Weekend Favs November 4

Speaker 1 (00:13): John Jantsch (00:08): Hello, and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch, and my guest today is Peter Caputa. He’s the CEO of Databox. He’s a former VP of sales at HubSpot, and currently specializes in helping companies grow by implementing sales and marketing excellence. This company, databox, is a business analytics software company that helps companies monitor, report, predict, and improve their entire company’s performance in one’s spot. So Pete, welcome to the show.

Peter Caputa (00:38): Thanks, John. Appreciate the intro and great to be here.

Speaker 1 (00:13): John Jantsch (00:41): I just described your business, but let’s just take the non-marketing speak and just say, what does Databox do?

Peter Caputa (00:50): Yeah, well, I think the biggest problem that we solve for companies is that their performance data is all over the place. So marketing is the worst where you have website analytics like Google Analytics, maybe HubSpot, you have SEO data from SEMrush, hres Search Console. You have social data ads, data, et cetera, and everywhere. And so what we did is we built integrations with all those tools, recreated the visualizations and the charts and the metrics that you’re used to seeing so that you can click and basically have all that data in one spot, view it, set goals against it, forecast performance on it, benchmark it against similar companies, et cetera, et cetera.

Speaker 1 (00:13): John Jantsch (01:32): So before we get more into that, I want to go backwards a little bit in your entrepreneurial journey. You were an early HubSpot person. In fact, when Brian and Dharmesh were actually creating it and wrote the book Inbound Marketing, that’s when Duct Tape Marketing was really around and I had a lot of conversations with them early on. I should have gotten on the partner train. That’s one of my big regrets in life. A whole lot of people were pitching cr mish kind of things at the time, and I missed that opportunity, but to still have done a lot with HubSpot over the years. But talk a little bit about being in that early start company and now that is public, and I know you’ve got a lot of opinions about what’s going on there, but I’m curious just kind of what it was like to start in that small of a company that really blew up.

Peter Caputa (02:18): Yeah, a hell of an experience had no idea. At the time when I was joining, I was running a startup of my own and making a living but not going anywhere. And I did that for several years, about six years. So when I joined HubSpot, it was like, ooh, a steady paycheck and other people that seem really smart and doing digital marketing, which is what my startup was. So it was a step up from what I was doing. When I look back, it was actually quite risky. I was 15th employee, I remember the hundred person party, the hundred customer party. I remember we went and grabbed beer and pizza and celebrated that. We had a hundred customers paying, it’s two 50 a month, so do the math. That’s hundred grand annual revenue. So really risky startups that I joined, but obviously it turned out quite well.

(03:05): And then I stayed there for nine years. I was the first person to go from individual contributor sales rep to manager, director, and MVP. And so I grew a big team there. I started the agency partner program that you passed on and built that up. And that became about, and now is about 40% of HubSpot’s revenue. I always stayed there until that team was counter million in annualized revenue, which was around 2016. And so HubSpot, since then’s going crazy, I think as a company, they’re doing 2.2 billion in annual revenue and 40% of that, or roughly, I don’t think they shut publicly that often, but about 40% of that is coming in through partners. So it’s a billion dollar business at this point. So quite an experience.

Speaker 1 (00:13): John Jantsch (03:51): And I know you didn’t get on here to talk about HubSpot, but I have one more question to dive into. I’m good. That partner program is a lot of agencies who you work with still today. That’s really your target today. And I work with a number of HubSpot agencies and I’m hearing some grumbling that they got to a point where they said, oh, I know you were with us a long time, but we’re doing something different. And here’s the new program. I’m hearing some grumbling that happens when companies grow. And I know you’re still a big fan of HubSpot, but I’m curious how you feel like that move has really turned out for them.

Peter Caputa (04:27): So HubSpot, the HubSpot execs are used to me being bluntly honest. I was bluntly honest as an employee, so I’m happy to continue with that reputation. But yeah, so they definitely made a bunch of changes. I think the net of it is it went from HubSpot teaching a business model to follow to more of a partner program where you’re reselling technology. And I don’t think a company with a hundred or however many customers they have, I think is way over a hundred thousand, can continue to be a business. They chose not to continue to be a business model advisor to agencies,

Speaker 1 (00:13): John Jantsch (05:04): Which

Peter Caputa (05:04): Is the way the program started. We were helping these agencies improve their cashflow by switching away from project work to retainers, inbound marketing retainers. And I think that time has passed. HubSpot doesn’t even really talk about inbound marketing that much. They talk about the CRM. And so HubSpot I think recently has made painful for some, but necessary changes for both their business as well as I think for the partners. And what’s happening now, from my observations and talking to lots of partners is that more HubSpot is really bringing partners into deals and leveraging them for service sales, assistances and service so that HubSpot doesn’t need to continue to build a massive services team and can rely on agencies to do the very customized personalized work to make ACRM and a market automation and the services platform work. So I think it’s the right move for HubSpot to change it where they have a smaller number of partners that they’re referring or bringing into deals where they can really control for the quality.

