Businessmodel of Squarespace

Customer Segments

Squarespace has a mass market business model, with no significant differentiation between customers. The company targets its offering at anyone who wants to build a website, from regular consumers to artists to entrepreneurs and beyond.

Value Proposition

Squarespace offers four primary value propositions: cost reduction, convenience, customization, and brand/status.

The company reduces costs through various features. First-time users are allowed a free trial. Annual subscription accounts receive a free custom domain for a year. Students receive a 50% discount on their first year of use. Lastly, customers can stop their service at any time with no fee charged.

The company creates convenience in multiple ways:

• Its reliable cloud infrastructure means users do not have to install, patch, or upgrade
• Creating websites is simple and intuitive, only requiring the click of a mouse to arrange content
• Retailers can design a quality online storefront without a single plug-in
• Site owners can see visitor traffic and behavior in real-time The company offers customization by providing hundreds of customizable style settings, including colors, fonts, and page layouts. Further, each design has personalizable content areas utilizing Squarespace’s LayoutEngine and Content Block System. Pages, footers, sidebars, and blog posts can utilize all Content Block types (e.g., audio, video, text, markdown). Users can apply Custom CSS to any template through the firm’s built-in custom CSS editor.

The company has established a strong brand as a result of its success. It has more than one million paying customers, including companies in hundreds of industries. These include prominent brands such as Rodate, Tokyobike, V Magazine, Freemans, Lyft, and Fast Company. Moreover, Squarespace has won many honors, including four Webby Awards (2014), the Critics’ Choice CMS Award for Best Website Builder (2013), and recognition as one of Time’s “50 Best Websites” (2012).

Channels

Squarespace’s main channel is its website, through which it acquires most customers. The company promotes its offering through its social media pages and online/TV advertising.

Customer Relationships

Squarespace’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through its website while having limited interaction with employees. The site features a number of self-help resources, including articles, guides, videos, consumer and developer documentation, and answers to frequently asked questions.

Despite this orientation, there is a personal assistance component provided by the following features:

• 24/7 phone customer service from individuals with extensive Squarespace experience
• Workshops offering in-person guidance on building an online brand (offered at New York headquarters)
• Squarespace Circle, a group consisting of significant Squarespace users (those with three or more active websites); they receive perks such as exclusive content (product release notes, advanced guides) and six-month trial periods for new projects There is also a community element in the form of a peer forum called “Squarespace Answers.”

Key Activities

Squarespace’s business model entails maintaining a robust platform for its customers (it is cloud-based).

Key Partners

Squarespace maintains partnerships with companies that offer services to its customers. They operate in the following areas:

• Setup – Partners include Heidi Lakin, Knapsack, Eva Goicochea Studio, PB&J, and Outlaw Creative
• Design – Partners include Raygun Design, Vuela Design Studio, and Jenni Schwartz Design
• Coding –Partners include 320NY, DCODE, Squeakworks, Square Studio, Sarah Moon, and THEORY
• Photography – Partners include Candy Black, The Beauty Shop, Seth Daggett, and SquareFlair ### Key Resources

Squarespace’s main resource is its proprietary software platform, which serves more than one million customers.  It also depends on human resources in the form of developers for product enhancement and customer service staff for support. Lastly, as a startup it has relied on funding from outside parties, raising $78.5 million from three investors as of April 2014.

Cost Structure

Squarespace has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely marketing, a fixed expense. Other major drivers are in the areas of customer support/operations and administration, also fixed costs.

Revenue Streams

Squarespace has two revenue streams - subscription fees and transaction fees, as discussed below:

Subscription Fees - Subscription fees charged for access to its website-building platform. Specific options and their pricing are as follows:

• Cover Page – Offers a single-page website. Specific features include unlimited bandwidth and storage, a mobile-optimized site, powerful site metrics, a free custom domain with annual purchase, and 24/7 customer support. Pricing is $5/month billed annually or $7 billed month-to-month.
• Website – Offers a website with multiple pages. Options are:
• *Personal *– For consumers. Same features as the Cover Page option, as well as 20 pages, galleries, blogs, fully-integrated eCommerce, and the ability to sell unlimited products and accept donations). Pricing is $12/month billed annually or $16 billed month-to-month.
• *Business *– For companies. Same features as the “Personal” option, as well as unlimited pages, professional e-mail from Google, and a $100 Google AdWords credit. Pricing is $18/month billed annually or $26 billed month-to-month.
• Commerce – Offers enhanced eCommerce options for businesses. Options are:
• *Basic *– For new businesses. Same features as the “Business” option, as well as a Squarespace website with integrated blogs and galleries, powerful commerce analytics, label printing through Shipstation, and integrated accounting through Xero. Pricing is $26/month billed annually or $30 billed month-to-month.
• *Advanced *– For experienced businesses. Same features as the “Basic” option, as well as abandoned checkout autorecovery and real-time carrier shipping. Pricing is $40/month billed annually or $46 billed month-to-month. Transaction Fees – Transaction fees charged to businesses for sales occurring through their websites. Those utilizing the “Personal” option are charged 3% per sale, while those using the “Business” option are charged 2% per sale. Those using the Commerce plan are not charged.