The New Approach to Get Customers Banging on Your Door
Serving as HubSpot’s CEO since the company’s inception, Brian Halligan is a senior lecturer at MIT and the author of two books on marketing strategy.
Halligan got his start in sales and marketing by cold calling until his “fingers bled,” as he puts it, as the first inside salesperson for Parametric Technology Corp., a Needham, Mass.-based software company. When a venture capitalist enlisted him to bring the Parametric playbook to a host of portfolio companies, he realized that the old industry standbys needed a drastic overhaul if marketers hoped to cut it in an increasingly social media-centered world.
So in 2006, Halligan and Dharmesh Shah, a classmate from business school, launched HubSpot, an inbound-marketing software company that he calls the accessible solution for regular marketing guys like himself. Inbound marketing refers to initiatives that help a company grow its website traffic, leads and ultimately sales.
Halligan shared with me in a recent conversation how he came to create Cambridge, Mass.-based HubSpot and its relevancy to the current online-marketing landscape. He also offered some advice for marketers trying to stay afloat in the ever-shifting tides of the digital world. Follow our conversation, which I have excerpted, below:
Mark Wayshak: The HubSpot website says that “marketing is drastically changing for the better.” What exactly is changing and how can marketers update their playbook to adapt?
Brian Halligan: The marketing playbook everyone has used for a long, long time: I just don’t think it works anymore.
I think of email. We used to buy these lists and spam the whole world. Now everyone has spam protection; they have email filters. Online advertising used to work really well, and now it’s kind of starting to work less and less as Google gets more efficient. People have ad-blocker software. It’s just getting harder and harder.
That playbook seems to be broken, and humans seem to be radically changing the way they live and the way they work and the way they shop and the way they buy stuff. So marketers need to just throw the playbook out and rethink it from scratch. That’s the basic idea: re-creating that sales-marketing playbook to match the way people shop and buy.
Sounds easy, but obviously, it’s a little more complicated operationally. What do you see as the key steps for implementation?
The key step that is different is content. It used to be what you would do as a marketer is rent space on somebody else’s marketing assets -- TV shows, websites, the telephone book, the radio -- and you were renting yourself into people’s pockets.
The reality is the cost to create a TV show, a newspaper, a web app, a radio show has dramatically dropped. So why rent space on someone else’s property? Create your own property and audience and rent your own space. Your success now is much more about the width of your brain than the width of your wallet. You don’t need a lot of money to do it.
Is that how you came up with HubSpot?
I was really negative about the old playbook, and my eventual co-founder, Dharmesh -- we went to school together -- blogged his way through B-school. I compared the traffic on his blog, which had no money attached to it, [it] was just him writing between classes, to [that of the website of] my wealthy venture-backed startup, and it crushed us online. It generated a hundred times more interest than we did.
So, I went to Dharmesh and said, “I’d really like to implement this new type of marketing in my companies.”
And he said, “It’s really easy: You go and buy a content-management system and blogging software and hire an SEO consultant, put in social media tools, put in email marketing. Easy.”
But it didn’t sound very easy, and that’s how it all came together. I said, “Well, let’s build an integrated, simple version of that [and start a company together doing that]."
How can marketers turn visitors into leads and leads into customers?
We look at a few different numbers for our customers. We do this inbound-marketing assessment: It’s like seeing a marketing doctor. We first look at the top: How many visitors a month are you getting? How many through search, through social, through the blogosphere? How many are paid and how many are free? We ask, What can we do to double or triple that top?
Then we say, Alright, what percentage of visitors turn into leads? For most websites, it’s about 1 percent. So what can we do to increase that to 2 percent? How do we make a stronger call to action? And how do we make a more personalized experience?
Finally, once there’s a lead, we ask, How do we add value to that lead? How do we add workflow around it to increase the lead-to-customer conversion?
How can marketers capitalize on the shifting online marketing landscape?
When I was PTC, if you wanted anything, you had to talk to me. I was the gatekeeper. I had all the power and control in the relationship.
I think of that relationship now, and [the sales prospect and the salesperson] have all the same information, the same power. It’s completely symmetric information. If you want to connect with a founder, you connect with him on LinkedIn. If you want a reference, you go to Google. It’s just so easy to find anything, so that buyer-seller relationship has dramatically shifted, and the leverage has really gone over to the buyer from the seller.
Now, that buyer gets involved with a rep much later in the process. Your website is your best sales tool today. So we want to build a new type of software system to help sales reps deal with that new reality and rethink the sales process.