Today we're going to dive into how to avoid putting the cart before the horse with HubSpot.
What is HubSpot? The Company, Its Software, Revenue, Pricing, and New Projects
But in case you're not as familiar with HubSpot, just to review here:
HubSpot is a New York Stock Exchange (NYSE: $HUBS) traded software company primarily focused on building inbound marketing software and related inbound sales productivity software and CRM software. The company is headquartered in Cambridge, Massachusetts and has offices all over the world including Ireland, Singapore, Australia, and more recently Germany.
Founded in 2006 by Brian Halligan and Dharmesh Shah, who met while at grad school at MIT, the company currently has a revenue run rate of approximately $100 million per quarter or about $400 million per year. Most of HubSpot’s revenue comes from software subscriptions. Its most recent earnings report shows that its annual software subscription revenue per customer is slightly down, but is still a very respectable $10,332 per customer, per year. So the average HubSpot customer is spending about $860 per month on HubSpot software.
Given that most HubSpot customers’ monthly bills increase over time, through a combination of additional supported contacts capacity, level upgrades (HubSpot Basic to HubSpot Professional to HubSpot Enterprise, and add-ons.
During their analyst briefing, HubSpot noted that its annual software subscription revenue per customer was pulled down because of the lower average selling price of some of its newer entry-level software -- including two different products that are both at a $50 per month price point: HubSpot Marketing Starter and HubSpot Sales Professional. However, at the recent INBOUND conference, HubSpot announced some new capabilities being added to HubSpot Sales Professional and revamped pricing, increasing the Sales Professional price point to $400 per month for the first five users.
As a software as a service (SaaS) company in a state of continuous improvement, some of HubSpot’s newest projects in the works include
- Its recent acquisition of artificial intelligence (AI) software company Motion AI -- that's going to help HubSpot get more aggressively into integrating their software with chatbots
- Deeper Integrations with Facebook
- E-commerce integration with Shopify
- An ambitious project called Customer Hub -- perhaps a year away, that's supposed to do for customer service and support what HubSpot has done for marketing and sales over the past decade on the marketing side and the past four years on the sales side
So that's a little bit about HubSpot.
Getting Your Priorities Straight in the Right Order
Now today's episode is all about “HubSpot: Cart Before the Horse?”
What do I mean by “cart before the horse?” If you go to Wikipedia and do a little bit of research on this expression, you’ll find out that the expression existed long before Brian Halligan and Dharmesh Shah met each at MIT and founded HubSpot back in 2006.
The expression “cart before the horse” literally has to do with when people were using horses as their predominant transportation method. So this goes all the way back to the early 16th century as a figure of speech during the Renaissance.
Today, what it’s largely is about, is when something is done contrary to a conventional or culturally expected order -- where something is being done in the wrong order -- putting the cart before the horse.
In other words, like getting HubSpot before you’ve thought through inbound marketing and inbound sales -- before you’ve thought through what any of these things really matter to your business. Or as Simon Sinek would say: thinking through the “why” -- starting with “why?”
Avoid the Analogy for Doing Things in the Wrong Order.
So if something is being done contrary to a conventional or culturally expected order or relationship, today “cart before the horse” is usually thought of as an analogy for doing things in the wrong order.
It's an age-old idiom and proverb -- whose first use dates back literally hundreds of years ago to the early 16th century.
Now from my standpoint, what originally motivated me to put this episode together:
A Lot of HubSpot Customers Making the Same Mistakes
I see way too many HubSpot customers -- even HubSpot Partners, HubSpot users of all different levels, from Hubspot Starter to HubSpot Basic to HubSpot Professional to HubSpot Enterprise on the marketing side and on the sales side, through the HubSpot User Group program -- making a lot of the same mistakes.
I've been a HubSpot customer since 2010 with eight different HubSpot certifications. I've led a HubSpot User Group for four years and have consulted with hundreds of small business owners, sales directors, and marketing directors about anything and everything related to inbound marketing and inbound sales -- boh HubSpot customers and customers using other tools and platforms.
