The Science of Sales Conversations with Gong's Amit Bendov | Chill Call

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1:00Amit Bendov:A.B.C. Always be closing. Film buffs might recognize that line from the 1992 hit Glengarry Glen Ross. It's an iconic and agonizing scene where Alec Baldwin berates and belittles his sales team in an effort to motivate them, which he ends by saying that half of them will be gone by the end of the week. Not surprisingly, this method of boosting sales team performance is likely to meet with mixed results. Fortunately, most sales organizations take a more sophisticated approach, but it's not always clear what's working. The CRM marketplace is valued at$120 billion, but despite the huge investment many firms have made, the impact on sales productivity has been difficult to quantify.

1:47Amit Bendov:And let's face it, most sales teams have a love-hate relationship with CRM systems. They just want to talk to customers. Today on Cold Call, we welcome Professor Allison Woodbrooks and case protagonist Amit Bendoff to discuss her case entitled Gong, Resonating Conversational Insights. I'm your host, Brian Kenney, and you're listening to Cold Call on the HBR Presents Network. Allison Woodbrook studies the psychology of conversation, why we say things we shouldn't and don't say things we should, and she created a course in the MBA curriculum called How to Talk Gooder in Business and Life. I love that title.

2:25Amit Bendov:Amit Bendoff is the CEO and co-founder of Gong, and he is the protagonist in the case we're discussing today. Thank you both for joining me. This is going to be fun. Brian, let's go. Thanks for having us. Yeah, I'm excited to be here. Thanks for inviting me. I think people will enjoy hearing about this case. I know we have a lot of listeners who are in the sales role. One of the things that HBS has been sort of taken to task on over the years is that we really don't do enough to talk about the sales function and to help people understand the sales function. And so I think this case, it does that, but it also does it in a very interesting way.

2:56Amit Bendov:And Allison, I'm going to ask you to start by telling us, what's your cold call to start this case in the classroom? Oh, Brian, I love it. Before we even get to the cold call, let me give you a little bit of context about this course, How to Talk Gooder in Business in life. Because in a way, it's a bit of a, it sort of mirrors what Gong aims for in that it's not a typical case-based course. They do a lot of practicing conversation, listening back to themselves, and then trying to do it better or gooder. For this case, before we even get into the classroom, in addition to reading the case itself and learning about Gong and thinking about gong, I also ask them to do an exercise.

3:43The first piece is think back to a recent conversation that you had. And I ask them to try and remember it and not just remember it, but can you rewrite it like a screenplay? Do you remember who said what in what sequence and how they said it, how you felt all of those things? The second piece is now go ahead and actually record a conversation and listen back to it. So by the time they get to class, they've done this recall exercise. What can we remember from our human minds versus what does technology help us hear when we listen back to an actually recorded conversation? So then when we arrive in class, the cold call is, does recording our conversations help or hurt?

4:26Amit Bendov:Interesting. That's a great way to start the class. A little nerve wracking, too, I would think. I mentioned a little bit about your course, which I do love the title. I want to know why you felt that Gong was a good case to write and how it relates back to the kinds of questions that you look at as a scholar. You wouldn't just like the title of the course. You'd like the content, too, Brian. I'm a behavioral scientist, and all of my research focuses on trying to understand how people tend to converse with each other. So describing all of the good things that we do when we talk to people. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs.

5:04It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. This episode is brought to you by Welch's Fruit Snacks. Back to school season can be tough on parents, but choosing a snack you and your kids can both get behind doesn't have to be.

5:39Stock up on Welch's Fruit Snacks, made with whole fruit, and now made with no artificial dyes. It's a snack kids already love, and one you can feel good about giving them. Go back to school with Welch's Fruit Snacks, now made with no artificial dyes. People and all of the mistakes that we make, and sort of deeply understanding what we do and why we do it. And then also using experiments to try and uncover strategies to help people do it better. And so this case was such an obvious match. And I think Amit feels the same way. That's what Gong's trying to do too. They're trying to figure out what do great salespeople say and do?

6:25and can we take their strategies and help other people learn to do those things as well? And so in a way, Gong's mission is very aligned with the mission of my research as a behavioral scientist and of the course. I love starting my course by talking about this case and the sort of alignment between our two missions.

