HubSpot, Inc. is a marketing company for small and medium-sized businesses (SMBs) that provides a combination of marketing software products and services.
The company specializes in inbound marketing, which uses online channels to attract customers and promote revenue growth for SMBs.
This is achieved by providing tools to help them acquire new customers, generate leads from potential consumers, convert these leads into prospects with valuable information about the customer’s needs.
Brian Halligan and Dharmesh Shah founded HubSpot in June 2006, and it has its headquarters in Cambridge, Massachusetts.
HubSpot’s flagship product, the HubSpot CRM, is a web-based application that allows customers to engage with their leads, contacts, and customers through automated tracking of website activity.
It has all the tools that marketers need to analyze and optimize their marketing efforts. The CRM also has integration features for Salesforce, Microsoft Dynamics, SugarCRM, and other business applications.
HubSpot’s Business Strategy
The Company utilizes a multi-channel approach for customer acquisition through organic search engine optimization (SEO), pay-per-click advertising, email marketing management, and social media engagement.
It tries to achieve a higher ranking for its target keywords in search engines like Google, Yahoo! etc., by developing high-quality and informative content.
Aimed at market organizations with a high volume of email correspondence, HubSpot provides the Hosted Email Marketing Service.
This service allows companies to send bulk emails at low costs. HubSpot also integrates its CRM tool with Google Ads and display advertising networks like Facebook to target potential customers.
It also provides custom software development and consulting services to its customers. The vendor has a strong channel partner network that extends their reach beyond the market they serve.
It works with partners on account management, sales and marketing support, technology integration, training, etc., thus increasing the customer base.
Moreover, it has acquired several companies to aid in developing its products, increasing market reach, and complementing its CRM offerings. In 2021, HubSpot acquired The Hustle, a media startup website, creating content to get traffic and generate leads for companies.
It also acquired PieSynq, a software company that provides data synchronization services among other companies. These acquisitions not only help in product development but also increase partner networks.
HubSpot’s SWOT Analysis
- Authority and trust: HubSpot is an authority figure in the industry and commands a good amount of trust from its customers. It achieved this by years of effort to understand user requirements, offer superior products, and extend customer support. The company strives to develop itself as a trusted authority in its field of operation and has achieved this by producing quality content. The consumers have come to trust the Hubspot brand, and in turn, buy into the products.
- Strong Financials: Hubspot has had a constant increase in revenue year on year to $310.79 million in the second quarter of 2021, an increase of 53% compared to the second quarter of the previous year. The Company has also seen a positive cash flow of $25.6 million, a tremendous increase compared to $0.8 million in the second quarter of 2020.
- Large customer base: HubSpot boasts more than 121,000 customers distributed across 120 countries. Its customer base has increased steadily over the years with strong customer retention and loyalty.
- Limited market research: The Company has had little to no market research. This is because of its strong reliance on the existing CRM vendor segment. Since the competition in this segment is already so high, and customers’ product requirements are well defined, it becomes difficult to differentiate through a niche approach like HubSpot does.
- Lack of strong R&D: A majority of Hubspot’s R&D is on modifying its existing applications and adding new features to make them more useful. There is a need for the Company to invest more in improving its core products and exploring new products.
- Product development: The email market is not growing as fast as it was. However, the mobile and social media segments have huge growth potential. HubSpot can leverage this opportunity by investing in product development to offer innovative mobile apps and better social networking integration to target new customers that will grow their revenue stream.
- Revenue from services: Rising revenue from services offers an excellent opportunity for HubSpot to generate additional revenue. By leveraging its large customer base and integrating new technologies like machine learning and artificial intelligence into the platform, the Company can develop product extensions that it can sell as services such as predictive pricing models.
- Large young market: The CRM software market is growing fast due to shifting marketing strategies from traditional approaches to digital ones. The market is at a very early stage of development and has massive potential for growth. Newer companies can explore this opportunity to enter the market by identifying new needs that are not being addressed by existing vendors in the segment or offer new ways of achieving the same tasks as other products do already.
- Consolidation in the CRM market: The rising popularity of cloud-based solutions means that the market is becoming more competitive. Also, with new companies entering the segment, there is a high risk of failure for startups. Therefore only those who have access to vast amounts of capital will succeed.
- The shift to mobile: The CRM market is on the verge of a considerable change with the growth in smartphones and other connected devices used for work purposes. It will take some time before these devices become standard, but this approach can help companies like HubSpot gain an early mover advantage.
HubSpot Competitor Analysis
HubSpot, Inc. has created attractive and valuable tools for businesses to use for their marketing strategies. However, other companies provide comparable software products and services.
Given the competitive nature of HubSpot’s industry, it’s essential to understand who these competitors are and how they stack up against each other in terms of offerings, market share, and other features.
Salesforce CRM is an Enterprise Resource Planning solution that allows businesses to connect with their customers and manage sales. The Company has reported over $21.25 billion in revenue in the 2021 financial year and boasts more than 150,000 customers in 120 countries.
According to Forbes, its value stands at $241.85 billion as of August 11th, 2021. Since its inception, Salesforce has had tremendous success and will most likely continue its dominance in the industry with increased competition from the likes of HubSpot.
As of 2020, Salesforce dominated the CRM market share with 19.5 percent, followed closely by SAP and Oracle, each with a 4.8 percent market share. The HubSpot and Salesforce CRM integration gives customers the option to access both platforms from one interface.
Therefore, businesses that use HubSpot CRM software can integrate it with their Salesforce account to easily manage all their prospects and customers across the platforms.
However, in the marketing automation segment, HubSpot dominates the market with a 31.47 percent share, according to data provided by datanyze. In comparison, Salesforce’s pardot lags a little behind with 4.32 percent.
