Why HubSpot is eyeing Australia’s mid-market marketers

Chief operating officer at the inbound marketing platform vendor explains its decision to launch a CRM offering as well as the changing marketing automation landscape

JD Sherman
JD Sherman

US-based inbound marketing platform, HubSpot, is ramping up its assault on the Australian marketplace, investing in new offices and launching a CRM tool that significantly expands its functionality.

HubSpot was founded in Massachusetts in 2006 and provides inbound marketing tools to mid-market companies. The company reached US$115.9 million (AUD$157.28m) in revenue in 2014.

Last year, it recruited a dedicated Australian sales team, and in October will move into permanent offices in Sydney, supported by a new regional headquarters in Singapore.

HubSpot’s chief operating officer, JD Sherman, told CMO Australia is the perfect market for HubSpot, due to the high proportion of mid-sized businesses here. He said the platform was developed to drive inbound marketing for those smaller businesses, particularly business-to-business companies, that do not have an integrated solution, which he estimated is 97 per cent of the total business community in the US.

“What you have seen is that small and medium businesses have had pieces of a marketing solution for a while,” Sherman said. “We could see that mid-market companies were struggling to piece together a solution to deal with the fact that their prospects are searching online for goods and services, interacting over social media, and so on.

“That’s why we thought there was a big demand there, and there certainly is – we’ve seen a tremendous amount of growth there.”

But as HubSpot grows, it is increasingly coming into competition with other marketing platform vendors, including Oracle and IBM.

“We decided to stay in the mid-market, but go wide - so build a very broad platform that mid-market companies can adopt to basically run their entire marketing and sales playbook,” Sherman said.

More on HubSpot: HubSpot reveals new partnerships with SlideShare, Spotify and data analytics vendors
HubSpot's US$100m IPO listing welcomed, but profitability questions raised

This focus on broadening its capabilities saw HubSpot launch its own free CRM tool earlier this year, to complement its existing Sidekick email tool. That decision put it in competition with one of its backers, Salesforce, which invested in the company as part of a US$32m round in March 2011.

We decided to stay in the mid-market, but go wide - so build a very broad platform that mid-market companies can adopt to basically run their entire marketing and sales playbook

“We noticed that of our installed base, almost 60 per cent were not using CRM software at all, they were mostly using HubSpot and our contacts database to manage their sales activities,” Sherman said.

HubSpot has long had a ‘co-opetition’ relationship with Salesforce, and is a Salesforce user itself, with a large segment of HubSpot’s customers also integrating with Salesforce, he continued. The ambition for HubSpot’s CRM is to address greenfield customers that have not yet signed on to any CRM system, which is estimated at 60 per cent of current customers.

“It would be tough for anybody to go head-to-head with entrenched CRM providers,” Sherman said. “What we are really trying to do is solve a need for the mid-market, for a different kind of CRM software.

“And we thought they would get a lot more value out of the HubSpot marketing software, as well as be more effective with their total marketing and sales organisation, if they had a CRM tool to use.” Sherman claimed that in this market, Salesforce is at a disadvantage, as it is designed for the people managing sales teams, not working in them.

“When we talked about CRM software with our own sales team, we found out that our sales people spend an hour-and-a-half a day just entering stuff into the CRM,” he said. “It is a productivity drain rather than a productivity benefit for the sales person.

“We created a CRM where as you are doing your daily job there is less input that has to come in. The CRM sucks in input from the marketing software, and from the sales tools that you use.”

HubSpot also competes with Salesforce thanks to that company’s 2013 acquisition of ExactTarget, which also bought the Pardot business-to-business marketing automation tool under the Salesforce umbrella.

However, Sherman said that where Pardot is focused on the middle part of the sales funnel, to convert qualified leads into sales, HubSpot is focuses on the top of the funnel.

“We have a platform that can turn strangers into visitors and visitors into leads, as well as turning those leads into really good opportunities for the sales team,” he said.

Marketing automation is great – it solves the problem that five per cent of companies have of a great list of prospects that they need to turn into leads for the sales team. The problem that HubSpot solves is that that problem, plus the problem that 95 per cent of companies have, that they need a bigger ‘top’ of the funnel.”

HubSpot will continue to broaden out its core service platform. Sherman said part of that plan is to roll out a robust set of APIs to improve integration with other tools, as well as enhancing its analytics capabilities.

“I would say we are in the very early innings of analytics for HubSpot,” he added.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

Join the newsletter!

Error: Please check your email address.
Show Comments

Blog Posts

Maintaining trust in a sceptical world: The power of brand trust

The faith people have in brands creates opportunity for those brands to become trusted advisors. In turn, this builds success by increasing the brand’s profile, letting it broaden its product offering and driving stronger customer loyalty.

Dan Ratner

managing director, uberbrand

When growth stalls: How to boost growth in large organisations

The push to start new businesses continues. In Q1 2017, the number of seed and angel deals increased by 1.4 per cent compared to Q1 2016.

Con Frantzeskos

CEO, Penso

Why we need diversity in marketing

​When we read articles about the need for increased diversity in marketing land, it is often through the lens of gender.

Jodie Sangster

CEO, ADMA

We all know that digital marketing in order to promote a brand, products and services is by the use of electronic media. The evolution of...

Helaina Berry

Predictions: 17 digital marketing trends for 2017

Read more

Interesting insight, well explained and the examples are just apt.Thanks for sharing!

FreshMindIdeas

The politics of branding - Brand science - CMO Australia

Read more

When the world that we live in floods with gigabytes of content every day, we have to learn to be selective about it. Such educational we...

Paulina Cameron

ADMA launches education program to tackle viewability, ad fraud and brand safety

Read more

Hi, i am an Aistralian ALK patient, been on xalkori dec 13 to oct 15 and achieved remission of disease, since been on Ceritinib until no...

gary packer

Pfizer Australia adopts AI-powered digital analyst tool for sales and marketing decision making

Read more

Hi James, shouldn't marketers also be focusing on collecting and utilizing up to date first-party profiling data on customers so that mes...

Tom

3 ways customer data can increase online sales conversion

Read more

Latest Podcast

Getting Intimate with CX Ep 5: Tammy Marshall, founder, The B Hive

How much of customer experience is having the foresight to know what those individuals might like, versus asking them? In Episode 5 of this new podcast series, BrandHook MD, Pip Stocks, talks with Tammy Marshall about the importance of asking your customers questions, how consistency plays a role in engagement, but how the unexpected adds extra value.

More podcasts

Sign in