Publications
Publications
- June 2016
- HBS Case Collection
HubSpot: Lower Churn through Greater CHI
By: Jill Avery, Asis Martinez Jerez and Thomas Steenburgh
Abstract
HubSpot, a web marketing startup selling inbound marketing software to small- and medium-sized businesses, is under pressure from its venture capital partners to rapidly acquire new customers and to maintain a low level of customer churn. The B2B SaaS company is in the midst of pursuing a Series C round of funding. To do so requires them to bring their business metrics into line with VC expectations and peer companies’ performance. In the case, students use big data about their customers’ demographics and usage behaviors to explore the drivers of customer churn and uncover opportunities to increase customer retention via the customer selection, selling, and training processes. Students assess an algorithm that yields a metric, CHI (Customer Happiness Index), that HubSpot uses to predict which of its customers will churn and suggest alternatives to improve the firm’s predictions. Students develop action plans to reduce churn post-hoc and then reengineer the company’s marketing, selling, and customer relationship management processes to preempt churn proactively through market segmentation and targeting, product design, and customer interactions. Decisions are critical at this stage of HubSpot’s development, as its continued growth hangs in the balance.
Keywords
CRM; Customer Acquisition; Customer Retention; Churn Management; SaaS Business Models; Customer Lifetime Value; Venture Capital; Startup; Software; Monitoring And Control; Marketing; Customer Relationship Management; Marketing Strategy; Accounting; Technology Industry; United States
Citation
Avery, Jill, Asis Martinez Jerez, and Thomas Steenburgh. "HubSpot: Lower Churn through Greater CHI." Harvard Business School Teaching Note 116-051, June 2016.