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- [00:00]
Jeff Petowitz
Nobody likes getting rejected. It's like, well that's not a nice weather. Like we've never been down tiered before. What's up with that? The market has changed so much too. We had spent years being agnostic and working with a lot of other partners and I think during that time some of those other partners really did not continue to make the investments in their platform that HubSpot has.
- [00:21]
Sarah McDevitt
Today's guest says that when it comes to upmarket, HubSpot has closed the gap fast, maturing our platform significantly and delivering on the depth and flexibility that sophisticated customers expect. Jeff Petowitz is the founder of the Petowitz Group, a revenue marketing consultancy that has been helping enterprise companies modernize how they drive growth for over a decade. Last year, after getting down to eared in HubSpot's partner program, Jeff couldn't walk away. He instead he doubled down. Why? Because he saw what many upmarket partners are only realizing now. HubSpot is ready for the enterprise space. I'm Sarah McDevitt and this is owning the outcome. Jeff, welcome to the show.
- [01:13]
Jeff Petowitz
Thank you Sarah. Really happy to be here.
- [01:15]
Sarah McDevitt
So Jeff, can you tell me a little bit about the Petowitz Group? A quick overview of the business ideal customer and the journey would be fantastic.
- [01:24]
Jeff Petowitz
Well for it'll be 18 years this July. Can't believe. Gosh, it's, that's a long time to be doing this. But in that entire time we have existed to help marketing turn from being a cost center to being a revenue engine and helping enterprise sales and marketing organizations build scalable revenue engines in a digital world. So we, we create demand, we have a full agency capability, content, video, SEO, brand. We in addition of course to HubSpot which we love, we work across the martech landscape and really help clients with their architecture, their systems, figuring out how to get all this stuff to work together the right way and then we help execute. So we have a global team both nearshore and offshore as well as here in the states that we help scale. And yeah I can honestly say when I first started I had just left Eloqua, I was employee number 32 there. I did not have grand visions of building a great company. I just loved this whole new space of marketing automation and demand gen and I thought after being in software at that point I was already in software for 10 years. Maybe I can get off the road and our family was young, maybe learn how to play golf and just have a nice lifestyle. The first month didn't get a call, didn't have any customers Beginning to really rethink whether or not I was doing the right thing. And then the phone started ringing and it hasn't stopped ringing.
- [02:42]
Sarah McDevitt
Likewise, I'd love to get a sense of your journey as CEO. What motivates you to deliver Excell for customers and to continue to grow the company?
- [02:51]
Jeff Petowitz
Well, I think first and foremost, I mean, I just love what I do. I don't think, I guess you could be a leader or CEO, but it's really hard to be show up every day, lead and inspire people if you're not passionate about what you're doing. It's really been that passion. I, first of all, I love consulting. I love being able to understand how every business runs. I particularly enjoy our manufacturing customers. I could watch their plants for hours. I had a frozen pea manufacturing client years ago and they had this conveyor belt that's going along and a laser beam would knock out the pee if it was a micron too big or too small. I thought this was the coolest thing ever. I watch it for an hour. I get, Jeff, we got to get back to work. Wait. I love technology, I love sales, I love marketing, I love business, and I love helping people. And so that really, I think propels me. You know, my journey as a CEO has not always been perfect or kind or easy. I've made a lot of mistakes along the way. I do wish when I had first started out, I would have joined one of the professional programs I've been in now, like I'm Envisage and several others, because I probably would have made a lot less mistakes and kind of learned from, from my peers. But that's also part of the journey too. I'm not a person that really looks back with regret. I think life's a series of choices. We learn, we become who we are. I'd say over the years I've really learned how to listen more, trust the team more, and realize that being a CEO is never really about me anyway. It's really about the team and it's about our clients and being there to serve them in the best way that I can.
- [04:22]
Sarah McDevitt
Speaking of who you are, you were a partner since 2014, but last year you were down tiered. Then you came back and you said, what, going to get serious? Why not walk away? What was it that made you double down on HubSpot?
