How Does HubSpot Pay Its Partners Commissions? It Can Actually HURT Their Customers!

🔔 This article has been updated with the latest information & developments as of March 2023.

HubSpot is a leading marketing automation company that offers a range of solutions to help businesses grow and succeed. However, their commission-based payment system, known as the HubSpot Commission Model, has come under scrutiny for potentially harming their customers.

In this article, we’ll take a closer look at HubSpot’s Partners Commissions Model, how it works, and the potential risks it poses for businesses. We’ll also explore how marketing agencies might use this model to their advantage and provide tips for businesses to navigate the system safely.

What Is HubSpot? ✴️

If you’re involved in marketing, you may have already heard of HubSpot, which has fast become one of the biggest names in digital marketing platforms today, with great marketing and sales tools, inbound methodology, and super-helpful resources. With their all-in-one CRM platform, the platform provides easy-to-use integrations for marketing, sales, content management, and customer service.

The platform promises extraordinary results for those who have committed to utilising it with passion and effort, and thousands of users are already benefiting from it. HubSpot has a thriving community that helps you master the inbound principles and get the most out of its tools. While they do offer free tier plans, you get what you pay for, and to access premium features, you’ll need to upgrade to a paid plan. Or, if you need a team of certified HubSpot CMS developers to help launch your business to new heights, we’ve got you covered!

HubSpot charges based on the number of ‘marketing contacts’ you have, and they recommend paying only for contacts you want to market to. You can add up to 15 million non-marketing contacts for free, but you’ll need to subscribe annually for contacts you want to send marketing communication and ad-targeted emails. If you’ve been adding a lot of marketing contacts to your database, you may be subject to a bill shock on renewal, so be careful about permitting users to bulk upload marketing contacts.

The platform also offers various resources to help users succeed, such as blog articles, webinars, and certifications, which can help businesses get the most out of the platform. Essentially, it’s an excellent platform for businesses looking to implement an inbound marketing strategy and improve their sales and marketing processes. While it may come at a premium cost, the features and benefits it offers make it a worthwhile investment for businesses looking to grow and succeed in the digital age.

One thing to be cautious about with HubSpot is its commission model. This can actually hurt customers, as the platform learned the hard way. Read on for a rundown of the partnership model and its multifaceted aspects.

HubSpot Partners Commissions Model 💰

Through HubSpot’s Partners Commissions Model, marketing agencies and solutions partners sell the platform’s tools to other businesses and receive a percentage of the commission for each sale. Ideally, these agencies are responsible for providing the new HubSpot customer they have referred to with a smooth onboarding process, ongoing support, and future maintenance, albeit with associated service fees as agreed.

The lifetime commission model, which promises a 20% commission on each new sign-up, has been a popular option among marketing agencies. While it is true that many of these agencies have been helping clients with custom integrations and complex implementations of HubSpot products, the platform has also been instrumental in teaching clients the principles of inbound methodology and working to build and nurture businesses of all sizes.

While the commission model is an excellent way to incentivise salespeople and partners, it may be too easy to negotiate according to the agencies’ twists and turns. Marketing agencies and solutions partners sometimes manipulate the lifetime commission model. Despite all the excellent work, marketing agencies that are rebranded as solutions partners (with gold, platinum, and diamond tiers) may be more incentivised to get you signing up to the platform than meets the eye.

What Is The HubSpot Solutions Partner Program? 🤝

The HubSpot Solutions Partner Program is a program that allows businesses to partner with them, a leading provider of inbound marketing, sales, and customer service software. The program is designed to help businesses grow and achieve their goals by providing them with the tools, resources, and support they need to be successful.

It all started in 2010 with HubSpot’s Agency Partner Program, which taught agencies how to use the inbound methodology and sell HubSpot software. In 2012, they introduced the Solutions Partner Program, which was designed to help their customers get more out of their platform. It provides customers with access to agencies and service providers that are experts in using the platform to achieve their business goals.

As a Solutions Partner, businesses can access HubSpot’s all-in-one CRM platform, which includes tools for marketing, sales, content management, and customer service. They can also take advantage of HubSpot’s training and certification programs, which help partners stay up-to-date with the latest features and best practices. Additionally, Partners receive dedicated support from HubSpot’s partner team and access to exclusive features and resources to help them grow their businesses.

The HubSpot Solutions Partner Program has four tiers – Solutions Partner, Advanced Partner, Premier Partner, and Diamond Partner – each with increasing benefits and resources. By advancing through the tiers, businesses can access more revenue sharing, dedicated partner support, and exclusive features and tools.

Overall, the HubSpot Solutions Partner Program is a valuable resource for businesses looking to grow and succeed by leveraging the power of inbound marketing and HubSpot’s all-in-one CRM platform.

How Does The Solutions Partner Program Work? 🤷‍♂️

With HubSpot’s Solutions Partner Program, marketing agencies gain exclusive benefits as they progress through higher-level tiers. Each tier offers extra perks, which the agency gains with the level of success they achieve with clients using HubSpot’s platform.

