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3 Reasons Mid-Market Companies Are Leaving Salesforce For HubSpot

Posted by Doug Davidoff on May 19, 2020 2:00:00 PM

hubspot-vs-salesforceIt was just over five years ago that HubSpot introduced their CRM, designed to work seamlessly with their landmark Marketing Hub. The release of the HubSpot CRM was great news for small businesses. 

I’ve reviewed the CRM several times over the years, each time sharing how easy it is to use and, being built for the salesperson rather than the sales VP (and CFO), it enables salespeople to get things done with less effort. My reviews of the CRM have always been very positive, I also highlighted that it still had significant limitations that prevented it from being a viable option in the mid- or enterprise markets.

That limitation has become greatly reduced over the last 18 months. In that time, we’ve personally been involved in migrating 6 companies from Salesforce to HubSpot, and I’ve counseled a dozen more. Today, HubSpot is a legitimate option for any company (certainly for those companies with fewer than 5,000 employees) looking to capture the promise that modern sales and marketing approaches have been promising for more than a decade.

Quick Disclosure: We are a HubSpot Platinum Solutions Partner. For any who perceive this as a conflict, please read my explanation here, which I fondly refer to as To my fellow skeptics...See The Before & After Productivity Results From Implementing a Frictionless  Sales EffortOver the last few years, we've embraced an approach that is now being called Frictionless Selling. At its core, this approaches realizes that the job of technology is to accelerate and make things more effortless. Technology should make us smarter and enable us to get more done with less. Unfortunately, that's rarely the case.

So we started doing things a different way, and the results have been powerful. One of the first decisions we made was to move our sales enablement focus towards HubSpot and the sales platform they were building. 

This post highlights some of the primary reasons for that decision.

They want to reduce their Friction Tax

I’ve been using CRM since the early 1990s and I’ve been at the forefront of salesforce automation for almost 30 years. The promise has always centered on enabling sales teams to take smarter actions, with less effort, in less time and with less disruption. Yet, if you were to track the adoption curve of CRMs with the sales productivity trend (time reps spend actually selling) they’d nearly have a negative one correlation. As CRM has become more prevalent, salespeople spend less time (not more) actually selling, and more time (not less) managing the administrative aspects of their job.

Salesforce has been the dominant player here, and they deserve some of the blame. Make no mistake, Salesforce is a great product. It’s a beast. It never breaks and you can build just about anything on it. This is a very powerful proposition for big enterprise companies that have highly complex and unique needs, and the IT teams to support them.

The problem is that Salesforce’s strengths are also their weaknesses. The core infrastructure of the product is old (it’s part of the reason it’s so stable) and heavy. You can build just about anything on Salesforce, but nothing is easy to build (unless you’re willing to make seven-figure investments into the design, customization, and ongoing management of the product).

This leads to the fatal flaw that exists in most of martech, and accounts for the dissatisfaction with so much tech today (Salesforce’s NPS is estimated to be minus 10) and for the poor results associated with the investments:

The nature of how technology is built forces companies to fit their business processes to the tech application, rather than having the business process drive how the tech application is designed and utilized.

The net result of this legacy approach is greater friction through all facets of the customer acquisition and success processes. We modeled the cost of friction on companies earlier this year and found that most companies are paying a 15-50% friction tax, costing them millions in lost profits and value. If you’re curious about how much friction is costing you, we built a calculator so you can determine the economic impact/ROI of RevOps of your business here

They’re looking to increase velocity and need to be able to iterate, adjust, and align more effortlessly

I wrote about the impact of friction and what you must do to mitigate it in a recent blog post, Sisyphus vs. The Flywheel: 5 Tips to Eliminate Friction

Friction forces you go faster and faster to simply maintain your progress. The problem is that the increase in speed doesn’t translate to a corresponding increase in velocity. 

Your tech stack should be an accelerator, which means that an increase in speed translates to greater than a 1x increase in velocity. Our clients have been able to see dramatic increases in velocity, productivity, and impact after making the shift. Note, these increases aren’t created by HubSpot per se, but by the ability to design and optimize the business process and then to implement HubSpot so that it aligns, supports, enables and accelerates those processes. 

CRM Adoption & Compliance Becomes a Thing of the Past

When done properly, CRM adoption and compliance stops being an issue. To put it simply, our HubSpot implementation makes using the CRM the path of least resistance. It’s adopted not because of arbitrary rules or punishments, but because a salesperson’s job is made easier and more effortless. 

This is a place, where candidly, Salesforce struggles. It’s not their fault really. Salesforce wasn’t built for salespeople or sales acceleration. It was built to delight the VP of Sales with multiple directors/managers who needed to be able to quickly see how things looked across their sales organization, and for the CFO who needed to prepare reports for the board. One of Salesforce’s great strengths is the ability to lock things down and control just about everything. 

The problem this presents for mid-market companies is that the daily and weekly adjustments that need to be made is cumbersome. Sales and marketing execs are forced to work through processes designed by and for IT. And forget about testing sales initiatives, as the time to wind and unwind things is too complicated and takes too long.

Our clients that have switched to HubSpot have seen the time it takes to implement new initiatives (or even adjustments)  fall from weeks to days (and sometimes even hours). They’re also able to provide line managers with more flexibility to adjust, update and optimize the segments they’re responsible for. This, combined with a strong RevOps process, has enabled them to execute far more sophisticated and powerful sales performance programs with little disruption. They’re able to launch, iterate, adjust, and optimize in real-time.

Full Utilization Across the Entire Company

To understand this point, let’s take a step back and ask what should be a really simple question. What is a CRM?

