Founder and CEO
00:00 - Ray Rike
Well, welcome to the next session here at SaaS Metrics Palooza 23. And I'm very excited and feel so honored that Amit Bendov, the founder and CEO of Gong, is going to be our next speaker. And we're going to be doing this as a fireside chat between me and Amit. So Amit, welcome to SaaS Metrics Palooza.
00:24 - Amit Bendov
Excited to be here, Ray. Looking forward to the fireside chat. Where's the fire?
00:30 - Ray Rike
Well, the fire is how are we going to get beyond the SaaS-acre that's happened over the last 12 months and get back to not only efficient growth, but higher efficient growth. And I thought, who better to discuss this than you? And last year, we got some feedback at SaaS Metrics Palooza. And they wanted to see highly successful CEOs and how they use metrics to actually inform their decision making and their journey. So I thought I'd start this conversation with you is, what are some of those metrics that you use to help really provide insight and inform how you're growing Gong?
01:06 - Amit Bendov
I love the question. First, metrics are super important, especially these days, right? When times are good, everybody gets a little sloppy, right? They just grow at all costs, grow, grow, grow. And they look at one metric, like a revenue or ARR. Now it's time for introspection and to really develop that muscle. So we look at a lot of metrics, both financials and operationals and everything from almost every department in the company, product, marketing, sales, support, obviously financials. Financials, we look at the key metrics that I think a lot of the, hopefully, a lot of the SaaS company look at, obviously, growth, efficiency, rule of 40, net dollar retention, gross dollar retention, retention period, but then also other things like usage of the product, engagement of users, and the correlation between all of these.
02:09 - Ray Rike
Are there two or three, though, because you have to track so many, you present them at your board meetings. Are there two or three that you've found, because you've had this hyper growth experience at Gong, that have been the most instructive to you, that you're like, I really think these two or three, Ray, are really the ones that I lean on a lot?
02:29 - Amit Bendov
Yeah, so we look at, obviously, NDR, growth and retention. These are the key metrics. Obviously, look at rule of 40. Margins are important. And the one that's more operational, but super important, is attainment, rep attainment, just how many people are hitting quarter or getting close to quarter. That always shows you the health of the business and the sizing of the team and where you are. So that's super important.
03:03 - Ray Rike
It's interesting that as a CEO, you're looking at rep attainment. Another one of our speakers is Bill Binch, the founding CRO of Marketo and Pendo, and now an operating partner at Battery. And he talked about how important it was, not only AE quota attainment, but AE capacity. Because sometimes we build these plans based upon a projected capacity. Let's say that's 30 million. But due to attrition on performance, we only have $25 million of capacity. So is that kind of the things you're talking about, Amit? Absolutely. Attainment tells you such an intricate story, right? Because there is a high level, but you need to know. Let's say that there are so many possible combinations. But let's see, it's possible that you're hitting your revenue numbers, but it's two reps that brought some very large deals, and everybody's failing. Obviously, it's not a healthy business, right? So that's like, I mean, it's good that you're hitting your overall goals, but you need to make sure that people are successful. If you're not successful, then you need to see, if it's a number, let's say, 50%, 60% are hitting their numbers, but 40% not, that's pretty normal. So it's probably a talent issue or coaching or enablement, right? But if nobody is, it's not the reps, right? It's something strategic to the company. It's either the macro, or your product isn't competitive, or something else. So you need to look, that's very telling, right? And it's telling you, where are the issues? Plus, even in days of their hyper-growth, if people aren't hitting, it means that you probably have too many people right now, which is fine, and not necessarily the need to get rid of people, but OK, wait for the growth to catch up with the number of people that you have. And once you see that everybody's at or close to border, I mean, then you could start hiring more.
05:06 - Ray Rike
Amit, this is kind of just an organic conversation. We're going to let it take us where it will, but you just brought something up that just reminded me of something I read just in the last few days. And it's under 35% of B2B SaaS enterprise reps are making quota, which I'm like, oh my gosh, right? That seems like it's more of macro issues than micro issues. So do you have any advice for other CEOs and CFOs out there? If you're seeing 25%, 30%, 40% of your AEs making quota, what to do to try to dissect what's the causes of that?
