HubSpot is currently at a crossroads with management looking for rapid acceleration of sales and profits. In their quest for growth, Halligan and Shah face significant challenges that are associated with the inbound marketing model. To meet these challenges, Halligan and Shah have enlisted you to help them determine how to move forward.
For your recommendation, follow the guidelines for the individual case assignments (i.e., one page memo plus exhibits), and be sure to answer the following three questions.
1. Do you agree with HubSpot that the "rules of marketing" have changed in the age of Web 2.0 technologies such as social networking, blogging and Twitter? Why or why not?
2. What customer segment(s) do you suggest HubSpot to focus on? Should it serve any customer that comes its way, or narrow the target to either Owner Ollies or Marketer Marys? In parallel, should it focus on B2B or B2C customers? (hint: in addition to any qualitative analysis, consider conducting Customer Lifetime Value analysis on the segments)
3. Does Hubspot have the right approach to serving the target market? What do you recommend them to do in product, pricing and promotion strategies?
The basic formula for calculating CLV to be used is:
CLV = [Monthly profits] * [Customer Lifetime in Months] - [Acquisition Cost]
Recall that Customer Lifetime in Months = 1/Churn Rate
Recall that churn rate is the opposite of retention rate (i.e. the customers lost as opposed to the customers retained)