(06:08): And those partners are big enough and capitalized enough to be able to offer a breadth of services that help the customer implement the entire HubSpot product suite. So I think they’re making necessary changes, but yes, it’s painful. I think for the smaller agencies who don’t get those referrals, they also change the commission program. So the commission starts to expire, especially for those smaller firms that don’t keep up with selling new licenses. Definitely. I think what we’ll see, my prediction would be that there’s a little bit of a rationalization. There’s fewer small partners, more big partners, maybe more specialized partners who specialize either in a type of service or a niche market that can bring expertise that HubSpot doesn’t have internally. But again, these are things that happen in a maturing partner program. Yeah,

Speaker 1 (00:13): John Jantsch (06:53): And it’s a proven model. I mean, it’s a Salesforce kind of model I bringing partners in many software before Salesforce. Yes, exactly. Yeah. So let’s go back to data. You started to describe what you’ve done with databox. I’m curious, there are a lot of other tools out there that claim that same space. Agency analytics, for example, is one that comes to mind. How do you tell people, here’s what we’re trying to do that’s different?

Peter Caputa (07:15): Yeah, the most unique thing that we do is that we turn data into KPIs. They’ll provide a level of flexibility in terms of what data metrics somebody wants to show and how they’re going to show it and how they’re going to visualize it. And it really enables a custom reporting platform. So I think when we’re comparing to companies like Agency Analytics, I think the flexibility of our system is really good When you’re comparing us to companies more like business intelligence tools, where we are strong is our native integrations. So turning the data that gets pulled from APIs, from sale, HubSpot or Google Analytics or whatever, and translating that for the user into the metric that they’re used to seeing. So sessions by referral source sessions, by organic sessions, by paid

(08:04): All the way down to the keyword level or the ad level, we recreate that. So it’s point click in choosing making choices and dropdowns as opposed to what many BI tools do is like, okay, I get your data into a warehouse. And then once you do that, learn how to write SQL or use this thing and look at all your data and then extract the right metric. So what that net that allows is somebody who’s not extremely technical to get in and get set up relatively quickly with the metrics that matter from the different tools that they have.

Speaker 1 (00:13): John Jantsch (08:33): What has always irritated me with some of the tools in that similar space is the data’s there in real time, but there isn’t a real handy way to go, well, let’s look at last quarter and compare. Have we grown? Have things changed? It’s like, nope, here’s today’s data. And I always find that sort of irritating with a lot of the tools,

Peter Caputa (08:53): Some of, I think the lower end tools where they are easy to set up, but it’s because they’ve coded it exactly the way they’ve coded it. And so there is that lack of flexibility. We actually spent two years doing a project we internally called custom date ranges that allowed the user to just change it to any date range in the past ranges month to date, whatever date range you could want on the fly as they’re looking at the dashboards. Believe it or not, it was an extremely complicated problem to solve and

Speaker 1 (00:13): John Jantsch (09:24): That’s why it exists, right?

Peter Caputa (09:26): And that’s why there’s lots of tools that don’t bother. And when we did it, it really just caught us up almost with what the native tools provide. And so it was a big project that we didn’t frankly get a lot of return because it’s kind of table stakes, I think.

Speaker 1 (00:13): John Jantsch (09:42): So how big, I know the answer to this, but I’m going to tee it up for you anyway. How big does a company need to be? Because a lot of times people think about data and data warehouses and BI tools, we’re talking enterprise stuff, but how big does a company need to be to where this type of implementation makes sense?

Peter Caputa (10:00): So we have a very inexpensive starting price point, I think, don’t quote me, I think it’s $59 a month, I should know that, but so we have a very low starting price point. So we have lots of small businesses that use us. Our sweet spot of customers that stick with us for a long time and use the product in the way that we kind of intended it is that 11 to 250 employee mark.