05:47 - Amit Bendov
Yeah, so you need to look at the entire chain and understand, I'd say, morally and professionally, it's your job. It's your job to make your people successful, right? I would never blame the reps, right? Even if we hired someone that isn't a good fit, or we haven't trained them properly, it's always kind of your responsibility. People are making a career bet on you. So that's job number one to make the team successful, right? More than anything else, and that's what I look for a CEO. They're building incredible teams, right, that are successful and have a winning culture. But you need to start diagnosing. Again, you need to look. If consistently nobody's hitting their numbers, then there is a bigger issue, right? It's macro, it's product, it's competition. Maybe leadership is not doing a great job. Either you need to calibrate what profile you're hiring. Certain companies need, let's say, if you're an early-stage staff, hiring someone from an Oracle or SAP or a Salesforce is probably not a good fit. You need people that are a builder, more hungry, and that thrive without having a playbook. And in later stages, you need other types of people. So do you have the right talents? Do a nine-box assessment of who is a good fit and who is not. Second, look at the training or just ask, right? Are you set up to succeed? Conversion rates are telling, where are we dropping, right? If it's like, they'll tell you where the leak is. And again, I don't want this to be like a plug for Gong, but this gives you a lot of the insight, right? You see, what are people doing? Are they doing what we're asking them to do, right? That's number one, right? You need to know it at scale. If they're not doing what we're asking them to do, OK, that's like coaching opportunities. If they're doing what we're asking them, but it's just not working, we're asking them to do the wrong thing, right? So now we can check for effectiveness and we need to correct what we're training the people, right?
08:05 - Ray Rike
Yeah, even though this isn't a commercial for Gong, you've got some unique insights that could be really valuable to our attendees here. And that is, we're seeing elongated sell cycles over the last 12 months. We're seeing reduced win rates. But Gong Labs has all this unique insight into some things that improve win rates, decrease cycle time, et cetera. Is there any information you could share that you've kind of gleamed over the last two to four quarters of things that can increase sales efficiency?
08:37 - Amit Bendov
Yes, absolutely. So first, it's free. So Google for Gong Labs. It's on LinkedIn. It's on a blog post. The frequency is quite good. So there's always insights on different topics. But if we look at the recent period, obviously characterized by a challenging macroeconomic, the access selling to CXOs. So we can measure how many people are involved in a deal, what types of positions. And it is clear that the cycles are much faster and the win rate is much better when you involve CXOs in a deal, which is always a challenge for a lot of salespeople. First, there is a real challenge, right? Some of those people don't want to talk to you, right? They say, OK, you talk to this person, right? But that kills win rate. So it's a very important skill to teach the team how to access, how to speak the language where actually C levels would love to talk with you, right? If you could solve a real problem for companies, they would love. The problem is most people just are doing it wrong. They're using the same messages for the mid-level managers with the C levels, and they get shot down. And the other way is the ability to systematically measure, look at every deal, what percent of your deals actually have access to power. And when you come to do your forecast or prediction, if we're not involving the C level on the buyer's side, the odds of this deal happening is actually a lot lower. The reps might not even be aware, but you should know and measure always, who are we talking to over there?
10:31 - Ray Rike
That's interesting for all the CFOs. 50% of our attendees typically are VPs of finance or CFOs. So they're going to really lock on to what you just said. It's like, hey, I'm getting the bottom up forecast. I'm getting my CROs down forecast. We're trying to triangulate on those. Maybe we use some weighted close rates by stage. But you just talked about having that insight into other criteria that are even more predictive of what's going to close, things like power and meetings. How does a CFO get access to that information? Because that seems really important.
11:10 - Amit Bendov
Yeah, so first, like for the overall, and maybe some companies are doing better, some are worse, but about 50% of deals that are forecasted to close in the quarters do not end up closing, right? The reason is, first, sometimes it's just the nature of the beast. There's some random, you know, someone just lost their job and, you know, things happen. But a lot, most often, it's just like misjudgment on the rep side because it's built on sentiment. You know, put it in a commit, most likely, probability. And it's hard to keep track of everything that needs to happen. There's a lot of things that you need to check, pretty much like every box, like in these days. It's very easy. So if you use the right AI technology to scrutinize all the deals, it will review, have we discussed pricing? Do we talk to, who are we talking to? What's the level of engagement? Like, how is the customer responsive? What's their sentiment? How is this progressing? Any concerns? All of that gets input in the forecast. And juxtaposed with the refs' sentiment, right? You need both, right? But when you see them and you see there is a big gap, that's the point where you start to ask questions. It says, hey, why are we seeing like a 3rd million difference between what the team is telling me and what the AI is telling?
12:34 - Ray Rike
And I'm sure you eat your own dogfood at Gong. So, you know, you get the forecast from revenue leadership. Then you also have the AI. What are some of the one or two kind of major insights you've seen from those two? Is it all about executive team involvement in the buying process? Or are there other things you see sales teams missing when it comes to accuracy of forecasting?
