The Objective Guide to Decoding HubSpot’s New Pricing

In 2015, HubSpot launched a new CRM to complement its existing marketing automation and sales applications. Moreover, they announced with great fanfare that the CRM would be free. 

It was a bold, disruptive move. One that I have cheered for almost nine years. Since that announcement, they often reinforced that the CRM would be free forever.

As the great Inspector Jacques Clouseau would say, "Not anymore."

The Five Levers of HubSpot Pricing

When considering the proper configuration for HubSpot, it’s essential to understand how the various elements work and how they impact the price.

1. Hubs

This is one of the two most significant changes to HubSpot’s pricing. The first choice you’ll make is which “Hub” you’ll be using. While there were five “Hubs” as of March 5, 2024 (according to HubSpot’s release), only three have a fee associated with them—Marketing Hub, Operations Hub, and CMS Hub. 

Sales Hub and Service Hub no longer require a minimum fee for either Hub and are now determined only by how many respective seats you license. 

Each Hub unlocks certain features (for a full list of the latest comprehensive features and pricing provided by HubSpot, visit their product catalog here) available to all users. In contrast, Sales and Service Hubs provide some features to people with specialized seats, not those who don’t. (If you think this is complicated, we’re only getting started.)

2. Seat Types

This is where the most significant change is. In HubSpot’s new pricing schema, there are three distinct seat types. Understanding how each seat works is crucial to ensuring you get the correct configuration at the best price. Remember, while you certainly don’t want to pay more than you need to, paying less is worse. We’ll explain more below about determining what seat types you need.

• Read-only: HubSpot is introducing a new seat type. Read-only seats have access to most areas of your HubSpot instance (within the parameters of the permissions you provide the user), but as the seat type indicates, they can only view the information presented; they cannot edit, notate, or otherwise interact with any records or data that is presented to them. At this time, there is still some confusion about the level of filtering a read-only user has. We will update this section as more information becomes clear.
  
  Do not confuse these free seats with those that HubSpot has promoted since launching its CRM in 2015; they no longer exist.
  
  
• Core: Yesterday’s “free seats” became Core seats in the new pricing plan. Core seats have access to all core Hub functionality for all the Hubs you’ve licensed. The price for each Core seat depends on the tier you’ve selected.
  
  
• Sales/Service: The new pricing plan hasn’t changed this (except that you can now license a single seat, as there are no longer minimum prices for each Hub).

As part of this change, HubSpot portals are limited to no more than five included core seats. With HubSpot’s new pricing, no HubSpot Hub allows unlimited users with more than read-only access. 

The impact of this change will vary greatly depending on the size of the business and how its go-to-market teams are structured. For example, if you have a marketing team of 20 who will be using HubSpot’s Marketing Hub Enterprise as a core part of their jobs, there will be a Core seat fee for 15 users in addition to the existing licensing fees.

3. Tier

For this post, I am limiting the focus to the Pro and Enterprise tiers for this guide.

Your tier determines the monthly fee for the Seat Types you select and the Hubs. If you have Hubs with different tiers, your Core seat fee will be based on the highest tier. Additionally, your tier determines how many Core seats are included with your license.

4. Contacts

If you’re using Marketing Hub, you must account for how many contacts you’ll be actively email marketing to. Depending on your tier, you get a base number of contacts (2,000 for Pro, 10,000 for Enterprise). Once you go above that, you’ll need to pay additional fees per month depending on how many contacts you have.

5. Add-Ons

One of the primary advantages of the HubSpot platform vs. its alternatives is the suite of applications and features that come with it, enabling you to configure it to your unique needs while still managing a single database and application.

However, it is no longer safe to assume that these are all included in your base licensing fee. Apps like SMS, calling, additional domains, increasing various limits, and more are potentially subject to additional fees. (For a full list of HubSpot's latest comprehensive features and pricing, visit their product catalog here.)

How To Know Which Seat Type is Right For Your Organization

One of the most important decisions impacting your success on the HubSpot platform is how you allocate seat types for those who will use or access HubSpot.

Unfortunately, the days of not having to ask the question, “Does this person really need full access to the CRM?” are gone, and user provisioning and management have become an additional element that your RevOps team must account for.

When we advise our clients in this area, here is how we approach it:

1. Get (or create) a census of all employees who need access to the CRM or are directly impacted by anyone who uses the CRM. 
2. If you don’t already have this, create 3-9 roles that everyone on the census fits into, and briefly describe the job for each role. The best results from this exercise typically involved creating 5-7 roles.
3. Place everyone on your list into cohorts that match your described roles.

Review the job of each cohort with the seat type explanations below to determine which type of seat they will need.

