Gong’s software captures sales conversations across phone, email, and web conferences and uses AI and machine learning technology to analyze the data. The software then presents the sales team with critical insights that help salespeople improve their sales performance. In essence, Gong’s software helps the company generate more revenue by having better sales conversations. The company raised $200 million in 2020, bringing the company’s valuation to $2.2 billion.
Gong’s software provides real-time insights to salespeople so that they can have better sales conversations. Some of the key insights provided by the software are highlighted below
- Talk ratio: The percentage of the call during which the salesperson spoke versus listen.
- Longest monologue: Duration of the longest speech made by the salesperson.
- Longest customer’s story: Duration of the longest customer-talking segment.
- Interactivity: Score between 0-10 that shows how often the conversation switched back and forth from salesperson to customers.
- Patience: Average duration the salesperson waited after the customer completed talking before the salesperson started talking again.
Using these insights, Gong’s clients can leverage in-depth analyses and provide tailored and automatic coaching to its salespeople. Looking at these data, sales managers can now effectively coach underperforming salespeople to replicate what top performers do. By understanding the exact behavior underlying successful sales conversations, Gong’s clients can now turn underperforming salespeople into all-stars.
In addition to this, Gong’s software helps speed up the onboarding time of new salespeople as it allows the company to train new hires faster and help them have successful conversations right from the get-go.
Gong uses natural language processing (NLP) technology to transcribe and analyze sales conversations. Gong claims that its software goes beyond the traditional supervised machine learning algorithm. The company was awarded a U.S. patent for its technology that uniquely understands topics in conversations.
Gong sells its software to companies of all sizes. Its customers include companies like Linkedin, Zillow, Shopify, and Hubspot. Gong charges subscription fees based on the size of the company’s sales team.
Over the years, Gong has done well in the United States with more than 1,000 customers, quickly gaining its dominance in the Conversation Intelligence market. In 2020, the company received the highest number of reviews (1273), satisfaction score (92), and market presence score (96) as reported by G2. It has overtaken previously established Conversation Intelligence players such as Chorus.ai, ExecVision, Call Rail, and SalesLoft.
Opportunities and Challenges
With proven success in the United States, Gong now set its sights on global expansion. While there is strong demand from international markets with companies across the world expressing their interest in leveraging the conversational insights offered by Gong’s software, international expansion presents several barriers.
- Language: Developing Gong’s software in new languages would almost be like developing a new product from scratch as Gong is required to build a new database to run its NLP algorithm. Several languages such as Chinese proved to be more difficult than others given the language’s complexity.
- Cultural nuances: Given the difference in culture, Gong will need to find ways to capture the unique nuances in conversations for the selected country. For example, westerners may value extended greetings such as small talk but in other parts of the world, the same might not be true. That is, what is considered to be good sales practices in a particular country might not be true for other countries.
- Cost and coordination: Setting up local offices and hiring local talents may prove to be expensive and difficult for Gong. In addition, global expansion makes it more difficult to keep the overall organization aligned. As products are being updated, it is important that customers across geographies remained up-to-date to ensure that they are receiving consistent experiences.
Despite the challenges that loom ahead, global expansion presents a tremendous opportunity for Gong. To expand successfully, Gong can consider employing the following strategies.
- Prioritize countries strategically: Gong can overcome the first two barriers, at least initially, by prioritizing its expansion into countries that use English as their primary language (e.g. Canada, United Kingdom, Australia, and New Zealand.) Expanding to these countries first meant that minimal effort will be required on the back-end to conduct product adjustment. The company can then further prioritize the list by focusing on countries that are similar to the United States culturally.
- Adopt a new organizational structure: To minimize cost and maximize coordination, Gong should adopt a new organizational structure. Particularly, I would advocate adopting a Matrix organizational structure with Country heads and Product heads. Country heads can lead a unified country strategy and Product heads can ensure that products stayed updated with the latest features.
Through my direct exposure to Gong’s software, I was blown away by what Gong’s software is capable of. The transcripts were accurate and the insights provided were tremendously valuable. As Gong’s software continues to learn from larger data collected enabled through a larger number of customers, it is evident that the software will become even more sophisticated. I believe that Gong will be able to expand successfully into international markets and become the world leading’s conversation intelligence company.
“Sales Software Startup Gong Reaches $2.2 Billion Valuation After Seeing Revenue Triple During The Pandemic,” Forbes, Aug 12, 2020
“Gong raises $200 Million to surface sales insights with AI,” Venturebeat, Aug 12, 2020
“Gong, AI for sales teams, raises $200 million at $2.2 billion valuation,” Reuters, Aug 12, 2020
“Gong Named One of America’s Most Promising AI Companies by Forbes,” Prnewswire, Jul 07, 2020
“Gong, an AI-based language tool to help sales and customer service reps, nabs $20M,” TechCrunch, Jul 12, 2017