- [04:39]
Jeff Petowitz
First of all, like, nobody likes getting rejected. It's like, well, that's not a nice letter. Like, we've never been down tiered before. What's up with that? The market has changed so much too. We had spent years being agnostic and working with a lot of other partners, and I think during that time, some of those other partners really did not continue to make the investments in their platform that HubSpot has. We have historically served kind of like that mid market, enterprise market. And for years, like, We've always loved HubSpot, but it just wasn't, you know, it wasn't the right fit at that time for our clients. So we were just focused more on the technology serving them. And I'd say really over the last two to three years, HubSpot has really made significant strides, you know, starting with really bringing in sales, hub and CRM capabilities, improving integrations, improving the ecosystem. There's just been a number of changes and in conjunction with that, we've had our clients come to us and say, hey, this vendor is getting really expensive. Are there alternatives? We're not getting full utility from this. And so they were seeking and asking us to look at alternatives. So I think it's a combination of all those things really. We're coming together to say, hey, you know what, they have a great partner program, the platform's really coming along, our customers really seeing a fit, let's double down. And you know, and then we were able to snap back. So, I mean, I think it's a great story. It's really a testament to our team again, because they were very passionate about driving this as well.
- [06:06]
Sarah McDevitt
Yeah, but Jeff, as a, as a great friend of mine said, hope is not a plan, and you clearly had a plan. So what did that look like and how did you move so fast on the plan?
- [06:16]
Jeff Petowitz
Well, we did have several enterprise clients that, that had again started to talk to us and now we've always been agnostic, you know, and, and, but when they were coming to us and they're like, look, whether it was Adobe or Oracle or Salesforce, because a little bit of all of them, right, they're like, hey, we're thinking about moving. What do you guys think? And so we had identified those enterprise customers, we had Talked to our HubSpot partner rep and we're like, hey, we think these would be good candidates and we'd like to set up some demos and let's show them what they can do. Now, they were all a little bit different in terms of, because they were moving, all moving off from different platforms, they had different needs. But we were able to really consultatively work together with HubSpot to set up the right demonstration, the right use case to show each specific enterprise client. And because they were enterprise, I mean you're talking about, I think all three of them were close to seven figure ACV deals. And so that just being able to get a couple of enterprise opportunities versus we would have probably had to bring you 30 to 40, you know, SMB clients for one enterprise to get to the same tier. So I think that's what really drove that.
- [07:28]
Sarah McDevitt
You've always kind of though been on the edge of innovation when it comes to upmarket customers. And in the past, you know, more sophisticated customers I think believed that HubSpot wasn't complete enough in terms of a solution for their business. But that is changing. Customers are coming to you for faster implementations that are easier and have a more unified solution. So during this kind of AI first error, have you, you know, what gives you the confidence that HubSpot is sophisticated enough for the needs of those customers? What, what's shifted in your opinion?
- [08:01]
Jeff Petowitz
Well, look, I mean it's still growing and it's still, I, I won't, I wouldn't say that I'm going to give HubSpot tens across the board because when you talk about enterprise capability, whether it's multilingual, multi currency, multiple partitioning, advanced integrations, advanced data, advanced lead scoring models, I mean there are areas of opportunity. But you know, at the same time the sheer usability and the quick adaption that HubSpot's deploying counters that because, and then, and every day there's less and less workarounds combined with the growing ecosystem and plugins. So there are multiple ways to address the issue while still keeping the overall cost footprint low. Because even all in for an enterprise customer to buy every single hub and have a significant size database, they're still going to be at 50% or less of the cost of most of the other leading competitors. And so then, okay, if you have to go out and get a plugin to do one specific area to close the gap, then it still works. So I think, I think that's really, you know, the confidence that we've had is watching the platform quickly grow while not losing its usability. And I think the big difference that we've seen with HubSpot compared to almost all of its competitors is almost everything has been built natively by design within the platform. And that thoughtfulness, right, that planning really makes it so much easier to, for, for people of any, of any skill level to come in and use the platform. Every software company struggles with adoption of its user base. You know, whilst trying, you're trying to balance out, gotta add more features, gotta Build the roadmap, gotta try and add more. And you want customers to buy more, understandably, but how do you get them to use more? And so I think more than any other platform, HubSpot's ongoing usability, while adding in a significant amount of of capability is unmatched. You know, Salesforce has made outstanding acquisitions over the years and it is a powerhouse, but underneath they're not integrated. Even still, like, you know, even with a marketing cloud as good as it is for orchestration, it's not natively integrated in with a shared data model. Adobe buying Marketo never really integrated in with the rest of the business suite user interfaces, but the way that HubSpot's going about it, because for any given task you need one less hour or one less person in HubSpot than it would take in any other competing platform.
- [10:41]
Sarah McDevitt
So what I'm hearing from you, Jeff, is I'm hearing fast, I'm hearing easy and I'm hearing unified. And they're all things that I like to hear when it comes to talking about HubSpot.
- [10:51]
Jeff Petowitz
Yeah, I would agree with all those things.
