Businessmodel of Hootsuite

Customer Segments

Hootsuite has a segmented business model, with customers who have slightly different needs. It serves the following groups:

• Individual Professionals: The company offers the “Pro” service for owners, entrepreneurs, and consultants.
• Small Businesses: The company offers the “Business” service for small firms and agencies.
• Large Organizations: The company offers “HootSuite Enterprise” for large brands and agencies who have multiple departments/teams/regions. ### Value Proposition

Hootsuite offers two primary value propositions: convenience and brand/status.

The company offers a number of features that increase convenience. It simplifies the process of social media management by enabling customers to organize their various platforms in a single interface. It supports the following social networks: Facebook, Twitter, LinkedIn, Google+, Foursquare, and Wordpress. Hootsuite also allows users to set up auto-updates so that networks can consistently publish content. Further, the solution provides real-time analytics for campaigns.

The company has built a strong brand as a result of its fast growth and prominent customer base. It now serves more than 10 million customers ranging from freelancers to more than 75% of the Fortune 1000. It has two million app installs from 150+ apps. It provides data from 100 million sources and 26 platforms. It is used in every country worldwide and is available in 16 languages. Hootsuite bills itself as the “most widely-used platform” for social media management.

Channels

Hootsuite’s main channel is its website, through which it markets its offerings. The company also promotes its solutions through webinars, free social media training classes (six are taught), and attendance at various annual events such as conferences.

Customer Relationships

Hootsuite’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform without interaction with employees. That said, there is a personal assistance component in the form of an e-mail form and the training classes it offers.

Key Activities

Hootsuite’s business model entails maintaining and updating its platform for its individual and business users. Its platform includes its dashboard and mobile app.

Key Partners

Hootsuite has four types of partners, to whom it provides training, marketing tools, and/or reselling opportunities. They are as follows:

• Agency Partners: The company partners with agencies to help them manage their clients’ platforms.
• Solution Partners: The company partners with firms who have customers seeking solutions for social marketing, social selling, social customer service, etc.
• Platform Partners: The company partners with developers planning to integrate their solutions into Hootsuite or build an app that expands its functionality.
• Affiliate Partners: The company works with organizations who promote its solution on their platforms and then earn a commission for any referrals that purchase a paid Hootsuite account. ### Key Resources

Hootsuite’s main resource is its proprietary software platform, which now has more than 10 million users. It also depends on its human resources in the form of its engineering and customer service staff.

Finally, as a relatively new start-up it has relied heavily on funding from investors, raising $246.9 million in four rounds of funding from 11 investors.

Cost Structure

Hootsuite has a cost-driven structure, aiming to minimize expenses through extensive automation and low-price value propositions.

Its biggest cost driver is likely sales and marketing expenses. Other major drivers are in the areas of customer support/operations and product development.

Revenue Streams

Hootsuite has two revenue streams, which are as follows:

Platform Usage: The company utilizes a freemium model in which it offers a basic level of service for free and then charges for more advanced features. The advanced feature plans align with the aforementioned customer segments, as follows:

• Pro: Costs $9.99 per month, billed annually. Plan includes up to 50 social profiles, one enhanced analytics report, bulk message scheduling, and access to premium apps.
• Business: Pricing varies; sales staff must be contacted for specifics. Plan includes all Pro features, as well as real-time analytics, publishing approvals, six social campaign templates, social media certification, a vanity URL, 24/7 priority support, and customer set-up and training.

• Enterprise: Pricing varies; sales staff must be contacted for specifics. Plan includes all Pro features, scaled up for larger organizations. Training Classes: The company provides the following options:

• Online Hootsuite Dashboard Training: This involves on-demand certification and training on the Hootsuite dashboard for team members and admins; it costs $21 per month
• Social Media Marketing Certification: This involves instruction that will lead to certification, geared largely towards social media managers; it costs $199
• Advanced Social Media Strategy Certification: This involves instruction that will lead to academic credentials from the Newhouse School at Syracuse University, targeted at managers with industry experience; it costs $2,200