12:59 - Amit Bendov
Oh, it's, I wish it was just the executive, because that's actually not so hard to train people. It's a skill that people need to develop. They develop a little confidence. You need to watch for it. You need to push for it. You can incentivize people to do it, but that's not like super hard. Just people don't do it all the time. But yeah, they're, unfortunately, you need to get almost everything right to win a deal, right? You do like one or two things wrong and game over, right? This is so easy, right? The proof is, you know, most ring rates are 1 out of 5, you know, 1 out of 10 sometimes, right? So that tells us that it's way more likely to lose a deal than to win a deal, right? It's obvious. So one of the things that we've measured is just basic follow-up, right? Just you said that you're going to do something, do it and do it promptly, right? So let's say I had a conversation with a customer who says, I'm going to send you the technical specification document for the hardware that you need, right? What's the best possible play? You hang up the phone or you get off the Zoom call and the document is already in the customer's hand, right? So we saw two things. First, the faster you send, the faster you get a response back. If you do it like on the spot, hey, here's the document we discussed, right? You might get something within minutes because that's in the message. But if you wait a day, you might not get a response like two or three days because that sends a message of sense of urgency to the customer. Okay, maybe it's not so urgent. It looks a little bit unprofessional. Now, good salespeople know this. It's not that they don't know or don't want to, but they're busy, right? It's very easy. They manage like, you know, 10, 20 deals at any given time, right? Sometimes more. And it's so easy to drop the ball. So the data shows that over a third of the reps drop the ball on at least one critical activity per week, every week. Now, the follow-up, only 50% of follow-up action items is happening within 24 hours. Everything else is 24 plus. And again, usually it's not because people are lazy or don't know what they need to do. It's just so hard to do it. So that's the frontier right now to have AI do this on their behalf and stay on top, almost giving like an EA that'll say, hey, like, here's your email. You should call Ray. You should call Bill Binch, right? Here's a draft for you.
16:11 - Ray Rike
Amit, you just blew me away. And I bet a lot of the listening audience is like, wait a minute. You're saying almost or over 50% of committed follow-up actions from that conversation, hopefully being recorded via Zoom, et cetera, aren't being executed for 24 hours or more. I bet you also, I'm not asking you to share it right now, but I bet you have a correlation to how responsiveness aligns to win rates. That if you do it within 24 hours, you have a much higher win rate.
16:41 - Amit Bendov
Absolutely, yeah. I think if you don't do it within 24 hours, there's already like a 14% drop in win rates. I don't know. It's that simple thing, right? I'm not even talking like access to power. Just do what you said that you're going to do and do it promptly, 14% and just on that.
17:02 - Ray Rike
So these are basic things that you think would be easy, but with AI and automation, we can actually help guide and remind the salesperson, hey, you committed to this. Have you done it yet? Or even say, hey, we've seen you haven't followed up yet via email. So you can bring all that together in one spot, Amit.
17:19 - Amit Bendov
Yes. Even like this CEO is using it. So I speak with on average two customers per day. Sometimes just to create a relationship with the largest customer. Sometimes it's customer having issues. So I want to make sure that we show up and you can imagine what my schedule looks like. So I'm on a call, I'm meeting on the next, they're all back to back and I've finished like an evening, right? And then it's like hard. So I actually have like an AI EA, right? Says Amit, like here's a thank you email to Ray. Here's a few points that we've discussed. Here's a draft. Sometimes I just hit send. Sometimes I might tweak a few words if it didn't get it. It's just not exactly what I want to say, but you increase your likelihood of winning like in such an easy way that's incredible.
18:20 - Ray Rike
You know, it's interesting, even though we were going to make this conversation about AI, we do have several people speaking on AI today and you've been one of the leaders for the last few years, applying it to initially conversations and now overall revenue management. So do you see, I see a lot of people are saying everybody's going to have this AI assistant, digital assistant, co-pilot. Is that kind of how you're seeing sales professionals really using AI as almost like that AI assistant that helps them stay on top of everything? Is that where it's going? Yeah, absolutely. Well, I'd say more than EA. I mean, that has been like the vision for Gong like all along when we started like 2016 that AI will remove the drudgery and help companies make like much more informed decisions. Today, people are working hard to capture the data and update forms and update managers one-on-one meetings and the companies still don't know what's going on. Why is it like 30% attainment that you just said? Why is this happening? Why is our win rate one out of 10? What's our competitive win rate? Nobody knows. It's ridiculous. That's the vision. And this is not like science fiction. It's happening today that an AI EA is helping reps. That's the engagement solution like stay on top of their pipeline and deals. And what we're working towards is actually do as much work as we can on their behalf. What if you just hang up the call and the email just goes out? Today, we're not doing it because we're still not 100% sure that we don't want to like any embarrassment. So we want a person to always like validate – think like a self-driving car, right? You could see it happening. We're almost there. Right now, we're in assisted driving, right? But where it's going is actually to do a lot of that work and you just talk to customers and AI does the worst, sorry, does the rest.