Speaker 1 (00:13): John Jantsch (10:25): We

Peter Caputa (10:25): Have many customers that are bigger as well, but there’s a smaller number of companies that are that bigger. So we have a lot of customers or big percentage of customers in that 11 to two 50. It’s generally whether they have ongoing marketing and advertising activities, they have salespeople or a shopping cart or subscription, and they have multiple people doing things that improve the performance of the business. And each of those people are using multiple tools. That’s when our product becomes valuable, especially for an owner. We have a persona we call Decision Maker Dave, and

Speaker 1 (00:13): John Jantsch (11:02): That

Peter Caputa (11:02): Is the person that usually signs up for our product and the person that logs into our product most frequently, they usually, they’ll delegate the setup of our product to their managers or maybe an analyst, but usually just their managers. And so it tends to be those small business owners that want that visibility into the performance of their entire company without bugging everybody. They want it real time. They want to be able to explore it themselves. They want to be able to track performance to goal this month of this quarter across the team.

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Peter Caputa (12:54): Yeah, so we have a bunch of things in play around AI and predictions and also really guidance for how to improve performance. But to answer your question very specifically, a standalone forecasting feature where once you can act to your data sources, you can select from different metrics that we would pull from there, and then it forecasts it automatically for you based on your historical performance. So that’s pretty new. It’s a standalone feature. We haven’t even integrated it with our custom dashboards yet, or custom reporting feature working on it. But yeah, it’s very much important piece of what we consider a set of features that are important for really managing the performance of the business. What we observe is that a lot of companies kind of just do reporting as a check the box activity. It’s like, yep, I sent you my results, go check it out. And it’s either good or bad. It’s almost like a report card that after you’ve taken your test.

(13:49): But in reality in business, we get to go and take the test again in a way where we can say, we got next month, we can change it up, we can do something different. We do more or less, we could try something completely new. So there’s a bunch of features. We’re building forecasting, benchmarking, which allows companies to compare to peers correlations, which automatically detect correlations between leading and legging indicators, which is a really difficult concept, I think, for a lot of marketers to grasp. And so we’re trying to make that easy. So important to understand the things you do today that will impact next month, next quarter. And so that’s just some of ’em. There’s a few others that we are working on. They’re in the works that we’ll launch this quarter and next quarter, but we think there’s an opportunity to help companies make decisions by giving them those types of functionalities that help them not just predict the future, but also think and think about what they could do to impact the future.

Speaker 1 (00:13): John Jantsch (14:45): So I do want to talk, you mentioned benchmarking and benchmark groups, which is kind of an educational that I know you do alongside this. I do want to get to that, but I want to ask about one more topic that drives me crazy and that’s attribution. I have people that join our fractional CMO program that have been following me for 10 years and I run an ad and they see it. Oh yeah, I remember John’s out there exactly 10 years later. So what are some ways that people can start thinking about attribution in a more effective way? I don’t think many of the tools do a very good

Peter Caputa (15:19): Job. No, I think if you’re only using Google Analytics or HubSpot, any automated website analytics tool, if that’s all you’re using, you’re seeing maybe 25 to 50% of what’s actually happening. Because if you write a book and it gets sold through Amazon, you don’t even know who that is, let alone whether they read it right? And I know you’ve written a bunch of books, you have a podcast. There’s no way to connect your podcast to your CRM to see, hey, they listen to 10 episodes and now they’re in our funnel. There’s so many things now that happen to actually be the more effective marketing tactics and channels that aren’t measurable by the tools that most companies use. Now you can measure how many downloads did I get on my podcast? You can measure how many.

(16:02): So often you get a report from Amazon, how many books were sold. And so you can see directionally whether that content is resonating with your audience, but you can’t connect it to the sales or sale that you got unless you ask. And so I think we’re back to 1990s marketing attribution, 1980s before the internet was around where when you called somebody’s business, they asked, oh, how’d you hear about us? And they said, word of mouth, A friend referred or Yellow Pages or saw you at a trade show two years ago, whatever it was. And so if we ask those questions on forms on our website, on our Zoom sales calls, then we can start to actually get a piece, a much better picture of which marketing is working.

Speaker 1 (00:13): John Jantsch (16:46): The problem is

Peter Caputa (16:47): Very few companies are doing that in any kind of structured way.

Speaker 1 (00:13): John Jantsch (16:51): Well, and I tell you too, you’d take that with a grain of salt too, because we have a lot of organizations we work with where we use that model, and people don’t remember where they heard, they just pick one.

Peter Caputa (17:02): Yeah, I think capturing on a form is tough. People are like, I’m just trying to get through this form. I want to book

Speaker 1 (00:13): John Jantsch (17:06): Call.

