HubSpot to cease efforts of being all things to everybody and concentrate its focus to one type of customer.
Ideally, the target audience should be early adopters, heavy users and acquired at low costs (Kotler and Keller, 2016). When focusing on a specific target market, single out the group of consumers who are prepared to purchase goods and services in order to yield bigger returns (“Benefits of Identifying a Target Market”, n.d.). It is recommended that HubSpot define the customer group which presents the best opportunity for growth and prioritize the needs of that group. According to Kotler and Keller (2016), a firm can achieve a strong market presence through concentrated marketing. With that being said, It is further recommended that HubSpot place more emphasis in increasing the percentage and retention of the Owner Ollies in its customer portfolio. Although the churn rate is higher for the Owner Ollies, they consist of 73% of HubSpot’s client base opposed to Marketer Marys 27%. Their demand is fairly simple and it is these firms which have more use for HubSpot’s products and services, are more easily convinced to make early commitments as well as the market able to produce positive cash flows faster. To further reduce the churn rate of the Owner Ollie …show more content…
businesses, it would be in HubSpot’s the best interest to push their web-based software product, content management service (CMS), to new customers. Considering the percentage of Owner Ollies in HubSpot’s customer base and the fact the user-friendly product allows those who are not familiar with the Web 2.0 build and manage a thriving inbound marketing program, only 13% of the small businesses are hosting their website with HubSpot. Thus, promoting the use of this service will put HubSpot in the position to experience maximum growth rate and increased profitability. At the same time, creating the opportunity the organic search results of small businesses will improve, thus creating more traffic and attracting more prospective customers to the top part of the customer funnel. Yes, Owner Ollies presents some concerns and challenges for HubSpot, but with the right informational content persuading these customers and increased use of HubSpot’s content management system, the churn rates will decrease and profits generated through these businesses can be maximized. HubSpot is currently utilizing the software-as-a- service (SaaS) monthly pricing model and questions its effectiveness. Once a reliable stream of income for HubSpot, the patterns in customer churn rates are showing some customers are obtaining the initial burst of value from the software, then cancelling after several months. Therefore, HubSpot needs a pricing strategy that reduces churn rate and increase retention, caters to the needs of their target audience as well as allow HubSpot to obtain maximum profit from customers. The pricing structure has the potential to evolve in different ways. HubSpot could begin selling subscriptions for longer intervals beyond month to month to lock in customers for longer periods of times. This is a particular beneficial strategy for keeping the Owner Ollies from cancelling services immediately after receiving the majority of added value. The other alternative consists of increasing the initial fee of $500 for Owner Ollies who reap the majority of the benefits upfront. A discount to this proposed increase could be coupled with participation with the CMS service, thus increasing the probability the small businesses stay with the company longer. It is recommended that HubSpot use the perceived-value pricing strategy to increase the onboarding fee as well as the monthly fee with an option of “locking in” prices for a six-month promotional period. During this promotional period, clients would be charged a $200 monthly fee as well as given a “free” service hour to HubSpot. Thereafter, they would have the option of renewing a yearly subscription for $250/month, 6-month subscription for $275/month and of course a month-to-month for $300/month. Initially requiring longer intervals of time between subscriptions, prevents the Owner Ollies from cancelling services after enough leads had been generated for their businesses. Using this pricing strategy, companies, according to our textbook (2016, p. 477), “must deliver the value promised”. HubSpot uses perceived value to justify onboarding price increases. The change in pricing provides greater upfront opportunities for HubSpot to recoup the cost of acquisition more quickly while providing the clients incentives to maintain their subscriptions with HubSpot for longer periods of time. The increase in revenue generated should be able to provide HubSpot the opportunity to expand in the ways that are consistent with its values and potential position and earning power in the marketplace. The rules of marketing have changed and the internet and social media plays a very important role in helping us choose the products and services we consume.