• View/Read-Only: If the role only requires someone to see data and not interact or engage with it, then this is the right seat…and it’s free. The most common use case for this type of seat is for people who want to view dashboards or reports. A word of caution, be sure to stress-test if view-only access will be sufficient.
  
  
• Core: if the role requires the basic use of CRM functions, you work with any of the features/apps that are unlocked with Sales or Service Hub, or if you need to work within Marketing, Operations, or CMS Hub, then the Core seat is the right one for the role.
  
  What are the basic uses of CRM? Here are some examples:
  • Managing contacts, companies, opportunities, service issues, or any other records
  • Creating or managing actions for yourself or others
  • Utilizing any of the marketing, data management, or CMS features
  • Workflow automation
  • Capturing and organizing customer interactions across various communication channels
    
    
• Sales/Service: you’ll want your roles directly involved in connecting and managing relationships with prospects and customers in sales/service seats. Whether it’s a sales or service seat will depend on the role's specifics and which features are most appropriate for activities.

Understanding The Difference Between Core Seats & Sales/Service Seats

Choosing the right seat can be complicated and confusing because of how HubSpot treats its various Hubs and what features they consider to be Hub-based and seat-based.

Hub features comprise the functionalities and tools available across the HubSpot account or Hub. These functions are typically designed to facilitate collaboration, integration, and overall management of your marketing, sales, and customer service functions.

These include functionalities such as centralized CRM, marketing automation, analytics and reporting, integration with third-party apps, and custom dashboard creation. Unlike seat features, which are tied to individual user accounts, Hub features are available to all users within the organization's HubSpot account.

Seat features are only available to the individual users with a Sales or Service seat. Users with a Sales or Service seat can access advanced sales tools and features designed to streamline and optimize their processes and boost productivity.

How Your Seat Choices Impact CRM Adoption & Utilization

With HubSpot’s previous (and until March 5, 2024, current) pricing, the only seat decision you had to make was how many Sales/Service seats you needed. Every other user would have full access to the CRM and all Hub functionality at no additional cost.

Now, you must make three additional decisions:

1. How many people need to be able to use the core functions of CRM and Hubs? The stakes for this decision are significantly higher because each seat now costs money. Additionally, historically, seat counts cannot be lowered until the contract renewal date.

2. For how many people would read-only access be sufficient? Be sure to stress-test the use case for read-only users. Read-only can be great when everything is in line with expectations and things are running smoothly, but one of the primary reasons you need to invest in this technology is because those times are very rare.

3. For how many people is access to CRM just not worth it? I add this as a new question because of the restrictions on free users.

The Adoption Network Effect

Most organizations considering HubSpot will naturally look to minimize the number of seats with full Hub functionality. Be careful, though, because that is a dangerous decision.

Be sure to consider what we’ve dubbed The Adoption Network Effect:

Each user who is part of a business process or motion that does not fully utilize the technology designed to enable or optimize the process multiplies the friction created for those who do utilize the technology, leading to less utilization and adoption and increasing the total costs of managing the process and system.

This means those people who are either not given access to HubSpot or are given free, read-only seats will not be able to fully utilize the platform, placing a drag on those users who do. This is also true for people given Core seats that don’t fully enable them to do their jobs efficiently using the CRM. 

This is the primary reason that legacy CRM rarely delivers on its promise. The problem isn’t inherently the product; it’s the seats-based pricing model. When the customer experiences a static, additional cost for each incremental user, they must make an incremental cost and risk vs. benefit analysis. Doing this effectively requires accounting for the network effects of the decision, which, candidly, is impossible if you haven’t done a comprehensive business process and change management analysis.

Is The Juice Worth The Squeeze

Over the last three years, we’ve led many successful large-scale implementations by enabling companies that have historically struggled with adopting new technology in general and specifically with CRM.

We’ve been able to do this because we learned one crucial lesson years ago. Users will only adopt new processes or technologies if, and only if, using them makes their lives and jobs easier than not using them. 

Put simply, users only adopt new things when the juice is greater than the squeeze. The danger is that when the focus is on reducing the costs, you are likely increasing the squeeze required of users while reducing the juice.

The Likely Impact

Based on the calculations and models we’ve run, this new pricing schema will represent a cost increase and/or functionality decrease for a large percentage of customers.

One segment in our models that this appears to benefit is small businesses with 5-20 users. This new pricing model enables them to access greater functionality by accessing Sales/Service Pro or Enterprise functionality without meeting minimum seat counts. 

This change represents a significant price increase for larger businesses that require 50 or more Sales/Service seats. Our models show the likely increase to be 20-35% while also representing a loss of functionality. 

Note: This price change will not initially impact current customers. HubSpot promises that when a future migration for existing customers occurs, the price impact caused by this change will not exceed 5%. One area that is unclear currently (we will update this post when it is clear) is what happens after the migration when new seats are added.