In our Software Leaders series, proven operators from the world’s top software companies share learnings and resources for teams earlier in their growth journey. This edition was based on a working session held between Expedition operating advisor, Udi Ledergor, and several leaders from our portfolio companies. Udi has led marketing at Israel-founded Gong for over 6 years, joining as the first marketing hire and employee number 13. At Gong, Udi has helped build one of the world’s most respected B2B go-to-market engines, with the company growing from 11 to 3,500 customers and $200k to hundreds of millions of revenue during his tenure, most recently valued at $7.25 billion.
Enterprise sales is hard, but it’s worth it
While selling to SMB or mid-market can certainly be the basis for exceptional software companies, Udi is a strong advocate for the value of enterprise sales.
There are well understood benefits of the enterprise segment – defined at Gong as customers with >1k employees – including higher initial revenue, better expansion potential, multi-year deals and typically lower churn. However, winning in the enterprise has two extra strategic benefits: 1. valuation multiples of software companies with a higher proportion of their revenue coming from enterprise customers are higher on average; 2. securing well-known enterprise customers can cement your brand as the category leader in your market and help with competitive positioning.
That said, these benefits come with significant hurdles including longer deal cycles, added complexity of multiple individuals involved in the purchasing process, and tighter security & privacy requirements, among others. A dedicated enterprise marketing strategy based on the principles of account-based marketing (ABM) for top target accounts can be the key to unlocking enterprise customer acquisition success.
Four attributes of a successful sales motion
1. Clear ICP – One of the things that Udi believes has given Gong such strong momentum is a laser focus and discipline on catering only to their ICP and severely limiting the resources they allocated to other types of explorations. This ICP should be highly specific, for example including the geographic location, headcount, target buyer job title, existing tech stack and relevant behaviors. Your ICP needs to be something that you can go deep on and be the best at.
2. 1:1 or 1:few motion – Enterprise sales is tailored by design. Given the size of the deals in question, a successful approach will be based on one-to-one interactions, or at most ‘one-to-few’. More on how Gong approaches the topic of hyper-personalized marketing below.
3. Multi-threading buyers – One of the data points that Udi has observed is that deal value increases when more individuals within a target account are involved in the sales cycle – if the committee deciding whether to purchase your software exceeds 20 individuals, the deal size tends to be over 3x larger than when under 10 individuals are involved. Successful enterprise motions embrace this complexity and address all relevant stakeholders. At Gong, the more team members they themselves have brought into the loop on the enterprise sales process – e.g. AEs, sales engineers, executives – the higher the win rate.
4. Land & expand – While it can be tempting to push for the largest possible upfront deal, the most successful enterprise motions look for a reasonable ‘land’ deal that positions you to build trust and work up to the full potential annual contract value over time.
In ABM, to be ‘personalized’ is not enough. We must be hyper-personalized
Personalizing by <name> and <company name> is not going to cut it in enterprise. Target buyers probably answer one in a hundred reach outs, so you need to put in the work to make it count.
Udi has adopted an enterprise strategy which is segmented into a first group of the top 50 target accounts, which receive dedicated 1:1 ABM, followed by a second group of the next 300 target accounts which receive 1:few marketing programs. With the cost of generating each SQL in strategic enterprise accounts often exceeding $10-20k, the stakes are high and it requires hyper-personalization at each stage of the funnel. Whenever and wherever a target individual encounters your brand, they should be met by a thoughtful 1:1 experience with their own company at the core.
This hyper-personalization also extends beyond ads and into all other touchpoints. Gong’s SDRs have been known to sift through the quarterly earnings calls of publicly listed target accounts to identify challenges mentioned and then send an annotated version of the transcript to their prospective customer, highlighting with sticky notes the areas where Gong’s product could address the strategic pain points.
Taken together, accounts subjected to this kind of ABM program (combining funnel-based and person-based marketing) at Gong have ended up with more buyers involved in the deal process, larger deal sizes and shorter sales cycles.
We sell to humans. We must foster deep relationships
“Mary is selling to John, not Acme is selling to IBM.” At the heart of Gong’s approach is the simple insight that there is a real person on the other side of the zoom call with similar, human struggles to you.
During COVID, Udi’s team saw that several of their customers and target accounts were struggling with looking after kids at home. They sent physical, unicorn-shaped pinatas to those prospects who are parents with hand-written notes to say they hoped their kids enjoyed playing with them. The response rate was close to 100%.
Events are typically the largest budget area within enterprise marketing, with fully-loaded costs historically running into six figures for regional events and seven figures for global flagship events. Post-COVID, the bar for events is higher than ever, with large global conferences being ousted in favor of local, intimate, high-end dinners that give attendees the ability to gain value through peer networking.
The ideal event should deliver delightful, memorable experiences while creating meaningful relationships. One personal highlight for Udi was organizing a virtual cooking class for customers and prospects during lockdown – it had nothing to do with Gong’s product but everything to do with treating their customers and prospects as humans.
Agreeing on the ‘currency’ between sales and marketing is key
When welcoming new joiners to Gong and explaining the purpose of the marketing team, Udi uses a simple definition: “the goal of marketing is to make sales easier”. It’s a servant leadership mentality and this relationship and trust between marketing and sales is at the heart of any successful enterprise sales motion.
Sales needs to understand the value marketing brings to sales and vice versa. The ‘currency’ of this value exchange is often a source of friction – marketing might naturally want to get rewarded for achieving high social media engagement or booth visits at a conference, whereas sales only cares about highly relevant leads and signed deals. You want the currency between marketing and SDRs and sales to be something that everyone understands and agrees on. “And most importantly, that marketing doesn’t get to grade itself on.”
At Gong, the highest funnel metric that marketing reports on is SQLs, rather than MQLs – which means that it’s the sales team rather than the marketing team who gets to confirm if marketing reached the right target. In Udi’s experience, trust and co-operation is created when everyone in the go-to-market engine agrees on the currency and qualification criteria for an SQL, SAO, revenue, pipeline or anything else that sales understands, and then aligning marketing to that.