HubSpot’s Product-Led Sales strategy: Layering outbound and inbound motions

Discover HubSpot's go-to-market strategy, a Product-Led Sales motion powered by a combination of outbound and inbound channels to scale self-serve revenue.

David Barron
April 14, 2023
HubSpot’s Product-Led Sales strategy: Layering outbound and inbound motions

Alexa, CEO of Pocus, hosts Product-Led Sales (PLS) “Ask Me Anything” sessions with PLS experts to share best practices, frameworks, and insights on this emerging category. These AMAs are an opportunity to ask PLS leaders any question — ranging from hiring to sales compensation to tech stack — in a low-key, casual environment.

The PLS AMAs are for members of the Product-Led Sales community, the place to learn, discuss, and connect with go-to-market (GTM) leaders at product-led companies. The goal of the community is to bring together the most thoughtful and innovative GTM leaders to build the next generation of sales together.

Interested in joining? Request an invite here.

Now, keep reading to discover HubSpot's go-to-market strategy, a Product-Led Sales motion powered by a combination of outbound and inbound channels to scale self-serve revenue.

New to the world Product-Led Sales? Learn the basics here.

Meet David, Global Director of Sales at HubSpot 👋

David Barron’s path to Global Director of Sales at HubSpot has been a bit, in his words, “atypical.”

David first began his career in pharmaceutical sales. Quickly realizing tech was his passion, his next move was to co-found an agency, which gave him experience working with engineers as a product and project manager.

In 2014, David was recruited to join HubSpot as their first sales hire to monetize their customer relationship management (CRM) using a freemium model.

Since then, David has moved between the product and sales functions at HubSpot building exciting new products from 0 to 1. His current role in sales gives him the opportunity to sell the products he spent years building and launching.

In this recap of our AMA with David, we’ll hit the high points of our discussion, including:

  • How to establish a smooth sales + product feedback loop
  • The best way to identify product-qualified leads
  • HubSpot’s sales model and acquisition channels, and how they decide in which to invest
  • How to outbound in a way that doesn’t feel spammy
  • Tactics for boosting retention, velocity, and ACV

Establishing the sales + product feedback loop ➰

In a PLS motion, the product team is a pillar that absolutely needs to be involved in the sales and marketing workflow.

Having spent time on the product team, David saw firsthand how salespeople and product teams interact. He noticed a pattern that was causing the teams to talk past each other - sales comes to product with a solution rather than a set of problems.  

He believes that shifting sales focus from proposing solutions to clearly and concisely articulating customer problems and needs, leads to a more effective feedback loop with the product team.

Here’s how David coaches sales folks to stay sharp at this part of their job:

If a sales rep starts to notice a theme where a common complaint is costing them deals, then they…

1️⃣ Start a simple document to record blurbs from customer conversations that highlight common problems and how much money is being left on the table from lost deals because of this issue.

2️⃣ Hand their documentation off to the product manager or other product team leadership for discussion.

The goal is for sales to gather all the resources to help the product team understand the problem. Then, let product figure out the solution.

Oftentimes, the job to be done is much more complex than initially expected. Sure, the solution could be a simple button, but it could also be worlds more complicated.

That determination shouldn’t be up to the sales team or even the go-to-market team. Their job as far as the product goes is fueling the feedback loop with detailed descriptions of customer needs.

“Henry Ford famously said about the Model T that if he had asked people what they wanted, they would have said faster horses. I think that kind of thinking happens a lot with SaaS and PLG companies where the assumption is the quick fix is the right fix."

Nailing high-quality leads for the sales team

For David, getting the best leads to sales is all about experimentation.

At HubSpot, the RevOps team put a form link in product-qualified leads (PQLs) email alerts. Adding this step to the sales process allowed reps to leave feedback on how qualified they found that PQL to be and the level of quality overall. If the go-to-market (GTM) team gets enough feedback that a certain lead type is no longer working, it’s turned off and replaced with something else, often suggested by sales.

To level up how sales actions the PQLs they’re sent, HubSpot’s PQL emails also include a video showing what the lead did within the product, sales copy, a value prop, and information about the company.

This eliminates decision fatigue for the salesperson who is going after hundreds of different types of PQLs. They can take the playbook they’re given and hit the ground selling.

