I have been experimenting with posting LinkedIn Newsletters, so I have not been placing my content here for the past month. I posted a pair of articles about HubSpot, which held its annual INBOUND conference in Boston.
HubSpot Brings GAI to Its Hubs
Like many other RevTech vendors, HubSpot is all in on Generative AI (GAI) and infusing it across its Hubs. CEO Yamini Rangan and Product EVP Andrew Pitre emphasized GAI in their INBOUND keynotes, emphasizing GAI’s ability to foster customer connection and please the customer.
Rangan stated that the “most intelligent way to use intelligence is to drive customer connection,” which can be “scaled to hundreds or thousands or maybe even millions of your customers by observing their patterns, anticipating their needs, and offering them insights.”
A decade ago, vendors looked at SAP and Oracle as the second CRM they supported after building their Salesforce connectors. Five years ago, the momentum had shifted towards Dynamics following the 2016 launch of Dynamics 365 in the cloud. It seems that HubSpot is now vying with MSD to be the second-supported CRM.
HubSpot has long been viewed as a decent CRM for SMBs to start on before they grow up and require enterprise features, and research from Adam Schoenfeld at Keyplay backs up this impression.
IDC, which doesn’t include HubSpot in its CRM market share analysis, noted that HubSpot has been growing much faster than the overall market, with 31% growth in 2020 and 47% in 2021…
HubSpot has measured aggregated sales and marketing platform activity across its 70,000 customers since the pandemic began and benchmarking this activity against the pre-COVID level (January through early March). Looking back at Q2, CMO Kipp Bodnar noted that “the data shows steady and sustained growth in buyer engagement, and that businesses with an online presence were ready to capture that interest.”
Marketing teams have risen to the challenge of keeping prospects interested in a messy, chaotic crisis and met an audience of buyers who suddenly spend all day at their computer,” commented Bodnar. “While email volume has risen significantly — typically a no-no for teams hoping to keep their open rates up — open rates have risen faster than volume has grown, demonstrating that teams have been successful at providing relevant and helpful content.”
Marketing email open rates are up ten to twenty percent above pre-COVID levels, with the last week of June running 18% above the baseline.
Sales teams have been less successful in their outbound communications. While sales emails have risen 60% since mid-March, “response rates have been dismal. Marketing teams have been able to connect, but sales teams haven’t. This is a huge area of opportunity for businesses as they enter the next quarter of COVID-19.”
Sales email open rates are down 25 to 30%. “As sales teams increased email sends, customers began to tune these messages out or even mark them as spam in their inboxes,” warned Bodnar. “So far, it seems if email send rates remain this high, we can expect response rates to trend in the opposite direction.”
“Volume and quality is a tradeoff — the time a team saves by sending out email blasts is wasted if that outreach isn’t personalized, relevant, and helpful. These gaps are clear in the data. At this point, sales teams should be working closely with marketing to understand how they can improve their email engagement rates, and sending far less email.”
HubSpot CMO Kipp Bodnar
Website traffic increased during the pandemic as decisionmakers and influencers began working from home. Global site traffic is up 16% in Q2 vs. Q1 with it peaking at 24% above the benchmark on April 20th. Software industry site traffic is running at 40% above pre-pandemic levels.
Customer-initiated chat levels have also risen sharply during the pandemic. Total volume is up 31% over the pre-pandemic baseline, with every measured industry seeing increased volume. “Sales teams have pivoted to chat to grow their pipelines, while customer service teams are leveraging this medium to manage the increased demand for support,” observed Bodnar.
Call prospecting has dropped significantly during the pandemic as it has become more difficult to reach individuals who are now working at home. Call prospecting fell as much as 27% below baseline the week of April 6th and now is down around 9%. Before COVID, there was a rough balance between phone and email prospecting, but in Q2, email activity doubled that of phone calls. “Sales teams will need to return to their pre-COVID balance in order to see improvements in response rates,” argued Bodnar.
Deal Creation has improved in eight of the eleven weeks since April 6th, with deal creation up the past four weeks. APAC deal creation was down 5% in Q2, North America down 6%, EMEA down 12%, and LATAM down 12%. Large companies have recovered deal creation activity faster than small firms. Computer Software deal creation was down 3% in Q2.
