Which customers should HubSpot target: Owner Ollies or Marketer Marys? Or perhaps only a portion of one of the segments? Give the positives-and-negatives of your choice. I personally believe that Hubspot should target Owner Ollies. Owner Allies are already a major segment of their business. With 73% of the customers belonging to this category, they have a sound understanding of selling to this segment. It takes them less money to attract customers in this segment and the selling time is much faster. It also takes a smaller time period to recover the costs invested in acquiring these customers. The needs of the OO market segment was also fairly easy to service. Owner Ollies is a bigger market segment with huge potential to service with the existing solution whereas Marketer marys’s market needs to be developed further with a comprehensive solution. Within the market, Hubspot should target the B2B segment as the churn rate in this segment is lesser compared to the B2C segment.
Easier to sell, Lower sales complexity
Higher Churn rates as compared to MMs.
Lower cost to acquire
B2B needed more help, as not well worse in marketing strategies
Average churn rate of B2B is 8.7% as compared to B2C’s 11.9% MMs pay more money for monthly usage
Not established businesses, could go out of businesses in a recession Well-funded and had the money to pay Hubspot’s products.
Lower customer loyalty, as the needs of the customer is satisfied in a few months and then they discontinue the service. Missing out on opportunity to develop more sophisticated tools that will help expand the business in the long run.
Higher Support costs
MMs are likely to use inbound marketing products often.
Does HubSpot have the right set of products for the target customers you selected? If not, what product changes and/or enhancements should they make? Yes, Hubspot has the right set of products for the Owner Ollie market segment. Currently, Owner Ollie consists of 73% of hubspot’s market and this signifies a good deal about the product offering’s meeting customer needs. Hubspot offers content design solutions that makes creating and editing online content easy. It has predefined templates and can be used non-tech savvy users. SEO is important to this customer segment and Hubspot has a Link grader analyzer product that satisfies this need. Hubspot software has marketing intelligence analytics for tracking the interactions with the firm’s content and enabled firms to analyze which of the inbound marketing programs were working to generate quality Leads.
The key business need of this customer segment is a quick simple solution to generate more leads and convert those leads into sales. Hubspot can focus a little more on their Lead Grader and Lead Visit Alert solutions to enhance the impact on this customer segment and try and retain customers over time. Overall I believe, Hubspot, Offers a competitively priced product that is easy to use as well as does not require substantial technical expertise to use. Hence meeting the needs of the targeted customer segment.
1,676,130 *3K/year = 5.03B
612,938 *6K/year = 3.68B
Customer Lifetime value – monthly profit *lifetime – acquisition cost
OO CLV= 250*23-1,000 = 4750
MM CLV = 500*31-5,000 = 10,500
Profit potential of segment = # of cutoemrs in segment * probability of attracting them * average retention time * profit potential per customer