Should Hubspot Target B2b or B2c Companies?

Kenan-Flagler Business School        NAME

Marketing 741        SECTION 8am/9:30am/11am/2pm

Executive Summary

State your recommendation. Should HubSpot target B2B or B2C companies? Owner Ollies or Marketer Marys? Keep this brief.

• The rest of your write-up should provide arguments to support your recommendation.
• The figures and tables should be used as references to support your arguments.

I believe that HubSpot should only target the sub-segment B2B in Owner Ollies. My recommendation is based on the fact that the potential market value for this segments is the highest amongst all other segments in the matrix. Also, the unique offering that HubSpot provides is best served for the requirements of this customer segment.

Target Market Selection

Should HubSpot cast a wide net or narrow their focus? Effectively argue that HubSpot should narrow their focus using frameworks we have discussed, as well as points from the case.

They should narrow down their focus and target only one segment of customers. Since the company has certain unique offerings compared to its customers, it should position itself in such a way so that it can provide maximum value to the customer segment it targets. The customer lifetime value, retention rate and the potential market value is quite different for different segments so it makes sense to select the segment which results in higher values for these parameters. Also we should root out segments which may require very different and sometimes traditional outbound advertising and promotions to improve lead generation and conversion of opportunities

Should HubSpot target B2B or B2C customers?

They should specifically target the B2B customers. Reasons being:

1. The CLV of this segment is higher, the market potential is highest and the acquisition cost low. The customer retention rate and in turn their loyalty can be improved though high can be improved further by attracting the customers to use the CMS service
2. Marketing budget dedicated for inbound marketing in the case of B2B customers has improved substantially so there is a huge market and scope which can be exploited by HubSpot.
3. The fact that HubSpot provides consulting services comes as a unique offering for B2B customers as they do not get such services from any other agencies.
4. Inbound marketing is actually more beneficial to B2B customers based on the kind of customers they have and the product they sell. Since HubSpot specializes in such offering, it makes sense for HubSpot to focus on B2B customers.
5. The B2C customers are already experienced adopters of the inbound marketing technique. They only require high level, complex applications and analytical tools which could improve the benefits that they are already reaping. Their requirement is conflicted with the product offerings that HubSpot offered.
6. The churn rate is much higher in the B2C segment compared to the B2B segment especially in the case of small businesses segment.

Should HubSpot target Owner Ollies or Market Marys?

I believe they should focus on Owner Ollies because of the following reasons:

1. HubSpot’s low cost and ease of use for Web 2.0 novices are its competitive advantages. The fact that OO is looking for quick and simple solutions gel well with the positioning of HubSpot’s products and create a unique value compared to the competitor’s offerings
2. Though the CLV of MM is much higher than OO but the total potential market value and retention rate and the acquisition cost for OO is way higher than MM
3. OO has requirements in all 3 segments of the customer funnel cycle, while MM is more concerned with only certain aspects of the offerings at HubSpot. Targeting MM would lead HubSpot to a situation where it would not be able to utilize all its product offerings efficiently. Also HubSpot has a unique offering which replenished the needs and requirements of all 3 segments of the funnel cycle. None of the competitors offer that.
4. Also the potential benefit for HubSpot in the future is to move its customers to its own CMS. As per the data provided, we can reasonably assume that OO are more inclined than MM to select CM

Should HubSpot start using traditional “outbound” marketing techniques? Keep this brief.

Limited and subtle outbound techniques like online advertising can actually be applied. They can also target advertising events like trade shows which have the presence of B2B companies. This could help attract visitors and prospects. But they should never adopt the traditional outbound techniques like cold calling as they will end up diluting their own brand.