- [10:53]
Sarah McDevitt
Let's talk a little bit about AI and how you're approaching it. So in terms of your services, how much your business would you say is now focused on driving AI transformation for customers?
- [11:04]
Jeff Petowitz
Once you start getting down into mid market and SMB, everyone wants to be able to use AI. They think about the potential of AI, but they almost don't know where to start or thinking about how to really move into sophisticated use cases. I'd say 25% of the market still can't even spell AI. They haven't literally done anything. They're not experimenting, they have nobody using it. You got about 25% that's sort of out in front. They're actively using it and agents will represent the future. But the reality is there's still a big gap between the potential of agents and promise. The hardest part right now is almost every software company, including HubSpot, is working to get AI embedded within its application in one way, shape or form, which is great. But the challenge is every company has multiple software applications. The interoperability to have systems work together with AI agents is still a big, big gap. What most people are using AI for now is definitely content generation, meeting, transcription, research, deep research and proposal writing, analysis. And those are all great things. And that will give any company an initial boost in productivity, 20 to 30%. But when you start moving into, hey, I want to create an agent for building a campaign brief, I want to build an Agent for building out a nurturing program. I want to build an agent for setting up a qualification sales process. These are where the gaps are today and it's businesses don't know what they don't know. So trying to help them even get to a point to think about the use cases they need to do and get them into a sequence. There's still a bit of a resistance there. And so with all the talk about AI, I still haven't seen the investment yet on the customer side that's meeting that need. But it will change, but not yet.
- [12:58]
Sarah McDevitt
What about Jeff, closer to home? When it comes to embedding AI into your own business and operating model, how are things shifting internally and how are you leveraging it for efficiencies and profitability?
- [13:12]
Jeff Petowitz
We've used it in literally every department over the last three years. And so we've reduced our own software spend by over 200%. We've gotten rid of over 30 different applications because we've been able to AI enable our processes in accounting, in HR, in sales and marketing and in delivery. So that's one. I mean we significantly reduced our software footprint. And of course being in tech, we love software. Like we can't get enough of it, we like to play with all the toys. But it was getting to a point where this is getting ridiculous for how much money we were spending on software for our SRS as a company. So that's one. We are actively using AI to support our delivery process, transcriptions, analysis, data handling, presentation, helping with code development and systems. On the copywriting side, it really is client dependent because we have many clients that are in financial services or other significant compliance industries and while they might be using AI, they absolutely do not want us using AI to create content. So there is very strict rules that we follow and we respect that. And then we have other clients are like, you know what, as much as I'd love for you guys to generate this all, naturally my budget just got cut by 75%. So I'm okay if you guys, you know, I want a human looking at it, but you know, I'm okay. And then it's a bit of a continuum. We're using it for developing code, we're using it to help build out integrations, we're using it for data analysis, we're using it to help build presentations, not as a replacement for it. So when I say that we're using it, that doesn't mean we're using AI instead of a person. We're using it to support and augment the process so that each person can spend more time where they should with our clients being more strategic.
- [14:55]
Sarah McDevitt
And you kind of alluded to this earlier, but we all know that AI really is only as good as the data that powers us. And I'm hoping you might give me a little peek behind the curtain here, Jeff. If there's an implementation you're working on for a customer, we where you kind of got into it and realized the data hygiene or data quality was going to be a problem, I'd love if you maybe could give me some details on how you navigate that complexity.
- [15:18]
Jeff Petowitz
My career in marketing now is over 30 years. I have yet to have a single client, no matter what size they were. Budget for data enrichment or remediation? Never. Okay. Buying more data, getting more lists. Absolutely. You know, cleaning up and enriching their database. Even before AI, it's not a thing. Cannot even though everyone recognizes they'll admit it's a problem. You can't talk to a single CMO that says, yeah, my database is spot on, perfect, that's great. It's the ugly elephant in the room. It now is even worse with AI because even at the simplest level, if you want AI to do anything, well, if you're going to feed a crap, you get crap. And so yeah, we've had several clients now that we're working on to put in some of these systems and that's the first thing that gets in the way. And we have to get them to realize that. Right. Look, why build something that's going to be automated? It's going to make the outcome worse. We have to get this data cleaned up. And depending upon the client, sometimes it's easier said than done depending upon their situation. But at the same time, not only will AI work on once you have good data, AI can be used to help you clean up your data. So it's a great engine for that and very cost effective. You don't necessarily need to go out. With all due respect to my friends at Snowflake and Azure and every place else, I mean that's good once you have the system set up. But before that, if you need to clean up the data before it gets into those models, AI is great for that. So that's really where we get our clients to start is okay, what are the gaps? And let's figure out how to use the tools you have combined with AI to close those gaps before we can actually build out whatever thing that is.