What I’ve found is that HubSpot Professional or HubSpot Enterprise software is often purchased either by a small business owner or a marketing manager with the idea that these tools are cheaper than a person -- less expensive than adding a full-time equivalent (FTE) to payroll.
And yes, that is true. In most regions of the world where HubSpot Professional or HubSpot Enterprise software is in use, especially in South Florida, you can’t hire a full-time employee -- let alone an experienced marketing staffer -- for $800 per month or even $2,500 per month in fully loaded costs.
But often what we're often finding is that HubSpot Professional and HubSpot Enterprise is purchased without necessarily having the right internal or external expertise to deploy HubSpot properly, to manage it properly, to do the reporting and optimization on a regular basis.
“We Want Your Help Doing HubSpot.”
What we often hear is people will come to us; I'll get an email or a message through Linkedin or Facebook Messenger, or my voicemail:
“Joshua, you come very highly recommended. We want your help doing HubSpot.”
And those are the literal words: “doing Hubspot.”
My reaction: what does “doing HubSpot” mean to you?
You want to “do HubSpot” -- why?
What does that mean to you? What's the reason why you're approaching this in the first place?
Do not put the cart before the horse.
The strategy is supercritical. Getting the strategy right is the key to being able to unlock success with the HubSpot platform -- and everything else that it stands for around differentiation, competitive positioning, sales cycle acceleration, and revenue growth.
Way too often, there is a huge disconnect between why somebody invests in the HubSpot software and what they think they want to do, versus the reality of what they need to do.
Build a Faster Horse?
There’s a quote from Henry Ford:
“If I had asked people what they wanted, they would have said faster horses.”
Ford would never have built the Model T, which led to the modern auto industry as we know it today.
So we need to be careful, to make sure that we don't always give people what they're asking for -- that we focus on what they truly need.
I was at HubSpot’s INBOUND conference four or five years ago, when a remember a speaker in the HubSpot Partner track explaining with a story why we need to be true consultants. We need to truly diagnose before we prescribe.
If you've ever heard of somebody that brought their car into the shop and said to the mechanic:
“I need a new transmission because it's making this noise.”
Meet the Patient Who Ordered an Appendectomy to “Cure” Their Heartburn from a Spicy Dinner
So this person goes back a couple of days of later to pick up the car. Of course, because the car now has a new transmission, just like this person asked for, there’s a bill approaching $4,500.
This person drives the car home and around town for a few days -- then says to himself (actually pretty loud and angrily): “What the heck! It’s still making that darn noise!”
This person goes back to the auto shop and mechanic -- and frankly is livid: “Dude. I spent $4,500 on this transmission, and it’s still making the damn noise!”
The auto shop owner’s response: “Oh, do you want me to fix the noise? Or do you want me to do what you told me to?”
We have a responsibility to help our employers, board members, and investors achieve their business outcomes and goals.
The Huge Disconnect Between Expectations, Investment Levels, Resources, and Timeframe
Many times, somebody that is new to inbound marketing, inbound sales, and using HubSpot just frankly doesn't know what to ask for and what their true needs are.
So we need to make sure that we're very aware that people often put the cart before the horse -- where strategy is an afterthought.
This ends up causing a huge disconnect between their expectations and their investment levels -- in terms of resources, financial investment, and timeframe. All of those things should be discussed at length before you embark on using inbound marketing, inbound sales, and HubSpot to grow your company.
When Thought Leadership is Not Even an Afterthought
Many times companies that are new to doing all of this have very little educational content on their websites that's worth promoting.
The whole idea of being a thought leader and publishing thought leadership content, is just simply an afterthought.
You really cannot do inbound marketing and inbound sales without educational content that answers questions, provides advice, and helps with goals, problems, and things that are hyper-relevant to the people you care most about.
Very Poor Grasp of Buyer Personas (And Accompanying Arrogance)
Often times people that are new to inbound marketing, inbound sales, and HubSpot have a very poor grasp of buyer personas.
Sometimes they think they have buyer personas and that arrogance can get them in a lot of trouble.