The definition of a CRM is that it’s a customer relationship management database, which means that it will have multiple objects that relate and enable you to store information about customers and prospects. That’s it.

Now, let’s be honest, based on that definition, how valuable is a CRM? 

That answer isn’t so simple. The CRM is extremely valuable because without that database nothing else can be done, but the database itself isn’t valuable because it doesn’t do anything.

So, what is a CRM worth?

Our answer is it’s worth a lot, but it shouldn’t cost anything today. It’s the perfect example of a “ticket to the ballgame.” You need a CRM to drive everything, but it’s an absolute, complete commodity. The value of a CRM is realized through any number of sales acceleration or analytics applications. 

The problem with most CRM pricing schemes (and this certainly applies to Salesforce) is that everyone who has access to the data pays for the access (often they pay the same price as those using the full suite of services) regardless of how they’re using it. This means that companies are forced to incur costs for those who only need to access the basic features, or to make the decision (as many do) not to provide access at all, or worse to share access logins.

With HubSpot, everyone in the company has access to the data and a variety of basic functionality at zero cost. When you have a legacy CRM the trade-off is “if in doubt, don’t provide a login.” With HubSpot, it’s “why would you have doubt, give them access.” This means everyone is working off the same information, and only those people using premium features pay for a seat. 

This has led to significant productivity gains and the ability to have one true customer-facing system of record.

Their tech stacks had become bloated, redundant, and unnecessarily expensive

I’ve reviewed and assessed hundreds of Salesforce instances, and 95%+ fall into one of two categories:

  • Salesforce is used as a standalone product and as a result, it becomes a static storage of data. Some of this data is then synched to other applications (like ERP, finance, etc.) for manipulation and use. The problem here is that because it’s not set up as a sales acceleration or enablement tool, its data is rarely timely, full, and complete.
  • Salesforce is set up as the system of record and is mixed with a series of sales acceleration/enablement applications. I recently assessed on a tech stack where the company was using Salesforce, SalesLoft, Engagio, Drift, Marketo, Vidyard, and more. 

Those companies whose salespeople are using Salesforce typically require that they manage 5+ systems, 5+ databases, and 5+ bills.

I call these stacks “horizontal tech stacks.” They’re heavy, cumbersome, needlessly costly, and chaotic. They lead to data integrity problems, gaps, and redundancies. They confuse their users and lead to growing tech debt.

HubSpot provides the mid-market with the only viable single database solution. The same database can drive your CRM, web content management system, sales acceleration suite, marketing automation, and service/success tool. Utilizing the hundreds of applications available through HubSpot’s App Marketplace enables you to build what I call a “vertical tech stack.” The vertical approach creates a tighter user experience - kind of like comparing a high-performance sports car to my mom’s old station wagon.

The Case for Salesforce

Please don’t misunderstand my point of view here. I am not anti-Salesforce. We have several clients who use it and some are quite happy with it. It’s an extraordinarily powerful piece of software. This post is not intended to be a Salesforce slam piece. If I were a 10,000 person company I’m pretty sure Salesforce would be where I go. 

I should also note that Salesforce does do some things that no one else does as well as they do. What’s more, Salesforce isn’t new. Many companies have built their entire backbone based on their Salesforce instance. In these cases, Salesforce serves a function beyond sales, marketing, or customer success.

In these two cases, it would be a mistake to eliminate them. In both of these cases, were I in charge, I would absolutely stay with Salesforce, and I would utilize HubSpot as well. I shared thoughts on this as well here.

The Bottom Line Difference

In an apples to apples comparison between Salesforce and HubSpot, HubSpot is going to be less expensive. But let me be clear. Do not use HubSpot because it’s less expensive.

My clients have not left Salesforce to save money. They’ve moved to HubSpot because they realize how important it is to implement their go-to-market strategy as seamlessly as possible. They’ve come to understand that success comes from the myriad iterations that are made on virtually a daily basis. They needed a tool that would work for them, rather than having to work for the tool.

I can’t say that HubSpot’s CRM and sales acceleration suite (Sales Hub) is right for everybody, but if you’re serious about increasing velocity and decreasing the effort to drive better outcomes, it’s something you certainly should consider.

successfully-launch-and-integrate-revops

*To my fellow skeptics...let me address those who may be reading this and thinking, “Of course this post is going to highlight the advantages of HubSpot over Salesforce. Imagine is a HubSpot partner and executes (for themselves and their clients) primarily on HubSpot.” Know that I have tremendous respect for skeptics. In today’s noisy, self-promotional world it’s important to understand the motivation reviews like this.

It is true that we are highly focused on implementation utilizing the HubSpot Growth Stack and have made the decision to prioritize HubSpot over other options significantly. 

That, however, is not what is motivating this review. It’s the reverse. The reason we’ve decided to focus so much of our services on the HubSpot platform is simple because we are able to deliver superior experiences and outcomes for our clients by using HubSpot. 

I’d also point out that, from a purely self-interested perspective, the decision to focus so much of our work on the HubSpot platform (especially the work we do in the sales and revenue operations areas) comes at a cost to us. It is far easier to sell sales enablement and CRM implementation services in the SFDC ecosystem than it is (currently) in the HubSpot ecosystem, if for no other reason than it’s much larger and it’s the “standard” approach. 

There’s no question we’ve lost revenue opportunities, but we’ve chosen to go the route of delivering superior outcomes over easier customer acquisition for ourselves. 

This post highlights some of the primary reasons for that decision.

Topics: Performance, Sales