Today’s consumers are turning to the web for information about companies and products before buying (Nagel, 2015), which is a prime example of how important inbound marketing is for a firm. According to Nagel (2015) inbound marketing improves business growth by attracting consumers to your product or service using content that serves a purpose. In addition, it is cheaper and more accessible to small companies; therefore, becoming the more preferred marketing strategy. Inbound marketing is an ingenious method of marketing which generates measurable results and makes optimum use of financial resources. However, one key issue that hampers HubSpot’s current marketing strategy is that since they pull customers to them, it becomes difficult to determine which strategy to implement before knowing what segment of customers are attracted to them. In contrast, the importance of outbound marketing should not be underestimated. It has a huge advantage over inbound marketing in that strategies are formulated and implemented after deciding the target audience. In addition, some products and services, for example the food/beverage and automobile industries, cannot possibly target the required audience through inbound marketing. Inbound marketing has not captured market potential and has lost a lot of potential revenue that outbound
marketing can bring in. Furthermore, 0utbound marketing can help HubSpot get more potential revenue and increase its market share. It will obviously aid in rapid growth. Recommendations are for HubSpot to strike a balance and provide a mix of inbound and outbound marketing to achieve maximum benefits for themselves and their customers.
Besides marketing its customer service, the company markets different programs according to its three major types of customers. Some of them being,
It has also established a distinguishable name among its competitors with a reputation for leading customer service. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand into new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. These alternatives are meant to act as strategic guidance to the company in order to enhance growth.
Once the target market has been identified it is important to develop a marketing strategy. In today's fast paced, information overloaded society; conveying a message about a product seems to be more difficult than ever. The consumer is bombarded with advertising everywhere they look. Today advertising not only exists on television, radio, magazines, and newspapers, it can be found on billboards, park benches, in our mailboxes, on buses, taxis, at sporting events, and on clothing.
In this assignment, I will cover who the core customers are of Bolt bus, how Bolt bus uses its knowledge to decide their marketing procedures based on their core customers. I will also include the type of product advertising that this company does to promote business, and indicate whether, or not it uses consumer sales promotion(s), if so what is it that they use.
In the beginning, we choose the Workhorse to become our first target market, and the Traveler has been our second target market. However, we didn’t get a successful sale at the beginning since our brand does not meet the needs of Workhorse and we had a very poor rating of our advertising for our target market even though we have a cheapest price in market. After a few quarters, we try to modify our brand and we find the Traveler may has high demand of our brand since we design a new brand for them, so we change the Traveler to be the first target market and the Workhorse move to second.
The SWOT analysis (abbreviation for Strengths, Weaknesses, Opportunities and Threats) is an essential tool in marketing for understanding and supporting decision-making in all kinds of situations in business and organisations. In brief, it provides an accurate context for studying strategies, positions and directions of a company proposition. It is used mainly for business planning, competitor evaluation, marketing, business and product development and research reports. SWOT analysis is also a widely recognised method for gathering, structuring, presenting and reviewing extensive planning data within a larger business or project planning process. (Chapman, 2014)
Marketing is a process of determining a consumer’s needs, devising a product or service to satisfy those needs, and trying to focus customers on the goods and services you are offering. Marketing is extremely important, and a fundamental building block for business growth. A marketing team is given the task of creating customer awareness through a variety of different marketing techniques. If a business does not pay close attention to their consumer demographic and needs, they will eventually fail over time. Two important aspects of marketing include acquiring new customers, and the preservation and growth of relationships with current customers. Marketing has always been viewed as a creative outlet, which encompassed advertising, distribution, and the selling of goods and services. Marketing staff will also try to anticipate what customers will want in the future, often being accomplished with market research. In summation, a good marketing plan should be able to create a favorable proposition or series of benefits that a customer can value through goods or services. The marketing mix is normally described as the strategic positioning of a product or service in the marketplace, using the specification of the four Ps. During the early 1960’s, Professor E. Jerome McCarthy of Harvard Business School stated that a marketing mix contains four elements. The four key points are product, pricing, promotion, and placement. It is recognized that all these aspects must be present to ensure a successful business model within a given industry. We will now take a thorough look at the four marketing mix points.
