Why HubSpot Is Missing Out On Extra Business!

hubspot marketing strategy

Investigating the Hubspot marketing strategy

It wasn’t long ago that Hubspot approached us to become a partner. The deal was that we would promote their software and would receive benefits for doing so. For every sale that we made, we would receive a commission and the extra training would help us develop our sales process.

On face value, Hubspot’s offer seems very good. This is until you boil down to the finer details. To become a partner of Hubspot, we would have to buy a mid-level package of their software. The price of this would be £8820 for the first year and £6720 for every year after that.

Putting this into contrast, the cost is more than double what most of our clients pay for a blog and social media management every year.

So I turned down the offer. Although being associated with Hubspot is an excellent opportunity, the costs just aren’t viable. We pride ourselves at offering cost effective services. To cover the costs of the software it would take up to 25 clients.

And we are just covering costs at this point. There is no room to generate extra funds to develop the business. However, HubSpot’s partner program does allow for another way to gain your investment back: commission on selling their software.

Hubspot Commission

The problem is that Hubspot has taken a rather short term strategy for the program. Their partner program has several tiers, based on how much you are generating HubSpot. They do list their partners and at what tier, so we know that 502(ish) partners have made it past the first tier known as entry.

Those above this initial tier are generating HubSpot over £1,500 worth of monthly sales. Their commission for this would be (at least) £300 – so not even covering the cost of the package. Earning enough sales to qualify for the next level will just meet the monthly costs to be part of the program. But at that stage you would have to recruit up to 20 clients for HubSpot.

Developing Brand Advocates For HubSpot

The thing is, HubSpot does have an amazing piece of software but their marketing strategy has a flaw: they aren’t generating brand advocates. Internet marketing consultants and agencies are significant influences and targeting them is a stroke of genius by HubSpot – but they’ve missed the mark in some cases. When you discover that potentially up to 1785 (87%) of their partners might not be making back their investment from commissions and the extra work could be costing them more than it is making them – the only conclusion I can draw from their numbers is that the HubSpot partner program is limiting.

Of course we can’t say for certain, but the figures for their program are online and with some calculations these are our conclusions. If these are wrong, then HubSpot needs to clarify the success rate on their website to make it look more enticing to those scrutinising the numbers.

What Would I Do If I Was HubSpot?

The first thing I would do would be to rethink the HubSpot partner program. HubSpot is doing well. In 2014, they reported profits of over £69 million. We know that just £1 million of that comes from their partners.

Yet every agency out there is a potential brand advocate, all they need to do is to use the software and then tell their numerous clients. So why doesn’t HubSpot offer every qualifying partner the basic package for free? If they want more functionality, charge them the difference between the packages – but offer them the basic for free.

Why would this work? Because if I had free access to the basic, and I saw that it worked, I would certainly tell all my clients and show them how it works. This would be great for the company, because my clients trust me, they know that I won’t sell them something they don’t need and have their best interests at heart (the core principles of an influencer and brand advocate). Instead, because the financials don’t work out, I can’t tell them the software works. If anything, I am now a ‘negative brand advocate’ and will question the program’s cost effectiveness to clients.

The costs of doing this would easily be made up if they could get every marketing agency to bring at least 4 clients (depending on package) to them. Anymore and HubSpot would be seeing exceptional profit growth.

Conclusion

HubSpot is an excellent piece of software and the basic premise of their partner program sounds good but they might not be making it cost effective for agencies who should be brand advocates for their software. By changing their marketing strategy they could gain access to a significantly larger audience and see exceptional profit growth without the need to go to maket themselves.

Disclaimer: TwoFeetMarketing, and the author of this article, would like to highlight that we believe HubSpot’s software is a quality product and are not questioning that. Yet it is only software and the tools need to be in the right hands to help the investment be worthy. The point of this article was to highlight their marketing strategy and how they generate brand advocates. The numbers used in the article are freely available on the HubSpot website and our caclulations from when we looked into the partner program (September 2015). We cannot guarantee that these are 100% accurate, but it is likely others could draw this conclusion without other evidence from HubSpot about the success rate of the program.
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