6:45Amit Bendov:Great. Amit, let me turn to you for a second. First, I just want to know where the name Gong comes from. Can you give us the background on that one? I look for something that is short, does not have anything to do with the subject matter directly, but it's more like evocative. Gongs kind of like the sound, right? It's the audio of winning, right? When sales team, not in a Glengarry Glen Ross environment, but in modern, when someone just brings a new customer, they usually hit the gong. So this is it. It has a verb potential. You can say, I'm gonging this conversation. Equally important, it was affordable.

7:18Amit Bendov:It was like a thousand bucks from an Australian guy. That was it. That's perfect. I like that. I like the sort of reference to the Gong. That makes a lot of sense. Can you tell us a little bit about your background, I think, first, and then also what led you to this idea? This is a long story, but Gong is the first company that I'm leading. When I was a teenager, being a CEO in tech definitely was not part of the plan. I wanted to be in a rock band, and I actually started my career in recording studios. I was selling audio equipment to recording studios and concerts. I signed up for computer science in Tel Aviv University.

7:53Amit Bendov:Just for listeners, I was born and raised in Israel, and that's where I started. Like third year on campus, I saw this ad on a software company in artificial intelligence and multimedia. I wasn't sure what multimedia was, but I thought this must have to do something with show business. That's perfect for me. That company was actually ColdClick Software, recently sold for like one and a half billion dollars. But I was on one of the, I developed a product, one of the founding teams. And I did it in Boston, spent a lot of time around your campus on Harvard Square. And then we moved back to Israel, joined another company in the ERP space.

8:28Amit Bendov:And then I got a CEO job. My first CEO job was as a business intelligence company called Sisense. The company started in Tel Aviv. It was a small company. It was brought in to turn it around. And that's where I got kind of the idea for Gong. You know, it wasn't called Gong. And, you know, I wasn't even thinking about starting a company, but I realized how much information we're losing. In fact, we don't know anything about our customer experience and our people experience. Our customer support people and our salespeople, we're having like thousands of conversations a week with customers. But what would make it back to us as a leadership would be like very, very short summaries.

9:04Amit Bendov:99 % of the information gets lost. Just, you know, physically, there's about 6 ,000 words per hour in a conversation, right? If you look at 150 words per minute, what ends up in the CRM, CRM is the systems that people actually use to take notes. Customer resource management, just for those listeners who aren't familiar with the term. Think of it like a Rolodex on steroids. And we do like 30 words. So it's like 99 % never makes it there. And the 1 % is obviously highly subjective. It's what I understood that happened. So there is like one loss already because it's very easy to mishear and misinterpret it.

9:42Amit Bendov:Allison, you spoke about the value of recording. And I thought about a system that actually captures like information directly without asking people to enter anything and using natural language understanding to capture all that information. That's how it all started. You've managed the sales. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes.

10:14Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. This episode is brought to you by Welch's Fruit Snacks. Back to school season can be tough on parents. But choosing a snack you and your kids can both get behind doesn't have to be. Stock up on Welch's Fruit Snacks, made with whole fruit, and now made with no artificial dyes. It's a snack kids already love, and one you can feel good about giving them. Go back to school with Welch's Fruit Snacks, now made with no artificial dyes.

10:55Amit Bendov:Function, you've managed sales teams. What's that like? What are some of the challenges that you encounter as somebody who is managing and trying to motivate and trying to understand what the sales team is doing? It's a combination of joy and agony. And sometimes it could be like just on the same day. We deal mostly with things that are kind of complex. The salespeople, you know, some of them are very successful. Some are not. And we started to understand why it could be lots of things. So usually, you know, they'll put a field in a CRM system. So like loss, reason, if they don't win a deal, it'll be like no budget, no decision.

11:30Amit Bendov:They're ghosting us. It's never about like what I could have done better. Second, mentioned like the David Mamet play, right? It's just like, okay, it's like the leads are weak. The cards that are being dealt aren't good. Usually people don't believe them. They quote the movie like, the leads are weak, you're weak. But sometimes it's true. So I realized that we don't know anything really, but what's going on. And we can't rely on self-reporting for the reasons we've mentioned to know. All we have is like guessworks, beliefs, anecdotal evidence, hypothesis. books. There are, I think, 11 ,000 books on Amazon.