When it comes to product offerings, Salesforce is still the market leader with more than 150,000 customers. It has the most comprehensive product offering across all the verticals and a deep range of services for marketers.
But HubSpot’s specialized marketing tools are better suited to help small-to-medium businesses keep up to date on leads and contacts in this modern era of digital marketing.
Another competitor to HubSpot is Marketo, a cloud-based marketing automation platform. It offers SMEs sales insight, revenue cycle analytics, service cloud (customer support), and omnichannel marketing.
The Company has a market share of 3.05 percent compared to HubSpot’s 31.47 percent in the marketing automation segment serving more than 13,000 websites as per metrics from Datanyze.
What gives it a competitive edge over HubSpot is that it offers enterprise-grade software tools at a lower price. Its marketing automation solution boasts automated email marketing, social media campaigns, lead generation, and marketing automation.
Hubspot’s competitive edge over Marketo is the number of pre-built integrations it has to offer, making marketing automation more efficient for business marketers. A case in point is HubSpot’s integration with the Salesforce CRM solution.
Unlike Marketo, HubSpot offers a wide range of marketing automation tools in its platform. HubSpot features an all-in-one marketing software platform that allows users to track and manage their website leads and contacts, social media marketing platforms, email marketing, branding, and other essential features for modern marketing business.
Agile CRM is a cloud-based CRM service for small businesses. It offers marketing, sales, and customer service software to manage leads, follow up on contracts, and improve team efficiency.
Its automated marketing solutions such as lead management, email marketing, and sales automation allow marketers to gain more insights into their prospects and drive better ROI.
The most significant advantage Agile CRM has over HubSpot is its cheaper pricing plans. HubSpot offers three subscription plans, Starter, Professional, and Enterprise- which start at $50 per month for up to 2 users, $500 for five users, and $1200 for ten users, respectively.
Agile CRM offers three plans with the starter pack at $8.99 per month, regular at $29.99 per month, and $47.99 per month for the enterprise pack.
Bitrix24 is a more diverse marketing automation platform that offers marketing software for small businesses. It provides CRM, project management, team collaboration tools, and business analytics in a single platform.
Bitrix24 is popular among mid-sized companies that focus on sales and marketing activities as their target market segment.
It was established in 1998 by the Russian company Software of Systems LLC (Bitrix Inc.), which developed the platform to help SMEs operate more efficiently. More than 5 million people use Bitrix24, and it boasts several integrations with other various business applications.
However, HubSpot’s competitive advantage over Bitrix24 is its comprehensive CRM offering in a single platform for SMEs and growing businesses.
Bitrix24 may offer a broader range of features. However, HubSpot offers better integrations with other essential business software such as contact management and sales grids for businesses looking to grow aggressively in the modern era of digital marketing.
Oracle Eloqua is an email and marketing automation service for marketers to streamline the creation, customization, distribution, and analysis of digital campaigns across all platforms and devices. It provides real-time tracking of leads in a single interface to keep you updated about what’s working best for your business.
With Oracle, Eloqua marketers can automate their email marketing, social media, and web portals to reach out to more prospects.
Oracle Eloqua works well for mid-sized businesses with up to 1500 employees. It is considered one of the most comprehensive customer relations management tools on the market today, with a market share of 4.8 percent as of 2020, according to data from Statista.
HubSpot’s competitive advantage over Oracle Eloqua is its ease of use. While you will require some deep technical skills to master Oracle Eloqua, HubSpot’s automation tools are easy to understand. In addition, lessons are available for free on HubSpot Academy to help you learn the different features.
How HubSpot Stands Out
HubSpot uses a freemium pricing model, making it easier for new businesses to adopt the marketing automation tools offered by the platform.
Unlike Salesforce, which restricts companies with a small number of users (Not less than five) to use only their tools, HubSpot allows its growth stage customers to use all the platform’s features without paying any additional fees.
With the sales intelligence feature, you can monitor your leads, identify potential deals in the pipeline, and learn how quickly leads move through each stage of the sales pipeline to take appropriate action at each point.
The lead scoring system helps you prioritize leads based on their value and efficiently bring them into the sales process.
Another unique advantage is that HubSpot offers a developer ecosystem where programmers can create custom apps that integrate well with the platform and have broad appeal for startups.
Over 500 different apps exist on the HubSpot developer hub that offers tools for social media management, personal productivity, project management, and other business applications in one place.
Frequently Asked Questions
Question: Are Hubspot and Salesforce similar?
Answer: Hubspot and Salesforce are used for the same purpose and share similar features. You can use both platforms to create an integrated workflow between sales, marketing, customer service, and products for the ultimate customer experience. However, they are offered by different vendors.
Question: What exactly does HubSpot do?
Answer: HubSpot integrates the core sales and marketing functions of your business to provide a single customer view. It helps you manage your contacts across multiple channels.
It uses the best email marketing practices to reach out to them. Once you acquire the leads, HubSpot can help you convert the leads into revenue with its sales intelligence capabilities.
Question: Who are HubSpot’s Biggest Competitors?
Answer: HubSpot has a wide range of competitors among its many products. In marketing automation tools, HubSpot competes with Adobe, Oracle Eloqua, and Marketo.
In CRM tools, it competes against Salesforce, Zoho, and Insightly, while for marketing tools, it competes against a host of other businesses, including MailChimp, Constant Contact, and Infusionsoft.
HubSpot is one of the fastest-growing marketing automation platforms on the market today. It offers a wide range of products, features an easy-to-use UI, and fosters other essential business software integrations. HubSpot’s top competitors include Oracle Eloqua, Salesforce, and Marketo.
If you’re looking for a comprehensive CRM package to help run your business more efficiently, then HubSpot is definitely worth considering. However, if you are looking for cheaper options, you should consider alternative platforms such as Marketo.