Tiers are ranked from gold (rookie) to elite (pro). When an agency joins the program, they are either solutions providers or solutions partners. The provider package makes a lower commitment to sell and service HubSpot, whereas the partner package provides them with a wide range of benefits.

One of the first things a marketing agency does upon joining the partnership program is lead registration – a process of claiming a prospective company that they want to refer or resell the HubSpot program to at some point. If a lead buys the HubSpot program and has been registered as a prospect by an agency, the agency will generally receive a revenue share for that deal. Once a lead is registered, the marketing agency can also ethically reach out to that company for further sales and other interactions.

However, a new agency may sell the client other HubSpot products or an upgrade/upsell if the client wants to switch marketing agencies. Afterwards, the new agency will receive the commission for that upsell or upgrade.

To join this program, an agency needs a valid certification, and depending on the sold and managed points based on sales revenue, they are assigned tier levels. For example, if an agency sells to new customers worth AU $70,000 and sells to existing customers worth AU $180,000 (not in a current HubSpot growth market), they will become an Elite Solutions Partner, the highest tier level possible (more on this below).

Sold and managed points are key metrics in the agency’s progression through the tiering structure. Each point generated offers the solutions partners a commission as long as the customers maintain their subscriptions. Check out HubSpot’s tiers page for the full details.

In short, the HubSpot Solutions Partner Program offers marketing agencies a wide range of benefits that grow with their success, and agencies can earn commissions for the lifetime of their referred and sold customers.

HubSpot Solutions Partner Tiers 📈

Solutions providers are not obliged (or pressured) to meet any point requirements, but solutions partners have four tier levels for solutions partners: Gold, Platinum, Diamond, and Elite. The tier levels are determined based on a combination of metrics, including sold and managed points, customer retention, software engagement, and inbound marketing success.

As of July 2022, HubSpot moved on to a new points-based tiering system, where the more your sold and managed points grow, the higher tier you earn. So, for every AU $105 Monthly Recurring Revenue (MRR) from new or existing customers, you gain 3 Sold Points or 1 Managed Point, respectively (double points each if it’s a current HubSpot growth market). You can find the full details on the HubSpot Solutions Partner Program 2023 Tiers & Benefits Guide.

Below is a breakdown of the solution partner tiers in approximated AUD as of March 2023.

Tiers	Total Points Threshold	Sold Points & Thresholds for Sold MMR	Managed Points & Thresholds for Managed MMR
Gold	243	113 or $5,602	38 or $5,602
Platinum	645	270 or $13,444	150 or $22,407
Diamond	2,020	570 or $28,382	550 or $82,159
Elite	5,950	1,950 or $97,097	1,700 or $253,946

Note: Sold Points expire 1 year after deal close, and Managed Points expire 90 days from the partner’s last account action.

Regardless of the tier level, partners earn a flat 20% commission on their clients’ HubSpot subscriptions. They also have access to a range of support, marketing, sales, services, and enablement tools, as well as HubSpot community support. However, it’s worth noting that some partners may not genuinely invest in their clients’ businesses beyond receiving their commission.

The Risks Of HubSpot’s Commission Model ⚠️

While the Commission Model may seem like a great way to incentivise salespeople and partners, it can also have some negative consequences for businesses. One of the biggest risks is that marketing agencies and solutions partners may be more incentivised to get businesses to sign up for HubSpot than is in the best interest of those businesses.

For example, a marketing agency with a lifetime commission agreement with HubSpot may be more likely to recommend HubSpot to their clients, even if it is not the best fit for their needs. This can result in businesses signing up for a platform that does not meet their needs or is more expensive than they need.

Another risk is that marketing agencies may not provide the level of service and support that their clients need after the initial sale. While HubSpot requires agencies to provide ongoing support, some agencies may not have the resources or expertise to effectively provide this service level.

HubSpot’s Solutions Partner Program has unknowingly worked against their customers’ benefits. When marketing agencies are incentivised to sign up as many new customers as possible, it may lead to a lack of focus on the customer’s needs and problems.

Marketing agencies may use manipulative tactics to sign up new customers, even if HubSpot is not the best fit for them. This could result in customers signing up for a service that they don’t need or can’t use effectively, leading to a poor customer experience. Moreover, the lifetime commission model can cause partners to prioritise selling new accounts instead of focusing on providing exceptional service to existing customers.

How Businesses Can Safely Navigate The System 🧭

While there are risks associated with the HubSpot Commission Model, businesses can still benefit from the platform and work with marketing agencies that use the model in a responsible way. Here are some tips for businesses to navigate the system safely.

🔎 Do Your Research

Before signing up for HubSpot, do your research and make sure it is the right fit for your business. Consider your budget, your goals, and your current marketing and sales processes.