If you're serious about using inbound marketing, inbound sales, and HubSpot to scale revenue, buyer personas are not something that can be banged out in a half hour and that can fit on a cocktail napkin or Post-it note.
When you're building out buyer personas, you should have customer interviews through face to face conversations, video conferences, and phone calls. You should be talking with internal stakeholders. When talking with actual customers, it’s preferable to visit those customers at their locations, so that you can see their environments.
It’s a lot of work -- but highly worth it -- to pull all of this together. And it's only when you start to see consensus and things line up -- and it's not just the demographics lining up. But it's their goals, plans, challenges, behaviors, and where they hang out online and offline -- all that stuff needs to line up to make sure that you have a buyer persona.
All too often, people that are new to this: they've defined in their minds what they think their buyer personas might be. But they haven't validated any of that with actual research.
Remember a buyer persona is a semi-fictional representation of one of your ideal clients based on actual research. Double-highlight, underline, bold whatever you need to do on the word “actual.” But there needs to be real research, not wishful thinking, and not guessing.
So having a very poor grasp on buyer personas is putting the cart before the horse when it comes to HubSpot.
Very Poor Grasp of Buyer’s Journey and the Zero Moment of Truth (Ignorance)
Many times, people that are new to this also have a very poor grasp on their buyer's journey.
They're not thinking through just how much things have changed with the Zero Moment of Truth (ZMOT).
The whole idea of what Google has termed “ZMOT” is understanding that people are so much more empowered today -- between search engines, social media, and mobile devices -- that they are doing crazy amounts of research before they ever get to you.
And you have a choice. Your company can be relevant in that first 70% of the buyer's journey that's happening before they get to you. Or your company can be invisible and pretend like it's still the 1990s.
Again, this is a case where that ignorance and arrogance has to be tackled. Otherwise, you are putting the cart before the horse with getting HubSpot before you have thought through these things.
Using HubSpot to Cold Call, Cold Email, Interrupt, and Harass Prospects as If It Were Still 2007
Many times people subscribe to HubSpot Professional or HubSpot Enterprise do so because they think it's cheaper than hiring an internal person or cheaper than partnering with a company that’s already got this expertise.
And some people end up using HubSpot to do cold calling and cold emailing (basically using HubSpot to spam people). They're purchasing lists and spamming people -- which by the way, is a really quick way to violate the terms of service (TOS with HubSpot and get your account suspended. HubSpot’s email abuse team is very quick, rightfully so, to pull the plug and reign you in on email marketing best practices. So you don't want to do that.
If you're thinking that you're going to use HubSpot marketing the way you've always addressed your Internet marketing -- with harassing and interrupting prospects as if it's still 2007, this will be a massive contextual fail on your part in your inbound marketing and inbound sales.
And the HubSpot platform will not work for you in this way because you're putting the cart before the horse.
Getting the Wrong People On the Bus
Another big way that people put the cart before the horse when it comes to HubSpot, is that they have the wrong people on the bus.
They don't have the right people on their team. Of course, they think they do, but they just don't know the right questions to ask.
So these kinds of HubSpot users end up with perhaps some veteran marketers with outdated skill sets, perhaps 20-30 years of experience in marketing including digital marketing.
But if they haven't kept their skills sharp during the past two to four years, wow could you be in for a world of disappointment! Yes, inbound marketing, inbound sales, and HubSpot all change that quickly.
If the person who is leading your digital strategy is not obsessed with listening to podcasts, attending webinars, reading blog posts, and going to conferences, their knowledge will get very stale very quickly.
A lot of times when you put the cart before the horse, the driving force for hiring is the lowest-cost personnel. You’re like, “Wow! I can get somebody with 25 years of experience leading a marketing team. And she’s willing to work X dollars because she’s been out of work for six months.” Or, “Hey, you know this person is right out of school. This is who I can afford. She looks like she knows what she’s talking about.”