Halligan and Shah are not too stubborn at all by not doing any outbound marketing. They have been preaching inbound market and it is their identity as a company. Moreover, the mission and vision stated that, “HubSpot was founded in 2006 as a result of a simple observation: people have transformed how they live, work, shop, and buy, but businesses have not adapted. This mismatch led Brian Halligan and Dharmesh Shah to create the vision for the inbound experience and to develop HubSpot’s platform to support it. With our powerful, easy to use, integrated set of applications, businesses can attract, engage, and delight customers by delivering inbound experiences that are relevant, helpful, and personalized. HubSpot is, after all, on a mission to make the world more inbound, one business transformation after another.”(Web) Inbound marketing is getting customer’s attention without interrupting their path. One of the most important parts of this method is lower average acquisition cost for new customer, which will attract them organically. Second, inbound marketing efforts have much lower cost per lead. However, the downside of this method is limited capacity toward its customers because HubSpot will only reach to those who are opted to see the message of the company. On the other hand, outbound marketing is interrupting the customer’s path in order to get attention for the business. HubSpot should continue and focus on improving their inbound marketing method because it is
This model consists nine components in total including customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure in a conceptual priority order (Osterwalder 2012) which are belong to four main areas comprising of offerings, customers, infrastructure and financials (Rytkonen & Nenonen 2014). Although both nine are important, this essay will only concentrate to three key characteristics which are customer segments, value propositions and
In early 1999, Ford announced an integrated e-commerce strategy, with the objective of creating an interface among customers, dealers, vendors and even competitors. The SWOT analysis was studied for the development the strategy, as well as the chances of success of such strategy. With Ford's desire to shift from dealer-centric' selling to consumer-centric' selling, we looked at the typical characteristics of online customers and how dealers could reinvent themselves to remain relevant in the changing automotive industry. The quest of Ford's goal to become the world's leading consumer company that provides automotive products and services has compelled Ford into integrated e-commerce strategy in connecting with consumers through multiple touchpoints namely those Ford's automotive-related services. (ie. Hertz, Ford Credit and Kwik Fit) Ford has also reviewed her competitive advantage against her challengers to remain on course of her vision: "To become the world's leading consumer company for automotive products and services".
Pine, B.J., Peppers, D. & Rogers, M. (1995). Do you want to keep your customers?. Harvard Bussiness Review. March-April. pp. 103-104.
To help these businesses, a more appropriate or better marketing plan needs to be designed. Small business internet marketing services can help businesses develop and thrive in a highly competitive market. For the highest quality internet marketing services, hiring an online marketing company to design a customized internet marketing campaign may be advantageous for some businesses (EStartup business blog and contributors, 2010). Identifying the role that marketing plays in a successful business is demonstrated by the use of two examples, the importance of developing a marketing plan, and ethical and legal issues that surround marketing practices (EStartup business blog, 2010). To be a successful business, the owner of the business should use the marketing mix and the results of market research; having identified its key audience a company has to ensure a marketing mix is created that is targeted specifically to those people.
The internet is the biggest digital networking tool. The internet offers a number of platforms for digital marketing. Many electronic communication tools offer access to the internet. Personal computers, mobile phones, smart phones, tablets, and various other electronic products offer access to the internet. Over the internet, platforms such as websites, emails, applications (classic and mobile) and social networks are essential for marketing (Hutley,...
Internet threw open the plethora of opportunities for enormous scaling of business, thanks to the massive scope of expanding as well as popularizing the business by way of online advertisement. Now, every kind of business no matter big or small businesses can expand itself by way of online advertising where there are massive users across the whole world.
In this report, we adopt SWOT analysis to determine the strategic fit between the company’s internal, distinctive capabilities and external threats in the current market. Recommendations were provided in the later part of the report on the possible approach to tap on external market opportunity and our suggestion to resolve current issues faced by the company.