Peter Caputa (17:07): I just want the stupid ebook. Why am I asking? Catching this question. But when you get somebody in a sales conversation, they will usually like, oh yeah, I’ve been following you guys for this and listen to your podcast. You get a little more context. But then there’s a whole process of grabbing that data, organizing it, and then analyzing it, which requires human to

Speaker 1 (00:13): John Jantsch (17:26): Usually for fun. We’ll sometimes put, my great aunt told me about you as the first choice. And when we get a bunch of those, we know they’re just getting through the

Peter Caputa (17:34): Form. No, it’s important to have an open text field, I think, in those.

Speaker 1 (00:13): John Jantsch (17:38): So let’s go back to the benchmark groups a little bit. And again, I’m just going to open it up and you tell me what you’re doing with that and what you’ve seen and how somebody might be able to participate in that.

Peter Caputa (17:48): Sure. So it’s a free product. It’s [email protected]. You can go there, sign up, get access to benchmarks from tens of thousands of companies who have opted in, and they’ve agreed to anonymously, I shouldn’t put that in quotes. They agreed to anonymously share their performance data in order to access a benchmark that allows them on a report to see here’s how we compare. And we’ve organized those companies once again and honestly by company size and industry and type of business, et cetera. So you can go in and see how does my Shopify performance metrics compare to other e-commerce companies with 50 or more employees or something like that, or how can I go and see how my HubSpot performance metrics compare to other companies that are SaaS companies? And so completely free, we’re on a mission to help companies just understand how they should be performing, because I think it’s really hard and confusing for most small businesses to figure that out. Not only is it hard for them to even know what metrics to track, it’s hard for them to know, is this good or bad? And so that’s what we’re trying to answer. Could

Speaker 1 (00:13): John Jantsch (18:59): Somebody, I was going to say, could somebody theoretically bring their own group? I want to benchmark my customers, something of that nature,

Peter Caputa (19:07): Especially

Speaker 1 (00:13): John Jantsch (19:08): B2b, obviously,

Peter Caputa (19:09): We’re coming up, we’re just short of about a hundred partnerships, which is what we call them, where other companies decided to say, I want to build a benchmark on my own. So we have an agency, for example, that only works with mental and behavioral health clinics, and they have 200 of those clinics as clients. And so what they did is created a group, they can add their clients to it or ask their clients to opt in. And then once that’s done, it automatically calculates the benchmark. And so now that agency is the owner of the only, I think, the only proprietary benchmark for behavioral mental health clinics that want to measure their Facebook ads, Google Ads, Google Analytics and Search console performance. And nationwide, they have nationwide coverage. So they can even see how is your performance in Texas compared to your performance in Pennsylvania. So they have this amazing data set that they now can go in and say to a client or prospect, like, you’re spending a lot more than the average and your results are less. Or you could probably afford to spend a little bit more to keep up with your peers. And if we were able to increase our reduce the CPC cost per click, maybe you can justify that, and that would ultimately yield them more results. So it allows them to go in and consult objectively through either a new prospect or client.

Speaker 1 (00:13): John Jantsch (20:27): Awesome. So it’s effectively bringing in, it’s very focused on advertising and kind of a core set of

Peter Caputa (20:34): Marketing. Social media. Yeah, CRM data. We have a lot of sales data, some finance data, although people are a little less likely to share that even though it’s anonymous. So it’s a lot more marketing and sales.

Speaker 1 (00:13): John Jantsch (20:47): Yeah. Awesome. Well, Pete, I appreciate you taking a few moments to come and chat with the listeners of the Duct Tape Marketing Podcast. You want to tell people where they can find you, maybe connect with you and certainly find out more about databox.

Peter Caputa (21:00): Sure. Yeah. So I’m very active on LinkedIn these days. So Peter Caputa on LinkedIn, there’s two of us, but one doesn’t post and I post almost daily, so I’m pretty easy to pick

Speaker 1 (00:13): John Jantsch (21:10): Up. And your Peter Caputa the fourth

Peter Caputa (21:13): As well? I’m fourth, yes. I’m the fourth. My great-grandfather father and my son are all Peter Caputa. So yeah. And there’s actually a Peter Caputa fourth. That’s what I meant. There’s another guy in Germany that’s the fourth, which is crazy.

Speaker 1 (00:13): John Jantsch (21:25): Oh funny.

Peter Caputa (21:27): And then Databox is just databox.com, just like if they see the video, they can see it on my hat here. But databox.com, just like it sounds

Speaker 1 (00:13): John Jantsch (21:35): Awesome. And we’ll have it in the show notes as well. So again, appreciate you stopping by and hopefully we’ll run into you one of these days out there on the road.