12:10Amit Bendov:Last time I counted on how to sell. Very few of them are based on scientific study and evidence and data. It's all opinions and experience at this company or that company. We're 2015. Google just had software that beat the world champion in chess, right? And AI started to diagnose cancer better than doctors. Can AI understand conversation better than salespeople? You know, probably yes. Let me pause you there because I want to go to Allison for a second because I have a more fundamental question than that, which is if salespeople aren't accurately reporting, you know, all the details and maybe fudging the reasons a little bit why something didn't go the way they wanted it to, why on earth would they want anybody actually listening in on what they've done?

12:58Amit Bendov:Like that would, to me, that takes away all my wiggle room, right? Yeah. So the first part of what you said, I hear what you're saying. I think it's a little, it's less about the salespeople fudging it, right? So the problems with self-report are multitudinous. It's both what you said, which is like, they're fudging it, but it's actually mostly we trust people and think they're good. They just don't remember or they don't have good access into causality. They don't know what they've done. They can't remember what other people have done. And so there's just no knowledge at all of like, what's going well and not well.

13:32And that's where the data, like Amit is saying, is quite helpful. To your question, Ryan, of if I am in this environment that's hard and complex, like Amit was saying, and maybe I'm not doing great, why would I want someone capturing that? And that's why we start the conversation in class of this case at this point of how does recording conversations help and hurt? And it raises deeper, more complicated questions. One of the questions that we debate in class is, do people really want someone listening in on their conversations? The first part of it is, well, who's listening? It's really valuable for you yourself to go back and listen, right?

14:14Part of the problem with conversation and why it's so hard is that we don't get to listen to the game tape and we don't get good feedback from others. So we're just not getting any feedback from anywhere to figure out what we're doing well and not well. And so having it captured so that we ourselves can go back, so salespeople can go back and listen to themselves and look at data analysis of what they've done, that is so valuable. And most of my students and most people feel this way. They see this very quickly. It's like undeniable evidence of what you're doing well and not well. It's also mortifying, of course, to listen to yourself.

14:52Amit Bendov:Kind of like listening to yourself on a podcast. Oh, yeah.

15:22hero, this is a job for Indeed Sponsored Jobs. This episode is brought to you by Welch's Fruit Snacks. Back to school season can be tough on parents, but choosing a snack you and your kids can both get behind doesn't have to be. Stock up on Welch's Fruit Snacks, made with whole fruit, and now made with no artificial dyes. It's a snack kids already love, and one you can feel good about giving them. Go back to school with Welch's Fruit Snacks, now made with no artificial dyes. Yes, I even I have an identical twin sister. So I've spent most of my life feeling like I'm listening to a weird, bizarro version of myself.

16:01And I still find it mortifying to listen to my own voice on tape. But then the concerns about recording conversations become a little trickier when you think about who else is going to listen, like who else is going to have access to this data? Is it my peers? And of course, there's like lots of learning you can do if you're going to share data with your peers. If you have a friend who's like killing it as a salesperson, don't you want to listen to what they're saying and doing and learn from them? But also, again, like demoralizing and that's hard. Do you want your manager to see you at your best and your worst?

16:38I mean, in theory, yes, but in the experience of it, that could be hard. And then when you think about who else has access to this data and who should have access to this data, then things get much trickier with data privacy and the balance between what can we learn versus like what is ethical? What should we have access to and what should we not have access to? And those privacy concerns are relevant for Gong's business. They're also relevant for researchers and scientists like me that I think the world will be grappling with more and more as more and more data is available.

17:12Amit Bendov:Let's just talk about CRM for a minute because many people listening probably are in firms that have spent tens of millions of dollars implementing Salesforce and other kinds of CRM systems. I teased in the intro that returns on that are somewhat questionable, I think, for a lot of these places. And I think salespeople, you know, have shown kind of mixed emotions about CRM systems. And it's a lot of work. It's a whole change management process. I really don't want to enter all this information. Amit, I'll start this with you. What do we know, if anything, about the kind of efficacy of CRM systems?

17:45Amit Bendov:These are important systems. They're not wrong. And they play an important role. I mean, at the very basic, you know, to analog who your customers are, what they bought, what their contracts are. So there's got to be somewhere to store all that information. And they have other roles. The important thing, it's the observation that led me to think about something like Gong and the time is what they're not doing. CRM was built for the leadership team. Before that, our salespeople were using like Rolodexes or simple software that they could like manage their accounts. But we wanted something that's central that we could run our reports like every Monday and see what kind of revenue we should be expecting.

