Back in March, HubSpot launched a new pricing model to help customers optimize their spending.
The new pricing model removed the minimum seat requirement for Service and Sales Hubs. It also introduced the option for “Core” and “View-Only” seats.
Core seats enable users to edit data within the purchased Hubs. They also grant access to cross-Hub AI capabilities and connect teams via HubSpot’s Smart CRM.
Meanwhile, View-Only seats do what they say on the tin: enable visibility across Hubs. For many CRM users, that’s all they need. They don’t require the ability to edit data and leverage the AI features available to “core users”.
As such, by offering unlimited View-Only seats for free, HubSpot customers can allocate “Core” and “View-Only” seats based on roles and responsibilities to cut costs. After all, they no longer need to pay to give every user a seat.
Another benefit is that more business users can access HubSpot for free, meaning the business can democratize CRM insights.
Nevertheless, focusing back on the pricing model, some questioned the move. After all, wouldn’t it lower customer spending?
Seemingly, that has proven to be the case, with average subscription revenue per customer down two percent year-over-year (YoY).
However, the change in pricing model has, ultimately, made HubSpot easier to buy and grow with.
Therefore, HubSpot remains confident that the move will be worth the short-term subscription loss, as the CRM giant will make up for it with more customer wins in the long run.
Indeed, during the company’s latest earnings call earlier this month, Kate Bueker, CFO of HubSpot, restated her confidence in the pricing plan before declaring:
My expectation for net [customer] adds in the back half of the year is 9,000 to 10,000 per quarter.
Net customer adds is finance speak for the number of customers a business adds to its customer base over a 12-month period – and 10,000 is an impressive number.
If HubSpot can achieve this, it may further bolster its revenue growth, with the CRM stalwart already reporting a 21 percent hike in its YoY earnings last quarter.
Yet, Yamini Rangan, CEO of HubSpot, kept the pricing conversation customer-focused. She said:
Overall, we continue to have high conviction that the pricing change is the right decision for our customers and, therefore, for HubSpot.
If HubSpot can successfully build on its flourishing base of 228,000 global customers – hopefully – it will inspire many of its CRM rivals to make similar pricing changes.
Of course, each is in the business of making money and may perceive this to be a risky strategy. However, the pricing shift is seemingly a positive way for CX vendors to demonstrate their commitment to their own customer experiences.
Elsewhere at HubSpot… Multi-Hub Is Building Momentum
During HubSpot’s latest earnings call, Rangan also doubled down on HubSpot’s long-term strategy to become a complete customer platform for scaling companies.
“When we sit on that strategy, we said that we’re going to build a best-in-class engagement hub,” stated the CEO.
“But, most importantly, we’re going to build a platform that unifies data insights across all those hubs. And, if I were to point to one thing that you’re seeing in the last few quarters, it is the multi-hub momentum.”
As an example of this momentum, 45 percent of HubSpot’s new business in its Pro+ tiers came from customers using three or more hubs last quarter.
Meanwhile, Rangan also highlighted how an uptick in multi-hub deals with upmarket customers – which want to consolidate their tech stack – enabled “larger wins in Q2”.
That strive for consolidation comes as, historically, businesses have acquired several point solutions to connect their CRM strategies. From these solutions, they’ve struggled to integrate data and control costs.
For this reason, HubSpot – like Salesforce with Einstein 1 – is building a narrative of creating an ecosystem where its CRM hubs can interact and thrive.
As Rangan concluded: “The power of HubSpot is not just in a specific hub. It’s really in the insights we deliver across multiple hubs in the platform.”
