Hootsuite Harvard Case Solution & Analysis

Company description

Hootsuite a Vancouver-based company started operating in 2008 with an aim to provide social media dashboards to its consumers by launching version one of the Hootsuite. The initial offers were free for consumers, and the company took no long to choose to operate as a separate company. By the end of September 2012, the user base of the company was estimated to be 4.5 million out of which only 4% were paid users while the rest of the 96% were using the dashboards for free. Hootsuite was providing many additional services to its users, and the team was managing every account. Besides this, the company using their social analytical techniques aimed at providing users services with integrated services.

Services offered by the company included enterprise-class functionality, Intuitive user interfaces, tweet management tools, notification tools, a Twitter search function, integration with other social networks and other mobile application and analytical tools. The other main tasks in which the company was involved included spreading messages, monitoring the conversation and tracking the results of various activities.

Issues

The company wants to adapt a strategy to monetize its user base without hurting or affecting its growth. Since the company is specialized in providing SaaS social media dashboards and growing rapidly, so the company is seeking a strategy that can help the company to optimize its user base regarding segmentation along with monetization. Besides the issue of selecting the best possible strategy for monetization, the company also wants to adapt a pricing strategy to generate revenues as well.

Market Overview

In the recent years social media has witnessed a significant growth and sites like Facebook, Twitter, YouTube, tumbler, etc. have emerged as prominent names for social networking. These sites have been growing rapidly and eyeing to reach heights financially as well with Facebook aiming towards an IPO and twitter expecting to invest $800 million in new ventures recently. With this growth, the need of social media tools has also been increasing. With the help of these social media tools, companies have been able to manage different accounts separately and dedicate more time in managing those accounts. These accounts can be managed using a single control panel and most importantly, social media enable consumers to develop coordination among themselves using these tools.

Business Model

The users either enjoy the dashboards for free or pay for using pro-paid and enterprise paid method. Besides this the company has also partnered with Facebook preferred developer, Linkedin certified developer program charter member, google+ development partner and Twitter promoted product partners. On the other hand, the company has online advertisers and mobile advertisers as their advertising partners. Furthermore, the funding of the company was supported by Blumberg capital, Hearst interactive media, social concepts and millennium technology ventures.

Market Segmentation

The consumers are segmented on the basis of language and level of activity. The consumers of the company are transformed into prosumers, and the company has managed to keep good relationships.

As mentioned above only 4% of its users are paid ones. Therefore, the company is seeking to monetize its non-paid users considering the factor of customer retention as well. On the other hand the company is facing a 20:80 ratio, which means that the 20% of users generate 80% of the revenue for the company.

Marketing Strategy

The company is seeking growth in order to differentiate itself from competitors. The company’s marketing strategy or marketing plan has highly targeted promotions through word of mouth and brand ambassadors, and no extensive advertising campaigns have been adapted by the company yet. Furthermore, the company is not using traditional media as a medium to deliver the message of the company and nothing related to traditional advertising is included as part of the company’s marketing strategy. The only strategy company has adapted is the use of media releases that is followed every month with six media releases. Besides that the company is not favoring or opting for a traditional approach of advertising.

Analysis

Situation analysis

The company is planning to grow on its consumer base which is currently 650,000. With the company seeking growth, the challenge for the company is developing methods of generating revenue while keeping the focus on retaining the consumer base. Since the company has only 4% paid users, and 96% are enjoying the services for free which is why the company is planning to convert them into paid users without losing them....................

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