The layers of sales motions at HubSpot

HubSpot's sales model: inbound self-serve and sales-assist
Two inbound paths: self-serve and sales-assist

We learned from David that growing a successful, lasting business requires a hybrid mix of motions. In HubSpot's case it looks like this:

📥 Inbound sales guided by a product-led approach: organic content, paid acquisition channels, and freemium products(s)

📤 Outbound sales efforts that often act as awareness campaigns

“We as a community have adopted this mindset that everything has to be PLG. But it takes a lot of cash to build a legitimate PLG motion. Don’t forget that B2B sales still works. Being an enterprise sales company is okay if it’s right for you.” 

Content-led sales

From 2008, when HubSpot was founded, through about 2014, HubSpot’s sales motion was content-led inbound marketing. They built tons of quality content, enabled people to interact with it, then had sales follow-up.

Content is still impactful to HubSpot today. David recommends SaaS businesses focus on building their content and keyword strategies. There are keywords HubSpot has been ranking for over a decade because their domain authority is so strong. This provides another growth lever whenever they launch something new.

Product-Led Sales

HubSpot’s evolution to a hybrid sales motion by offering their first freemium product, their CRM, took about two and a half years. When it launched, they started experimenting with Facebook ads and other paid acquisition channels.

Freemium products and paid advertising continue to be their main customer acquisition channels, with more than 70% of their customers coming in from self-serve.

Outbound sales to boost awareness 

To supplement their freemium sales-assisted motion, HubSpot also has a large business development rep (BDR) team doing outbound sales. In fact, they’ve always done outbound sales — despite their reputation as being inbound-only in the early days. 

David thinks of outbound sales as awareness campaigns to boost their product-led growth model. BDRs get your logo in front of people over and over again through LinkedIn, email, etc. Almost like a billboard but more modern and effective.

How to do outbound that doesn’t feel spammy 🤗

We’ve all experienced outbound sales tactics that feel spammy.

Here’s David’s framework for creating a differentiated outbound strategy that adds value without annoying prospects. This advice can also be applied to community, if that is a channel in your mix.  

Add value at the source

Start thinking about outbound as adding value for your buyers where they already are.

Sometimes that’s going to be through classic outbound channels like LinkedIn or a newsletter, but there are also communities that are hosted on Slack, Reddit, in-house, etc. Find where your prospects are and focus your outbound efforts there.

David says people have a BS detector that goes off the second they realize 1,000 other people have gotten the same sales email or that a community has turned into a hard sales funnel. If the value doesn’t outweigh those red flags for them, they’ll disengage.

How do you make sure you’re helping and not just selling?

  • Education: Provide your prospects with resources that are relevant to their jobs and pain points.
  • Research and personalization: Spend time researching to craft messages that are specific to your prospects’ company, job, and industry. Tie what your product does well to what your prospect needs — in their language.

Personalization > productivity 

Hyper-targeted messaging is the surest way to avoid giving leads the ick with outbound sales.

David says he’s “pretty allergic” to quantity-based goals like "Make 500 sales calls this week" or "Add 50 people to the community every month." Instead, he emphasizes that sales leaders should prioritize outreach that’s personalized and high quality.

For tips on personalized outbound messaging, check out Maggie Hott’s 10-80-10 framework for cold pitches in the Product-Led Sales Playbook Vol. 2.

Identifying where to invest in acquisition

How do you decide which acquisition channels are right for your organization, and when it’s time to layer up or move on?

David relies on business goals and experiments when deciding where to shift and invest.

Goals

When it comes to deciding the right level of investment and mix of acquisition channels, the first step is thinking through your company’s strategic goals by asking questions like:

  • What do we want to accomplish in the next three to five years as a business?
  • What are the products and personas (ideal customers) we want to focus on?
  • Where are these personas?
  • How do we reach and add value for these personas?

Experimentation 

As for experimenting to identify which acquisition channel to fully invest in, HubSpot calculates the customer acquisition cost (CAC) to lifetime value (LTV) ratio - CAC:LTV.

They set a bar, depending on their revenue goals, for how much return they expect from each channel. After allocating budget to each, they let the experiments run for two to three months. After that, they turn off anything that doesn't line up with the return they expect for every dollar spent.

For example, when David was working on the Zendesk competitor, Service Hub, they noticed that return on ad spend was abysmal because of Zendesk’s domination in the space. It didn’t take long for them to realize that paid ads wouldn't be an acquisition channel for that product.

CAC:LTV ratio calculation

Learn how to calculate CAC:LTV and 12 other important product-led growth metrics here.

Want more retention? Create more value 

Low retention is a problem a lot of PLG companies face.