Tackling the Three-Pronged Problem: Inbound Technology, Talent, and Strategy
Using Facebook, Instagram, WhatsApp, or Snapchat for your personal use is very different than building a sales funnel. This is a three-pronged problem. You need the right:
And yes, HubSpot definitely is an important piece of the technology stack to do this the right way.
But the reality for anyone especially in B2B, B2G (business to government), and even B2C if you have a long, considered purchase cycle:
HubSpot alone is not going to cut it. I can't imagine doing inbound marketing if you were just using HubSpot by itself -- without having related, complementary software and integrations such as:
- GoToWebinar for live events and distance learning
- Wistia for video hosting
- SurveyMonkey to understand what's going on in the minds of our prospects and customers
- Google Apps (G Suite)
There are many other pieces that need to be added to HubSpot to do inbound marketing and inbound sales correctly -- not to mention than in the in the critical need for Paid Search and Paid Social for companies that are new to inbound marketing, inbound sales, and HubSpot that don't yet have enough reach, website authority, social authority, or enough of a strong email database.
So the technology is supercritical, and HubSpot is important, but HubSpot alone will not be able to do it.
There are other components that need to be tied in and integrated together with all of that.
So don't put the cart before the horse with your technology stack.
And don't put the cart before the horse with your talent. This is where a lot of people go really off the rails.
To build a team that can do all of this, you need somebody who's a
- Strategist and project manager
- Content creator for written content
- Multimedia content creator for podcasts, webinars, Facebook Live, YouTube Live, and video production. That's a different skill-set then someone that's good at writing.
- Designer because your stuff has to look good
- Developer for your website or websites. You cannot compete effectively and meet your growth goals if you launch a new website and let it sit static for months or years on end. That set-it-and-forget approach doesn't work in a world where everything is digital first. It's a really easy way to get disrupted by companies that aren't sitting on their hands for years. Want an easy way to tell if there’s a problem? Look at copyright year in the website footer.
- Content promotion team including specialists for social media, public relations, organic search engine optimization (SEO), and search engine marketing (SEM) including Google AdWords and Bing Ads
- Landing page conversion and optimization specialist
- Email marketing and workflow automation specialist that can properly segment and personalize to accelerate leads into marketing qualified leads, sales qualified leads, and sales opportunities
- Sales enablement and sales ops specialist that administers the CRM, supports the sales team, and handles closed-loop reporting
And yes it is theoretically possible to find one person that can check all eight or nine of those boxes.
But that's like a baseball team trying to draft the five-tool player -- trying to find that once-in-a-generation talent like Giancarlo Stanton, Mike Trout, Miguel Cabrera, or Bryce Harper. And that’s why they’re commanding multi-hundred million dollar contracts because of the extreme scarcity of skillsets like that.
In your content, this more than likely is a person that's going to come in commanding a six-figure salary and then some. And then that superstar person is still going to need to have a couple of junior staff members on their team for capacity and to scale faster.
Why? Because it is impossible for one person, even working 80 hours a week, to cover all nine of those areas for your company in the right context.
So again, do not put the cart before the horse. Think through your team and talent.
And think through your strategy before you jump head-first into HubSpot.
Again, your strategy needs to take into account that we live in a world where 70% (or more) of the buyer's journey is happening before a potential client ends up on your doorstep.
It's critical that you and your company get found early enough to be seen as trusted advisers; to get that seat at the table, to shape the purchase criteria.
You must have presence in the awareness and the consideration stages of the buyer's journey.
By default, companies that put the cart before the horse don't get discovered until the decision stage when it's too late -- and somebody has already gotten there ahead of them and planted the seeds for what's most important.
Most of the time companies that are new to inbound marketing, inbound sales, and HubSpot are severely overinvested in the final 30% of the buyer's journey -- and severely underinvested in the first 70% of the buyer’s journey.
These companies are living in the past, chasing an outdated approach with an outdated playbook -- and not getting found early enough.
So what ends up happening: the only thing they have left to play is price competition, which kills their profit margins, completely demoralizes their team, and can be the death knell of your whole business. You end up with really bad positioning.
