OnDemand WTP Pricing Research

Pricing Strategy of HubSpot: The Inventor of ‘Inbound Marketing’ | Pratham Mantri

Pricing is the center of any business. It is everything you do from your copy writing and marketing to your product and support works to drive people to your pricing page and justify the number you’re charging.

Pricing isn’t hard, it’s a process. Let us walk through the SaaS pricing pages of one of the biggest SaaS companies to see how pricing has been influential to their success.

First up, we have the marketing automation behemoth that’s considered to be one of the fastest growing SaaS company in the world right now: HubSpot. This orange machine practically invented the concept of “Inbound marketing” and sells a software platform that helps you do everything from manage and track your SEO traffic to create workflows and drip campaigns for your leads. They have some of the best SaaS pricing out there for their price level.

Let’s review HubSpot’s pricing strategy:

The pricing challenges HubSpot faces

HubSpot’s software is a platform that allows you to do a multitude of things, from manage your content to track and manage your marketing funnel. It essentially pieces together everything you need to manage your non-paid marketing.

The very nature of this type of product presents an interesting set of problems when formulating a pricing strategy.

  1. Takes a long time to get value: The product’s time to value ratio is exceptionally large, meaning you can’t just buy an instance, install, and immediately start seeing results – someone or a group of people need to be using HubSpot pretty aggressively to start seeing dividends. Pricing Implication: Having a sales person free sale in this instance is hard, because you have to sell the vision, not just the features. That makes pricing complicated, because for a sales person laden sale you need a high value MRR – a tough chicken or the egg problem.
  2. Not one specific buyer: Although HubSpot defines their buyer personas in exceptional detail, the open ended nature of the product means that practically any company interested in marketing is technically a potential buyer. Pricing Implication: There’s always a good group willing to pay much more and there’s a good group not willing to pay as much. Additionally, picking the right customer personas is an awful game if done by guess and check. Remember – buyer personas are one of the central tenets to proper pricing.
  3. Marketers can be finicky: Marketers are not the easiest to please. This means they don’t want to pay as much and they want as close to guaranteed success as possible to get the proper ROI. HubSpot grew through a process of needing to train the market in an era where database marketers were still dominating. Pricing implication: “Training” a market costs big bucks to make sure you have a loud mouthpiece. It also makes packaging exceptionally hard, because once someone knows how to use a tool or fill their funnel with a process, they aren’t always ready to move somewhere else.

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Pricing Strategy of HubSpot: The Inventor of ‘Inbound Marketing’ | LinkedIn.