Intuit Rolls a New Set of Dice with Hubspot Integration

We learned on Friday that Intuit and HubSpot — two leaders in the small business software space — are offering an integrated solution. The new offering pulls the two platforms together to allow sales and marketing to work more effectively with accounting and billing. Granted, at very small businesses this is often the same person.

The combined market value of the two companies approaches $110 billion. Of this, 82% is Intuit’s and the remaining 18% is HubSpot’s. Intuit’s Quickbooks product has some 3.2 million users, most of which are small businesses, though this number may be as high as 7 million. HubSpot reports some 96,000 subscribers. So we’d say the big winner here is the small business owner. By linking the two platforms, HubSpot and QuickBook have made life easier for subscribers of both platforms. 

This integration comes at a time when Intuit’s latest quarterly results showed its Small Business and Self-Employed Group revenue up 13% to $1.2 billion and its Small Business Online Ecosystem revenue grew 24%. While those growth rates may pale in comparison to HubSpot’s latest quarterly growth rate of 31%, Intuit’s annual revenue base is more than six times larger ($4.4 billion v. $675 million).

A Multi-Pronged Relationship

According to the release, “HubSpot for QuickBooks helps solve the cumbersome process of manually transferring information from a CRM into a financial management system when a sale is closed”. Intuit CSO Bobby Morrison put it this way, “By teaming up with HubSpot, we are helping small businesses digitally transform and address their top two pain points — getting paid and managing customers​, the combination of our product portfolios will create tremendous value for small businesses around the world. This is the first step in a multi-pronged relationship that will only grow over time.”

The last sentence is what strikes us as the most telling. A multi-pronged relationship that will only grow over time. There are lots of directions this could go. We would think HubSpot is salivating at the prospect of accessing Quickbooks customers (7 million according to the release) and converting them into HubSpot users and advocates.

But here’s what we’re not so sure about. According to HubSpot’s most recent quarterly report, the company generated $9,669 per customer during the third quarter of 2020. That’s down 3% vs. Q3 2019. That is considerably more than the average subscription revenue per customer for Intuit. So we wonder how large the intersection of the above Venn diagram really is. We imagine that the core HubSpot customer is considerably larger than the Quickbooks customer. If, however, there is strong alignment, then the benefits as outlined below will be well received by those that leverage the integration. 

  • Improves cash flow: Significantly shortens the time from issuing a proposal to receiving payment. 
  • Ensures better accuracy: Sends sales entries from HubSpot to your books conveniently and reliably. Centralized information provides a single source of truth.
  • Saves time: Eliminates dual data entry and time spent correcting errors.
  • Provides confidence: Gives peace of mind that invoices are processed timely and accurately.
Time and Money 

HubSpot SVP of corporate and business development put it this way. “Businesses have become more aware of the importance of creating a great customer experience, and their efforts must include both front and back-office functions. Unfortunately, a great front office experience alone can’t make up for back-office friction.” 

This chart pulled from Intuit’s most recent investor presentation says a lot about the motivation behind the partnership with HubSpot. Intuit’s research shows that the biggest problem small businesses and the self-employed face is that, “attracting customers can take time, money and marketing expertise that I don’t always have”. 

 

Let’s Wait and See

While we’re excited to see what happens here, we will reserve judgment. This isn’t the first time Intuit has tried to help businesses with digital marketing efforts.

Thirteen years ago Intuit acquired Homestead with then senior vice president of Intuit’s small business group and now Intuit board chairman, Brad Smith saying, “This acquisition supports our growth strategy in small business by addressing an underserved need and continues Intuit’s move beyond financial management solutions into helping small businesses solve other important problems. Homestead helps us solve one of small business’s highest priorities.” 

Five years later the company sold off its website business, including Homestead, to Endurance International Group. And that is just one in a long series of acquisitions the company has made over its history. Think DemandForce, FullSlate, Boorah, StepUp Commerce to name just a few. For the sake of their shareholders, we hope their partnering approach works out better. That said, it didn’t seem to slow Brad Smith’s ascent to Chairman. 

Stay ahead of the curve and get the latest on Local straight to your inbox.

By submitting this form, you agree to receive communications from Localogy. You can unsubscribe at any time.

Related Resources

Are 3D Cities the Next Horizon in Local Search?

3D mapping was accelerated last week with a new developer tool from Here Technologies. It provides 3D mapping data for 75 cities for developers to overlay various data, such as places. Will this jumpstart new local search apps?