HubSpot's Data Management Challenge

Data is big business. It is the lifeblood of marketing. An entire ecosystem of account data providers empowers ABM programs and outbound sales motions. Every marketing team has a network of data enrichment providers cleaning and enriching different aspects of the marketing database. Sales are no different. Enterprise account teams rely on sales intelligence tools to research the names and job titles of key decision makers within key accounts.

The Contact Discovery Scandal

Consequently, the world initially shrugged when HubSpot announced a contact prospecting tool last week. Sales teams could acquire new names directly from within HubSpot using the data enrichment features bundled with Breeze Intelligence. It seemed an obvious next step for a company that has long had integrated account enrichment capabilities, but who have struggled to upsell customers on paid enrichment credits.

Then a few eagle-eyed LinkedIn posters noticed where the data powering the new Contact Discovery product was coming from: other HubSpot customers. Cue total outrage. HubSpot intended to use job title information entered by one HubSpot CRM customer to enrich the job level and function for all HubSpot customers containing the same contact. They wanted to leverage the profile data entered by their customers to build the prospecting database that was being sold to those same customers. In doing so, they misunderstood the role of a CRM system.

On Monday, HubSpot hastily cancelled the product launch, but the reputational damage has been done. Questions are being asked about HubSpot's entire product strategy, and their relationship with customers. At the heart of the problem is a strategic disconnect. HubSpot is not really a CRM vendor. Sure, their app has a built-in CRM but HubSpot's core product is Marketing Hub, the marketing automation platform. From a vendor perspective, HubSpot CRM is merely a unified data layer which allows the different HubSpot Hubs to access the same account and contact data. That's not customers see it - to them HubSpot CRM is the core product, and the various hubs are the add-ons.

Data Platform vs Technology Platform

This difference matters. Plenty of sales intelligence vendors allow customers to update the purchased prospecting database accessed by all customers. Apollo and ZoomInfo both do this. It's accepted because ZoomInfo is seen as a data vendor, rather than a technology vendor. You purchase their platform to access their data for CRM enrichment and prospecting campaigns. HubSpot is different. It's widely used as a system of record for customer data. Many SMBs use it to manage their sales pipeline. Companies use it to manage their account information.

Data ownership matters, and not just because GDPR says it should. Even before AI, customer data was seen as the foundation of every go to market motion. With AI, good data is a competitive advantage. Customer data shapes market understanding, and enables best-in-class customer experiences. Data even shapes strategy. Before deciding investment priorities, many CMOs seek to map their total addressable market, and rank potential customers by market fit. Contact and activity data is then used to identify purchase intent, and to guide nurture programs. Much of the data used in these programs comes from third party sources, potentially including HubSpot's own data products.

First party data is the difference maker. Every marketer has access to the same third party intent data, and to the same account enrichment vendors. Getting ahead of your competitors requires leveraging web activity data or campaign response data to progress accounts through the funnel. Closing the deal requires tapping into proprietary account information, such as purchase history or CRM relationship data. Ops teams are investing huge amounts of time and effort to improve data quality, and to adapt marketing databases to the specific business needs. Marketers don't want their specific database customisations to be shared with their competitors. It neutralises the biggest benefit of a strong marketing ops team.

The Importance of Infrastructure

A data platform which allows marketers to blend first party and third-party data is essential to marketing success in the agentic age. It's the key reason Salesforce Data Cloud exists, and why Clay has become so popular. Yet, these platforms are very much seen as infrastructure. Hubspot don't want their CRM to be seen as infrastructure. They want to be the AI agent running on top of that infrastructure. In order to deliver that vision, there needs to be a best-in-class data platform to store the information powering those agents. For a vertically integrated vendor such as Hubspot, that infrastructure needs to be the built-in CRM.

For marketers with complex data needs, a built-in CRM isn't flexible enough. It doesn't allow for deep customisation, cross channel orchestration or complex data management workflows. Increasingly, B2B marketers are looking to mirror the headless marketing automation trend seen in B2C. Introducing a dedicated data tool allows for bespoke data enrichment workflows, or AI assisted audience selection that blends profile and activity information. The benefits are enormous, even if the downsides are just as significant. Such capabilities require a more complex tech stack and a radically different cost model. B2B marketers are still adapting to the required changes. If they do, Hubspot’s vertically integrated product strategy may become untenable.

HubSpot Acquires Warmly

HubSpot are buying Warmly, a website visitor identification and intent data provider. HubSpot have an intent data offering as part of Breeze Intelligence, which has struggled due to cost and data quality concerns. Warmly's person-level intent will expand their intent coverage, making it much more viable.There is an AI angle too. Warmly have a pair of sales agents that overlay CRM data with the Warmly intent data. These duplicate HubSpot's own agents, but will influence the HubSpot roadmap.

Salesforce Acquires Intercom

Salesforce are buying Intercom, who are best known for live chat software for service teams. The Intercom product has long had a strong chatbot builder, which means both sales and marketing teams also use the product. More recently, the company has focused on 'Fin' their customer service AI agent. The industry leading web chat tech is probably the real interest though.

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