HubSpot 5C Analysis
5C Analysis
Company
HubSpot provides an inbound marketing system in the Web 2.0 space. As the business is fast growing, 329% of the yearly growth rate of new customers in 2008 (Exhibit 10), HubSpot wants to accelerate its growth. While HubSpot has a complete inbound marketing system and the supporting HubSpot Services Group which could be a strong base for its further growth, it also has some issues to be addressed. Even though the inbound marketing programs bring a diverse customer base that can be an opportunity, they also increase complexity of strategic planning, raising an issue for narrowing into a particular target. Moreover, there is a limitation to complement the marketing programs with outbound marketing because HubSpot would harm its own brand by doing so.
Context
The effectiveness of outbound marketing is diminishing. Web 2.0 tools and applications are generating new business at higher rates, giving many opportunities to the inbound marketing business. Especially, there is a huge market potential in small and medium-size businesses more than 13 times businesses than large ones (Table C). Additionally, given its lower costs and efficiencies, inbound marketing gives more benefit to small businesses in competing with large companies.
Customers
As of 2009, HubSpot has 1,000 customers in a diverse customer set. Two different types of customers exist, Owner Ollie and Marketer Mary accounting for 73% and 27% of the portfolio respectively. Even though Owner Ollie is easily acquired at the cost of $1,000, it leaves quickly after optimizing the value in the first few months. On the other hand, despite its higher acquisition cost of $5,000, Marketer Mary seems as a valuable segment in terms of its profitability, a longer customer life and a higher monthly fee of $500, compared to Ollie’s $250 with the same $500 consulting fee at start-up. However, considering the fact that CMS users have lower churn rates and Ollie is more likely to adopt CMS (13% of adoption
Company
HubSpot provides an inbound marketing system in the Web 2.0 space. As the business is fast growing, 329% of the yearly growth rate of new customers in 2008 (Exhibit 10), HubSpot wants to accelerate its growth. While HubSpot has a complete inbound marketing system and the supporting HubSpot Services Group which could be a strong base for its further growth, it also has some issues to be addressed. Even though the inbound marketing programs bring a diverse customer base that can be an opportunity, they also increase complexity of strategic planning, raising an issue for narrowing into a particular target. Moreover, there is a limitation to complement the marketing programs with outbound marketing because HubSpot would harm its own brand by doing so.
Context
The effectiveness of outbound marketing is diminishing. Web 2.0 tools and applications are generating new business at higher rates, giving many opportunities to the inbound marketing business. Especially, there is a huge market potential in small and medium-size businesses more than 13 times businesses than large ones (Table C). Additionally, given its lower costs and efficiencies, inbound marketing gives more benefit to small businesses in competing with large companies.
Customers
As of 2009, HubSpot has 1,000 customers in a diverse customer set. Two different types of customers exist, Owner Ollie and Marketer Mary accounting for 73% and 27% of the portfolio respectively. Even though Owner Ollie is easily acquired at the cost of $1,000, it leaves quickly after optimizing the value in the first few months. On the other hand, despite its higher acquisition cost of $5,000, Marketer Mary seems as a valuable segment in terms of its profitability, a longer customer life and a higher monthly fee of $500, compared to Ollie’s $250 with the same $500 consulting fee at start-up. However, considering the fact that CMS users have lower churn rates and Ollie is more likely to adopt CMS (13% of adoption