🎖️ Work With Reputable Marketing Agencies

When working with marketing agencies, choose reputable partners with a track record of success. Look for agencies with a good reputation, strong customer reviews, and a proven track record of providing excellent service and support.

💁 Set Clear Expectations

When working with marketing agencies, set clear expectations for the level of service and support you expect. Make sure you have a clear understanding of what you’re paying for and what services you’ll receive.

📝 Review Your Contracts Carefully

Before signing any contracts with marketing agencies, review them carefully to ensure that you understand the terms and conditions. Make sure you’re comfortable with the pricing structure, payment terms, and the scope of the services being provided.

📊 Monitor Your Results

Keep track of your results and monitor your return on investment (ROI) to ensure that you are getting the most out of the platform. If you’re not seeing the results you expected, don’t be afraid to speak up and address the issue with your marketing agency.

💬 Communicate Openly

Communication is key when working with marketing agencies. Ensure you have open and honest communication with your agency to ensure that you’re both on the same page and working towards the same goals.

🎯 Consider Working With HubSpot Directly

If you’re concerned about the commission model and working with a marketing agency, consider working directly with HubSpot. While you may miss out on some of the benefits of working with a partner, such as dedicated support and training, you can be sure that you’re getting unbiased advice and support.

While the HubSpot commission model has its risks, it’s still possible for businesses to benefit from the platform by working with reputable marketing agencies and setting clear expectations. By doing your research, monitoring your results, and communicating openly with your agency, you can ensure that you’re getting the most out of the platform without compromising on the quality of service you receive.

What HubSpot Is Doing To Fix The Problem 👨‍🔧

To address these issues, HubSpot has made several changes to its commission model and partner program. In 2019, they introduced a new tiered commission structure that incentivises partners to prioritise customer satisfaction and retention. The new structure pays a higher commission for customers who renew their subscriptions with HubSpot, and the percentage decreases for new customers.

HubSpot has also implemented stricter requirements for becoming a solutions partner, ensuring that only reputable agencies with a proven track record of customer success can participate. Additionally, HubSpot now provides training and resources to help partners focus on customer needs and provide exceptional service.

Furthermore, HubSpot has acknowledged the negative impact that its commission model may have had on customers in the past and has taken steps to rectify the situation. They have apologised for any negative experiences and have committed to improving customer experience and partner practices going forward.

There have been recent updates to the HubSpot Solutions Partner Program aimed at addressing commission-related issues. As of April 1, 2023, the duration of commissions for new MRR from customer lifetime is a maximum of three years. This means that for any deals sold on or after April 1, 2023, partners are paid a 20% revenue share for a maximum of three years from the qualified transaction date.

In addition, there have been changes to the managed MRR criteria, including a requirement for partners to take a qualifying action in their client’s account in the past 60 days instead of 90 days. These changes ensure that customers are actively engaged and that partners receive credit for their success.

A Glance At The 2023 Updates 🔔

HubSpot’s Solutions Partner Program has undergone some changes. The program now includes the HubSpot Upmarket Referral Program, which provides eligible partners with a 10% commission for one year from the date of sale for deals that meet the requirements. To qualify for this program, partners must be CRM Implementation accredited and collaborate with HubSpot Growth Specialists on the deal. See the Sales Rules page for full details.

Starting April 1, 2023, the duration of commissions for new MRR from customer lifetime is changed to a maximum of three years. This means that for deals sold on or after this date, partners are paid a 20% revenue share for a maximum of three years from the qualified transaction date. Check out the legacy plan for commissions for more information.

HubSpot also updated the criteria for managed MRR. Starting April 3, 2023, partners need to take a qualifying action in their client’s account in the past 60 days (rather than 90 days) to continue earning managed MRR credit for their account. Additionally, workflows no longer count as a qualifying action for earning managed MRR credit. These changes ensure that customers are actively engaged and that their success is being attributed to the right partner.

Finally, from July 15, 2023, all untiered partners will have two years from the date they joined the program to achieve Gold status. If untiered partners fail to reach and maintain Gold status by then, they will be given a six-month notice to tier back up to Gold before being given a choice to join the provider level or become a regular customer. Both downgrade options will impact the commission term.

Final Words: HubSpot Partners Commissions Model 🧐

While HubSpot’s commission model has its benefits, it’s essential to be aware of the potential downsides. HubSpot has taken steps to address the negative consequences of its commission model and partner program, but it’s up to individual agencies and partners to make sure that they are prioritising customer needs and providing exceptional service.

If you do decide to work with a solutions partner, ensure you choose one that prioritises customer satisfaction and has a proven track record of success. They must be a trustworthy, sustainable, and ethical partner long-term who shares your objectives and outcomes because the HubSpot commission model doesn’t encourage that level of commitment and engagement or partnership loyalty on its own.

If you want to discuss HubSpot more or want a team of certified HubSpot CMS developers to help with your business goals, book a discovery chat with us. We will happily discuss your needs to help you reach the next level.