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Inbound Marketing

Satisfactory Essays

uHubSpot: Inbound Marketing and Web 2.0
By Ashna Bali

1) According to HubSpot, the rules of marketing have changed in the sense of the way that businesses approach or reach out to their customers. HubSpot believes in tapping into technology and Internet for marketing businesses and products by using Web 2.0 tools and methods such as blogging software, social media and search engine optimization.
The CEO of HubSpot, Brian Halligan, believes that the traditional “outward” methods of marketing are seen by potential customers as an interruption in their lives (For example, advertisements on TV while watching your favorite show) and society is getting better at blocking out such interruptions. Therefore, the impact of such marketing is …show more content…

However, the Small Business Owners have a higher churn rate and derive much of their value from HubSpot in the first few months as a customer and tend to cancel their subscription after that. Therefore, they are not long-term customers for HubSpot.

CLV Calculation | OO | MM | B2B | B2C | Churn rate | 4.3% | 3.2% | 3.3% | 6% | Consumer lifetime in months | 23.26 | 31.25 | 30.3 | 16.67 | Acquisition Cost | 1000 | 5000 | - | - | Monthly profit | $250 | $500 | | | Customer lifetime value | $4815 | $10625 | | |

After calculating the CLV we can clearly see that the value of the Marketing Professional Customer ($10625) is more than double that of the Small Business Owner customer ($4815) and therefore HubSpot should prioritize their marketing efforts towards the marketing professionals. Even though the acquisition cost of the Marketing Professional customer is pretty high, their churn rate is quite low and their Customer Lifetime Value (CLV) is very high which makes them more valuable in the end.
Also B2B customers derive more value from Inbound marketing as compared to B2C customers. Also, they have a lower churn rate.
So, HubSpot should definitely use more resources towards and pay more attention to B2B and MM customers .

3) Yes, according to me HubSpot should continue to practice what they preach and engage in inbound marketing alone. How can they

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