Gong IO: Cutting Through the Noise

Intro

Up until recently, the development of sales professionals was severely constrained. Often considered more of an art than a science, a great salesperson was usually chalked up to innate talent, rather than a rigorous training plan. Gong.io (Gong) sought to change that. Leveraging AI on recordings of sales professionals, it looks to give feedback to those same professionals on ways that they can improve, increasing sales, decreasing average customer acquisition costs, and simplifying evaluation and compensation.

How Gong Works

Gong is a software as a service (SaaS) platform focused on the training of sales professionals. It all starts with a simple software extension for whatever video or calling platform your salespeople use. When added to a call, it records the conversation. It also will utilize data from other sources, emails, voicemail, and internal Customer Relations Management (CRM) software. Compiling all these together, a trained AI parses the data and provides feedback to the individual, the manager, and -if desired- the greater organization. Gong has a massive amount of data on the sales process across industries and companies, and leverages this to provide its users with the best path forward. Think like a computer with a chess library giving you guidance as you play a game with a friend. Gong will tell you if you’re talking too much in a call, if your not asking the right questions, beyond that it will see who at the organization your engaging with, if you should reach out more, over what medium you should communicate. Gong wants you to be the best salesperson possible, and it also wants you to be a datapoint to help it learn and grow.

How it adds value

The insights gleaned from the above are hugely valuable. Keep in mind, before Gong, sales organizations were running in the dark, and Gong -maybe somewhat proudly- likes to proclaim they invented the field of “Revenue intelligence”. While that may be overstating their role, they’re not overstating the benefits. Firms using Gong have lower customer acquisition costs, increased sales, and a more sustainable sales pipeline. Hiring and firing in sales is a constant practice, and metricing professionals can be difficult. Did they not hit quota because they were not a great salesperson? Or did a pivotal deal just fall through due to factors beyond their control. Shining insights that can help answer that allow organizations to retain the best, train the middle, and move on the worst.

A rather unique feature Gong uses to create value is also their role in the greater SaaS ecosystem. Good sales performance is critical for SaaS businesses, and one or two seasoned sales professionals can make the difference required to have revenue for raising either a next round, or being fully cash flow positive. Gong knows this, and makes it’s product incredibly easy for these firms to use, both from an operational side and from a pricing side. They make it easy for a nascent company to use their product, and are sure to capture the monetary upside as those organizations succeed and grow.

Current Challenges

Currently, Gong faces two main challenges as it looks to grow beyond its current size. The first concern is market competition. SaaS is a notoriously high-margin business with a winner-takes-all mindset, so competition is never far away. Smaller players are rising up with more focused and specialized products and nipping at Gong’s heels.  Firms like Clari are looking to better integrate beyond just the sales organization to create a full-service organizational tracking tool. Avisio is doing very much the same thing as Gong, raising the scary prospect of a price war. At the same time larger players have seen Gong’s success, want it for themselves, and have plenty of resources -both in capital and data- to throw at their products in an effort to unseat them. Microsoft and salesforce are trying to replicate Gong’s success within their own incumbent platforms, which could prove to be an extremely hard moat to bridge by Gong’s team. Microsoft, for example, could integrate Sharepoint and Github functionality for a true-cross disciplinary suite. Salesforce, who’s main customers are large sales organizations, also benefits from a huge incumbent position in most firms, and could likely reach customers faster than Gong.

The second concern is around privacy of data. A constant concern across tech companies, this is exacerbated by Gong’s usage of AI. As part of the value creation process, Gong takes conversations, analyses them, and gives feedback. Not only does this feedback go to individuals, but across teams, and even organizations, in an effort to share “best in class” learnings. However, an AI has to be particularly savvy if it wants to distinguish what it should share -based on quality of learning- from what it CAN share -from a security, privacy, and confidentiality standpoint. A lot of sales processes are highly confidential, and in some industries both sellers and buyers are dealing in confidential information. A lot of customer discovery involves understanding pain points, which requires vulnerability from potential customers. Vulnerability which may not be easy to find if they know an AI might be blasting out parts of their conversation to a wider audience.