How Marketing Is Transforming SaaS

Posted by Madeline Reddington /July 15, 2015 / Advisors, Entrepreneurial Advice, FounderTalk, Hot Topics, Uncategorized

Marketing expert Mike Volpe was one of the first 5 employees to join Hubspot in 2007, and has been a driving force behind the company’s fantastic work bringing marketing and sales together to delight companies and clients. Hubspot has become a top software as a service (SaaS) brand, and been a leader in content-driven inbound marketing. Mike talked with us this week about running a SaaS company and marketing that engages users based on their interests rather than being intrusive.

How have you and your team approached sales and SaaS differently that has been fundamental to your success?

There have been two generations of sales at Hubspot. When we first got started, almost everybody did relatively expensive outside enterprise sales. We had a new theory of how sales and marketing were going to work, so rather than cold-calling all day, ours is a sales team that’s usually following up on leads and interest that we’ve generated from the web. When we first got started, that was a relatively new way to think about the world. Today it’s still somewhat unique, but there are more people adapting to that as a model, because it’s proven to be successful.

The second wave of sales at Hubspot is using engagement with free products to get people interested, to then either sell them something without a human or then have a conversation. This is another form of inbound marketing which is more using free tools, experiences and products to interact with people, not just content and social media.There’s more and more consumer self-service. That’s what people want. And then when they do want human interaction, you need to be responsive.

If you want to have a growing business, you need to respect that the buyer has all the power.  Tweet this

And undo this mental block that you’re trying to wrestle some control away from them. You do better if you embrace the fact that they have all the control.

You’re one of the few SaaS companies that has built a real social media presence and following. Did you decide that this would be important early on? What would you tell others that say they want to do this?

It’s obviously a core part of our mission. When we first started we couldn’t cold-call a bunch of people and tell them ‘hey you should do marketing in a different way.’ It’s so inauthentic. It’s so much easier if they engage with your social media, find your blog and read some articles, and then they contact you and you start to pitch them then. It makes a much more effective sale for us and everyone else if we live up to who we are and are transparent and authentic. That’s been a core part of our strategy from day one.

For other companies wanting to work on social media, I’d say the most important thing is to have a deep understanding of your buyers; the people with a problem you think you can solve. Find out where their daily interactions are, problems they face on a daily basis and what information they’re looking for. It’s not unlike other product developments, where you need to talk to your customers and learn about them to develop a product for them.

Given that SAAS companies tend to tightly knit together marketing, sales and service, how would you distinguish those responsibilities?

The lines are definitely more blurred. If you look at companies 20 years ago, sales would do all the demand generation, so they’d cold-call people all day long to try to set up meetings. And they would sort of own that process from a list of people in a phonebook through to revenu. Then marketing was providing some kind of support along the way, stuff around PR and brand, maybe some sales support materials, like case studies and writeups.

Today is a different world. Eighty to ninety percent of our revenue is originated by marketing.  Tweet this

We generate leads and hand them off to the salespeople, and that’s the vast majority of the revenue that we bring in. So that’s kind of a huge change where there’s more shared ownership over the revenue number. And with a humanless sale, marketing kind of owns the whole process. A lot of people talk about how marketing needs to be more data-driven, and I think it comes from marketing having more opportunity and responsibility for the revenue numbers.

SaaS has become “hot” again in the last few years – anything you think has fundamentally changed since you guys started?

In the old days you would pay people a couple million dollars and they’d say “Great, thanks for buying our software—here’s a bunch of CDs. Good luck!” Today it’s shorter commitments, smaller dollars up front, and the value in the customer relationship is over the longevity of the relationship. It’s much more in the vendor’s interest to ensure customers are successful. That fundamental shift has been huge for the entire industry. The second shift that’s starting to happen is even more focus on providing value to the customer before they purchase. With free tools, free engagement, freemium models,  You’re showing value to someone before they actually give you any of their money. Anyone can try the Hubspot platform for free, start using it in seconds and decide if they like it or not. That’s a gigantic shift. It’s related to that whole buyer-in-power transition that’s been happening.

What would you tell a SaaS company doing their first marketing hire?

You can’t make that first marketing hire too early. Most people wait until they have the product 100 percent ready. That’s kind of too late.  Tweet this

As soon as you know the buyer or person that you’re trying to build something for and have some sense of what their problems are, you can start doing some marketing to them, you can start building content, social media communities, etcetera. You can start engaging with that audience. You don’t need a product to do that; you just need to know who the buyer is and roughly what their problems are. You can’t possibly hire that person too early.

Additionally, you need someone who’s a good balance of quantitative and creative. If they’re all creative, you’ll miss out on the breaking down the metrics and driving growth. If they’re too quantitative they’ll just implement they’ve seen other people do, and not really freestyle and create things that are new and unique. You really need both to be successful today.

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