18:24Amit Bendov:And we started chasing them to keep the system up to date. It doesn't help them in a fundamental way. They could run their 20 contacts in the Google Sheet. That's good enough. It's not the easiest thing to use. I mean, it's not super hard, but it's a chore, right? Then I need to go and do my homework, fill in the data. The data, as we discussed, isn't necessarily very accurate representing the reality out there. And it doesn't do a whole lot for me as a salesperson. It's good for my managers. Gone solve these two problems. First, it doesn't ask the salespeople for anything. You just talk and that's it.

19:01Amit Bendov:The system already, think of it like a fly in the wall that just captures everything and updates the system. and everybody needs to know what they need to know without anybody having to lift a finger. And second, it gives them some pretty useful insights. If anything, if I meet them with a customer, I can go back to listen to my previous conversation, just do some up to speed, give them some metrics, things like the Fitbit for conversations. How can it be more interactive, ask better questions, provide better experience to my counterpart? Allison, have you looked at CRM systems, maybe in the research for this case or in other contexts?

19:36It's funny, the shift from CRM, which has been so dominant in so many firms for so long, to this sort of new, this revolution to companies like Gong, mirrors a shift that I've had much more contact with myself in behavioral science. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast.

20:16That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. This episode is brought to you by Welch's Fruit Snacks. Back to school season can be tough on parents. But choosing a snack you and your kids can both get behind doesn't have to be. Stock up on Welch's fruit snacks made with whole fruit and now made with no artificial dyes. It's a snack kids already love and one you can feel good about giving them. Go back to school with Welch's fruit snacks now made with no artificial dyes. From sort of traditional social psychology methods like self-report.

20:56When we want to know if people are anxious, we ask them, Brian, how anxious are you? and you have to spend time telling me how anxious you are on survey items or something. There's all kinds of problems with this, exactly like Amit was describing. There's subjectivity in it. We don't remember. Like if I ask you, how anxious did you feel yesterday? You probably don't remember very accurately. And so there's been this monumental shift from self-report and observing big decisions like, are you going to marry this person? Are you going to ask for a higher salary to just capturing people's behavior and especially their conversational behavior so that we're not missing out on that richness and we're not requiring people to go through the effort of self-report.

21:41It feels like there's a revolution afoot. And the same is true in the sales domain here, moving from CRM to methods like Gong that are a lighter lift and provide just so much more useful data than self-report.

21:55Amit Bendov:So we've heard a lot about AI. I think some people are a little afraid of it, you know, and what the implications are, because we've heard some doomsayers, you know, talk about AI and robotics. And, you know, this seems like a fairly benign application of AI. But I'm wondering, maybe you could explain, Allison, how does Gong work and what kinds of insights can the AI actually provide? So AI is not, you know, my bread and butter. But let me tell you what I know about it. At least in the context of conversation, people should not feel threatened by conversational AI yet, and they shouldn't for a while.

22:29There is so much nuance and so much we have to learn about how human beings converse with each other. To me, there's this really big question too for conversational AI development, which is when we're designing chatbots? Are we aiming for them to be like human beings with flaws and all? Because that's what makes a lot of our conversations the most fun, the most interesting, the most challenging, the most uncertain, you know, the serendipity of it when you can uncover things you didn't expect to learn from each other. Or are we trying to design them to be some sort of perfect version of humanity that outshines humans and doesn't make mistakes.

23:13Both of those things, by the way, are decades away from actually happening, which is surprising because if you see little videos online from things like Google Assistant, right? Like there was this video that went viral a couple of years ago of this chatbot calling maitre d's at restaurants and making reservations. And it's very impressive, right? Chatbots can do really impressive things, especially in very constricted domains like making reservations. They can understand a difficult foreign accent. They can recover from disfluencies in the conversation. They can ask repair questions like, oh, I didn't hear what you said.

23:47Can you say that again? So they can do amazing things, but it's in very narrow domains for very specific purposes. And there's so much about human conversation that relies on our individual personalities and personal traits and our relationship. Like with each of you. I've now known Amit for almost five years and we've had really interesting touch points working together. Brian, same with you. And it's important when we converse with each other that I'm able to go back to our shared experiences and shared reality and both feel that we have this common ground together and be able to raise it in useful ways when we gather again.