So with your strategy, make sure that you understand
- Buyer personas -- your primary and secondary buyer persona, your negative buyer personas
- How your buyer personas drive all of your segmentation and personalization -- Frankly doing inbound marketing and inbound sales without segmentation and personalization just hurts my ears to even think about. You're not doing inbound marketing if you don't have a good segmentation strategy and a good personalization strategy.
- Buyer's journey
- Product/market fit -- exactly who's buying in what context, what timing, and at what price points, to scale strong demand
- The value of your company’s thought leadership committee -- at least a handful of people that are committed to creating or influencing content creation on a regular basis at scale
- SMART goals -- that are specific, measurable, attainable, relevant, and time-bound. You need to have targets and deadlines to work towards. The goals have to be realistic for what you've done in the past.
- How you’ll modernize your sales and marketing playbooks
- How you’ll get your CEO on board -- or none of this will matter because
The First Impression That Your Inbound Marketing and Inbound Sales Must Exude
When somebody -- and complete stranger -- lands on your digital presence, your website, for the first time, it's critical that you get that two-pronged deep, emotional, visceral reaction:
- “Wow! I can't believe I finally found this stuff. It’s awesome!”
- “Who are these folks? What else do they have to say?”
If you don't get that two-pronged emotional reaction, they're gone for good.
Don't put the cart before the horse.
Connect the Dots to Tie Together the Full Inbound Marketing Methodology
Attract: Inbound marketing is all about how to attract strangers into visitors. Most people, when they're first starting out if they haven't thought through their inbound strategy, they end up doing a lousy job here. There’s no helpful, educational content. And they just end up spamming people with a whole bunch of self-serving me-me-me stuff. “Hey, we’re wonderful. Our team is wonderful. Here’s our portfolio and credentials.” People don’t give a crap about that stuff when they’re never heard of your company before.
Convert: You need to obsess about their problems, not your problems, to convert more of your visitors into leads. Most people do a lousy job here as well because they don't have enough landing pages and premium content behind those landing pages. Why? They haven't done a deep enough dive on their buyer personas. Do not put the cart before the horse.
Close: When people do put the cart before the horse, they tend to jump into the third box -- the third stage of the Inbound Marketing Methodology before the first two (Attract and Convert). They’re just trying to get leads into clients by misusing cold calls and spamming people, thinking that this is inbound marketing. What the heck?!? That is not inbound marketing!
Delight: The fourth box of the Inbound Marketing Methodology, where you’re trying to turn your clients into promoters, most of the time it's just completely ignored and overpowered by arrogance. “We’re wonderful. Our customers should kiss our butts because we’re allowing them to spend money here in the first place. Short of financial problems, we must be doing this right.” In a world where so much of the buyer’s journey is based on what prospects find out about your company when they do a search on search engines or social media, it’s no longer about what you say your brand is. It's what the collective consensus of the internet says about your brand that matters most.
Your Inbound Positioning as Thought Leaders
Make sure that you position your company as thought leaders and experts. This is what inbound marketing and inbound sales is all about.
It’s why buyer personas are so important. It’s why the buyer's journey is so important.
And make sure that you're focusing on achieving SMART goals.
The Bottom Line on HubSpot: How to Avoid Putting the Cart Before the Horse
HubSpot is a great platform for putting this all together. But if you try to build your house or construct your building without thinking through your plans, your systems, your budget, and your investment levels -- without having all the key players…
If you rush this, if you go cheap, if these kind of discussions are an afterthought, you are treading water almost immediately.
If your company is serious about differentiation, competitive positioning, thought leadership, sales cycle acceleration, and revenue growth, these are all great things that inbound marketing, inbound sales, and HubSpot software can help you tremendously with.
But do not put the cart before the horse.
Technology. Talent. Strategy. Do not pass go without strategy. Don't make strategy an afterthought or you will invest in the wrong software.
We’ve seen so many people purchase the wrong level of HubSpot software. Or make the wrong commitment on HubSpot software because they haven't thought through these things.
The strategy is absolutely critical.