Hold on a second…why would HubSpot founder Dharmesh Shah want to stop growing sales and marketing? Doesn’t he want to make more money?
Up until last month, HubSpot would hire 3 new sales reps a month to drive the sales velocity, to drive the sales growth - which required marketing spending to drive more leads and produce content. We put that to zero and said “we are not going to grow sales and marketing anymore. Period.
Doesn’t every business want more customers?
Dharmesh even knew he’d be making less money.
We had to convince a 60 person sales team that we’re not growing sales/marketing. We’re not going to grow marketing the company, the board, the investors - a bunch of people. We’re going to take a hit next year in terms of revenue projection.
What is going on here?
I had a company meeting about a week ago where we announced some of this new news and what I said was that, we don’t want to focus on making customers happy
Huh? A company that knows it will take a revenue hit AND doesn’t want to focus on making customers happy!
What had triggered this abrupt change of strategy at HubSpot back in 2011? Because this is probably sounding a little crazy right now.
Here’s the why. It turns out there had been an interesting observation:
“The other thing that was not obvious to us was there is a difference between making customers happy and making happy customers.”
What’s the difference?
Making customers happy leads to having to be reactive in supporting customers who already have expectations set by marketing and sales.
That is not the right answer…It’s not something you do after the fact and say, “Oh, we’ve got these customers - now what do we do to make them happy and keep them happy?.
Instead producing happy customers is a function of everything the company does and everyone within the company is a contributor to customer success all the way from marketing to success.
Everybody in the company needs to be thinking about, “Is what I am doing contributing to the raw goal of the company?” - which is to manufacture happy customers. Don’t think about customer happiness as a subsequent thing that product and support worry about. Everybody should be thinking about producing happy customers.
So what did HubSpot do instead?
Simply, they invested everything in aligning the company around producing happy customers.
We’re going to take all the cash we would have spent on sales and marketing, and we’re going to pour it into product and into experience. And we think that’s the right thing to do.
They went a step further than just putting money into the experience too. Importantly they created a single way to measure the impact of producing happy customers:
The Customer Happiness Index
Having a single number for measuring customer happiness across the company also makes it very easy to see the impact any individual or team is having on producing happy customers.
And as Dharmesh puts it in this awesome 2-minute video, it’s everybody’s job to produce happy customers.
Spoiler Alert: Investing in producing happy customers worked. HubSpot has grown from its 3,200 customers in 2011 to being a global powerhouse valued at more than $26 Billon in 2022.
How to produce Happy Customers yourself
From marketing to sales to customer success treat every interaction as an opportunity to:
- Discover customers desired outcomes.
- Set expectations around the outcomes we are a good fit to help customers achieve.
- Create alignment both internally and externally on the path to achieving those outcomes.
Discover → What are customers trying to achieve?
In other words, what will be a success for them with our product? Don’t know this? Ask.
Set expectations → It’s impossible to be the best fit for everyone. Be honest and upfront about who you are most confident helping achieve the outcome they want.
Create alignment → What’s the next step?
Nail the three steps and you’ll have more strategic conversations across your internal teams and more influence on your customers’ success and happiness.