I think that Hubspot’s digital marketing blog has some great information and I try to read as many as possible. I would say that it is the overall highest quality blogs on this important and evolving topic. If I could only read one source of information on digital marketing, I would choose this one. This morning’s post on goal setting helped me take a fresh look at an old familiar issue.
By all reports Hubspot is a great organization with a well-respected service. Their pricing appears to start at $3,000 for the first year and could easily run $10,000. That entry point is above the entire annual budget for digital marketing for most of the small businesses I serve. It is certainly above my own budget.
I’m known for, and often criticized for, suggesting that the money spent for marketing related items needs to be justified in terms of current cash flow and likelihood of future revenue. Expenses for branding, networking, social media, and traditional advertising can sink a small business is not conducted in proportion to manageable financial rations. As a starting point for many Main Street businesses, I might throw out a figure of 10% of gross revenues as being a sustainable figure for marketing. Take that 10% and break it down into the various costs of marketing and we might conclude that 3% of sales can go toward digital marketing.
We know from census data that the median U.S. small business of sole-proprietor professionals had a sross income of less than $100,000 last year. In most years that describes my own business. That means that the entire appropriately sized digital marketing budget of a typical small business would be consumed by Hubspot’s minimal fee. That doesn’t leave any room for other service that might help test and diversify the digital marketing strategy.
Another even most important point is that a service like Hubspot involves significant business risk. There is a high risk that the service may not produce the results you expect. All small business marketing projects carry this inherent risk. Of course you won’t find Hubspot sales (or any other sales person) saying this, but you’ll ave no trouble finding third-party evidence of failed marketing efforts. Just to put some number to this discussion, there might be a 1 in 3 chance that your business will be $10,000 worse off a year from now after working with Hubspot than if you had simple not engaged in this type of digital marketing. Similarly there might be a 1 in 3 change that your business will be significantly more profitable, and a 1 in 3 chance that you covered your costs but didn’t really see any explosive growth to set excited about. Those are representative of results that I hear and read about real life digital marketing experience (for the market overall, not necessarily from Hubspot users) reported by small businesses. This is a risk that we should not ignore in our business planning.
When you factor in the need to plan for the possibility that digital marketing may not be a positive return on investment in the short and intermediate time frame, the pool of businesses whose financial planners should endorse this strategy shrinks even further. I presume that we are now talking about less than 10% of small business that should consider Hubspot as part of their business plan.
My point is simply that while Hubspot may well be a great service, their target market is apparently not my practice, nor most of my clients, nor the majority of small businesses actually in operation.
Earlier this year I wrote that I resolved to take a different approach by partnering with or subcontracting with rather than hiring firms in the digital marketing world. For a small practice like mine, a partnering approach is the only strategy that makes sense. I’m sure that I’ll have more to report on the outcome f this alternate approach later.