I love that. But I've taken you from, as a CEO, how you manage your metrics all the way down to how artificial intelligence can help sales performance metrics get better. You and I were talking right before this session about you're going to a go-to-market conference right in Nashville being put on by Pavilion and it's all about alignment. So I have a last question for you is about alignment. How do you ensure that your revenue leaders head of sales, head of marketing, head of customer success, understand how the metrics and performance data that they're presenting to you and the executive team is correlated to the things your investors care about?
Well, hopefully, if you hire someone great, like a great sales leader, they already know. So managing up is a key skill that should look for an executive to hire. But it's a lot of it through iteration, right? We speak on an ongoing, both with the board and ourselves, and know what the investors want to see, what I want to see, what the sales team have, because we have hundreds of metrics, right? Sometimes it's just way too much information, right? So I say, here are the things that they really care about. So for us, sometimes I'll get a report that says, okay, I want to like broken down by this. For example, we're launching, we're about to release a new product, Engage, which is kind of the AI EA, and we want to make a decision, like if it's ready for prime time or not, or we should wait, right? So what I ask the team, I want to see number of support tickets that are being open, divided by the number of daily active users, right? So I want to see the number of tickets go down, trending down, below, and the number of users go up, right? Once it goes to a threshold, I say, okay, we're good to go. So it all depends on what you're trying to accomplish, right, and the decisions that you're trying to inform.
22:29 - Ray Rike
Yes. And the other thing I would say with using AI, we always talk about lagging indicators, leading indicators. With AI, you can have more unique insight into what's truly correlated. What really leads to a better CAC payback period? Yeah, we know it's win rate, but then what increases the win rate? It's A, B, and C. So you've got that entire cascading of aligned metrics at every level, right?
22:25 - Amit Bendov
Right, right. And the hope is that AI will actually help you improve the metrics, right? If you think about it, you could say, let's take like an operational metric, right? Let's say I want to make sure that my team is generating like $3 million of pipeline every week, right? Normally, there are people like watching this and, you know, are we on track? Are we like behind our heads, right? Imagine like AI watching those metrics and start taking actions to bring them back to where they need to be. It's just like an autopilot on an airplane, right? So you want to go from like Paris to New York, right? You give the system kind of your destination. And they know kind of here's the weather, here's the fuel consumption level that I want to get. This is the time that I need to be there for the gate to be open. You figure it out. So you tell the system what your goals are. It has all the measurements and all the data to make a decision, and it drives the system. So we're looking at not just doing four metrics, but actually to maintain those KPIs.
24:06 - Ray Rike
I can just imagine a CFO up there right now saying, well, wait a minute, wait a minute. With AI, I could say, okay, I have that $3 million pipeline goal for this month. I can actually, in an automated way, say this channel is not performing as well from a conversation to a qualified lead, or this paid channel is not producing at the level we need. So you need to look at that and reallocate budget to the higher performing channels, and you could look at that real time.
24:33 - Amit Bendov
Absolutely. Yeah. The channel is it, because it could, okay, I'm $3 million short. I can get it from existing accounts or new logo, which one is performing and allocate that. Yeah. It's happening. Right.
24:46 - Ray Rike
Well, as one of the visionaries, entrepreneurs who brought AI to the revenue generating process, first of all, I thank you so much for being a speaker here at SaaSmetricspalooza. Is there any last-minute either inside your advice you'd like to leave our audience with?
25:04 - Amit Bendov
Well, I think this is, as we said, these are good times where, if you're not, most companies aren't growing as fast as they did in 2020 and 2021, this is a good time to get your act together on metrics. Make sure that you understand them, double click on everything, understand what they are and what really matters and how to improve. And that's when the market picks up again, you'll be at a much better position to take advantage of that tailwind.
25:36 - Ray Rike
And as you said, I'd encourage everyone to just Google Gong Labs, look for all the amazing insights and metrics and what impacts, win rates, et cetera, there. Amit, how can people reach out to you or follow you? What's the best way?
25:50 - Amit Bendov
Well, I'm kind of like, I'm on LinkedIn. So Amit Bendov, there aren't a lot of us. I'm the one with the shades on, right? So it's not hard to recognize and the company is Gong.io. Feel free to reach out, say hello.
26:06 - Ray Rike
Amit, thank you so much. Thank you for what you've done for the industry and thanks for sharing some unique insights that maybe some of the CFOs and CEOs out there in the audience today didn't, did not realize was possible. Take care. And everyone, our next session will be starting in 10 minutes. Thanks, Amit.
26:23 - Amit Bendov
Thanks, everybody. Enjoy the day.