Why?

According to David, it’s often because there's just not enough value being provided across the entire user experience.

Regularly creating value and then expanding it over time will help with retention.

For David, that means understanding not only why new users sign up but the next task or job they’re going to want to do — and then surfacing that in a relevant way in the product.

“Consistent value and then expansion of that value over time is the key to retention for PLG companies.”

Using product signals to improve the customer experience

HubSpot’s business model relies on product usage signals to gather clues on the best next step for customers so they can expand value and prevent churn.

David says they run constant regression analysis on top customers based on spend and how quickly they added spend. They look for the first action these customers took and then what they did next. At this point, when someone buys a product from HubSpot, they can guess the next product they will buy with 98% certainty.

This information is surfaced to sales and marketing so that all the communication customers get is tailored to get them to that next product.

To apply this to your own use case:

➡️ Look at your customer base.
➡️ Single out who upgraded the fastest.
➡️ Identify the first action they took.
➡️ Run experiments to try to get similar users to take that same action, so you can predict and deliver what they’ll want next at scale.

That first action will change over time. At HubSpot, right now, it’s creating a deal in the CRM. That has become the North Star activation metric their product growth teams focus on when crafting the onboarding and product experience.

Caveat: Not all SaaS products have the high volume of users required for this type of historical analysis to be statistically significant. If you don’t have the amount of product usage data HubSpot has, you can begin defining activation signals for your PQLs by taking a more qualitative approach.

Through conversations with your sales, customer success, and product teams, identify hypotheses for what a “good” customer is for 1) customer firmographic data 2) product usage data and 3) buying intent. From there, test and iterate!

Learn how to define and identify PQLs.

Tactics for revenue growth: Increasing velocity and ACV

David shared a few achievable tactics for PLG SaaS companies looking to increase metrics like annual contract value (ACV) and velocity.

Create bundling opportunities to increase ACV

HubSpot has realized that building more products is an efficient way for them to drive revenue, increase enterprise conversion rates, and increase ACV through bundling.

You’ll be able to command a marginally higher price through a bundle of products versus a single product when selling to economic buyers who think, “For only a little bit more, I can get all of this."

With multiple products, you can create almost infinite opportunities to upsell and cross-sell through your install base, hence growing ACV.

Speed up the sales cycle by optimizing for efficiency

Look at what your salespeople are doing and figure out what you can automate.

David did this back around 2015 at HubSpot. Before automation, reps would get PQL emails and then have to schedule calls with leads who looked promising. After automation, PQLs got an email from HubSpot containing reps’ calendar links so they could set up calls themselves. The day they started doing this, reps had 12 half-hour meetings a day for three weeks on their calendars.

David says that at HubSpot they’re always looking for ways to make things more efficient at all stages of the customer journey — so that their freemium sign-ups are getting the information they need to buy self-serve — or they're getting a sales-assisted touchpoint with someone on their inbound sales team as soon as they need.

Learn more in the Pocus community 🔮

In the Pocus community, you’ll get a chance to connect with PLS and PLG pros from businesses like OpenView, Slack, Notion, Asana, Atlassian, and dozens more. 

To participate in our next AMA and get your burning questions answered, request to join the PLS  community today. 

Become a member and enjoy the only Product-Led Sales community full of first-hand knowledge and advice from product-led GTM leaders.

David Barron
Global Director of Sales at HubSpot
Keep Reading
Introducing AI Prospector

Streamline your prospecting workflows with the power of AI.

Sandy Mangat
June 5, 2024
Introducing Website Visitor Tracking

Add a new source of high-intent pipeline to your GTM motion. Track website visitors as a key signal in Pocus.

Sandy Mangat
May 8, 2024
How Linear is moving upmarket with signal-based playbooks

Learn how Linear is using signals to move upmarket, increasing their average deal size by 30%.

Meredith McManus
April 29, 2024
Product-led insights delivered.

Get best practices, frameworks, and advice from top GTM leaders in your inbox every week.

The Revenue Data Platform for go-to-market teams
Schedule a call with a GTM specialist to talk about your GTM motion, goals, and how Pocus can help turn product data into revenue.
Join the #1 place to learn about PLS and modern go-to-market strategy
Join our invite-only Slack community to learn firsthand from experts who have built and scaled hybrid revenue engines and connect with peers who are just figuring things out.
See how Pocus combines product usage and customer data to get a 360° view of your hottest opportunities.
Take the product tour