- [17:01]
Sarah McDevitt
That you want besides that data reality versus like the unattractiveness of having that Conversation. What are the other challenging conversations you're having around AI with customers?
- [17:14]
Jeff Petowitz
Every board CEO says, yeah, you need to have AI, you should need to be coming people, we need to be using AI across the business. Okay, that's just a mandate, that's not a strategy. So that's big part of the problem. There's really a lack of guidance. And without the North Star direction, it's no wonder why so many businesses really are kind of sputtering along. So, you know, at a minimum, form an AI council not only to help you with your internal policy and governance, but to really shape what, what has to happen. What I, and I speak a lot too when I speak to CEOs, like, look, you got to think of AI not just as tech. You have to think of it as like finance or sales or marketing or customer experience. This is a strategic capability your company has to have. It's an acumen that executives should have. That doesn't mean that executives have to go out and know how to code and AI, it just means that this is something that every meeting, you have a status meeting, you go through your agenda, right? You talk about hr, your IT infrastructure, you talk about all that stuff. There should be a section on the agenda every single week, in every meeting about AI. How are you going to enable your processes? What are you going to be doing differently? How do you position your products and services differently? And that's really how it starts to get embedded. The technology should follow. Our workforce is and will continue to change dramatically. You know, a workforce in 2030 is going to look very differently than it does today. And that's just a few years away because of AI. And so leaders need to be thinking about that first. What is my workforce going to look like in the future? You know, you hear Sam Altman talk about building a billion dollar company with one person that's not that far fetched. It's coming now, but that's going to depend on agents and fixing those problems I talked about.
- [18:55]
Sarah McDevitt
Yeah, absolutely. Absolute. Speaking of HubSpot, you've played in multiple ecosystems. What should a partner do when entering HubSpot or in fact any ecosystem? What do you think is a complete waste of time or a missed opportunity?
- [19:10]
Jeff Petowitz
The key is, you know, we've always had to think value added partner, value added reseller. It's, you have to understand what the ecosystem that you're moving into already has, needs, what their culture is, and then figuring out how not only are you going to adapt to that ecosystem, but then, but then add value within that different system, the ecosystem is not going to bend to you. It's not, it's not going to wrap around you, right? So you have to wrap around that, that ecosystem, come in with a plan and be focused. Just like, you know, we did when we had to kind of rebuild ourselves and get back and say, okay, it doesn't really matter what segment you're going after, whether you're going after enterprise financial services or you're going after small retail. Where and how can you add value? And why, first of all, should the reps that you're going to work with, the partner managers, you're going to work with HubSpot, why should they care about you that you know, when they have thousands of other great partners worldwide that they work with all the time, what are you going to do that's going to help them? And then even more importantly, how are you going to help their customer? How are you going to help HubSpot's customers?
- [20:10]
Sarah McDevitt
So speaking, Jeff, as the ultimate comeback kid here, when it comes to the HubSpot partner program, in the next, you know, era of AI, anything is possible. What's next for the Petowitz Group?
- [20:22]
Jeff Petowitz
Well, we're going to keep doing what we've always done is helping our clients win and get results. Our North Star still always will be revenue and building scalable pipeline. We're just going to do it with HubSpot and we're going to do it with AI. Where we really want to work with HubSpot customers is the market is changing so much. Not just HubSpot but there is a gap right now in all this architecture in that it's not really designed on how people buy today, at least in B2B, these systems are all geared around a contact, a person moving through the funnel. But in B2B today you're dealing with anywhere from five to 15 people. So there are two sides to this. One, how do you systematically start gearing the capability towards the buying committee, not just the person, and that's a very different way of looking at it. And second, all these systems, as great as they are, HubSpot 2, it's built on digital signals. But many people on a buying committee never do anything digitally, but they're very much involved. Procurement department's not going on websites and downloading white papers and watching YouTube videos and all these things, but they're very much playing a role. So how does a technology company that's built on doing things digitally get the signals that are non digital and build that into intelligence? And so that's an area of opportunity, and I think AI will help play a role. But I envision seeing some new emerging vendors that come out that think about this differently.
- [21:56]
Sarah McDevitt
Well, Jeff, thanks for joining us today, honoring the outcome. It's been an absolute pleasure. And don't forget, if you're enjoying our content, don't forget to subscribe. New episodes drop every week.