Deal Won has improved ten of the last eleven weeks, after dropping to 36% below baseline the week of April 6th. For the full quarter, deals won were down 11%. Smaller firms did best at closing deals, with larger firms posting the weakest performance, likely due to large firms selling a greater percentage of high-dollar, strategic deals that would have stalled in their pipeline. Computer software Q2 was 14% above baseline, but this probably overstates industry performance due to Q1 often being the slowest month of the year and the loss of many “hockey stick” end of quarter deals at the end of Q1 as the pandemic struck. Some of these likely slipped into Q2.
Bodnar provided three suggestions for Q3: invest in chat, shift from quantity to quality in sales prospecting and communications, and invest in online discoverability.
Dun & Bradstreet, which has been running pipeline health analyses for its clients over the past three weeks, assessed over 35 million accounts across 125 pipelines. They found that 21% of accounts were subject to high financial risk based on several factors: slow payment, bankruptcy, unpaid debt, and business viability, a statistic which VP of Product Marketing, Dun & Bradstreet Sales & Marketing Solutions Dennis Olcay called “jarring:”
“We continue to keep a close eye on this number, but that is a jarring statistic that demands attention as it relates to go-to-market strategies,” wrote Olcay.
“The dominant theme of our customer conversations today is how to be both sensitive and impactful in the new environment. We have found the new environment has unleashed entirely new forms of sales and marketing campaigns – far less driven by self-positioning and more characterized by seeking to meet customers where they are.”
Digital Marketing Solutions CRO Michael McCarroll
Dun & Bradstreet offered a high-level risk segmentation based upon SIC codes and each industry’s risk profile (see chart on the right). Industries were stratified across five categories: Essential businesses (e.g. food supply, hospitals), Supports Remote (i.e. businesses which were able to transition to WFH), requires contact (e.g. hospitality, entertainment), delivery-based retail (e-commerce, e-delivery, logistics), and central production (e.g. manufacturing, natural resource extraction).
Dun & Bradstreet cautions that simple SIC analysis is only the first pass in performing a risk assessment. Firms may be in the same industry but have different go-to-market and operational strategies that impact their risk profile. Another factor is their exposure to supply chain and customer risk.
“Despite the promise of MarTech to enable speed and scale for your go-to-market strategy, this is a time to hit the pause button and rethink your go-to-market approach,” cautioned Olcay. “Don’t sacrifice tailored messaging for the sake of scale and speed to market – the additional thought you put in now to think about fit, intent, and risk will pay dividends when your audiences notice you’re empathizing with them and offering real value that aligns to the specific challenges they are experiencing.”
And on the marketing side, HubSpot has been publishing weekly marketing metrics for their 70,000 customers. Data includes deal open rates, deal close rates, email prospecting, site visit rates etc. Users can even drill down by segment and country to benchmark their sales and marketing performance against peers. The most recent analysis is for the week of May 18.
HubSpot’s App Partner Program supports over 300 apps.
At its INBOUND conference earlier this month, HubSpot released a new app Marketplace. “One of the things we’ve really tried to do with the next iteration of the marketplace is just to help SMBs (small to medium businesses) get deeper information on these integrations,” said HubSpot VP of platform ecosystem Scott Brinker. “So you’re not just like, ‘Oh, here’s another company, go off and figure it out.’ It’s like, ‘OK, here’s exactly how this interfaces into HubSpot. Here’s a video of how it works.”
HubSpot partners are obligated to post pricing information, data flow structure, and demo videos. The new market supports improved filtering and searching. Over 300 apps are available with 93% of HubSpot’s 64,000 customers having installed at least one app. The average customer has installed five apps.
Amongst the top apps are Gmail, Outlook Calendar, Zapier (connectors), Facebook Ads, Google Calendar, Twitter, MailChimp, WordPress, LinkedIn, Facebook, Slack, Vidyard, Google Ads, and SurveyMonkey. “We’re really excited about trying to make this whole platform ecosystem world accessible to the SMB markets,” said Brinker.
“It’s not enough to have the wondrous capabilities all these different apps offer, especially if each is locked in their own silo. To run your business effectively and to give customers a coherent and compelling experience across all the different touchpoints they have with you, all these different apps need to work together. This is why HubSpot is committed to building an open platform that can serve as a “hub” for the myriad apps across your business that all contribute to improving the customer experience. We want to make it easy for you to orchestrate these apps, to better serve your customers, and to help you grow better.”
