When To Design A New Category: Lessons from Gong CMO Udi Ledergor

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Udi Ledergor and the team at software rocket ship Gong had already secured their place as king of the “Conversation Intelligence” category.

That’s why I was so shocked when they dropped this phrase from their messaging and began to pursue a new category – something they were calling “Revenue Intelligence.”

After all, this was the first time I’d seen a B2B SaaS company shift gears on category design so quickly.

Fortunately, Udi Ledergor, Gong’s CMO, provided some answers when I interviewed him on B2B Growth.

It all has to do with the opportunity size of the category itself.

You see, Conversational Intelligence is a fine category, but it’s not huge (or at least, not huge enough for Gong’s ambitions). It’s a category of software that’s typically used within a sales team, but the C-suite doesn’t necessarily see it as a strategic asset.

Find out more about Udi Ledergor’s decision (and how he managed to pull it off) in our interview below.

You can also find the episode on Spotify, Apple Podcasts, Google Play, or Stitcher.

John Rougeux:
Okay. Welcome to another episode of the category creation series on the B2B growth show. I’m John Rougeux and with me today is UDI let her Gore the, did I say that right? Rudy? You did. Perfect. Good deal. He is a COO of gong.io and we’re here to talk about a lot of good stuff around category design at gong. So Judy, thanks for being on the show today.

Udi Ledergor:
Thanks for having me, John. Pleasure to be here.

John Rougeux:
All right, well I know a lot of our listeners will have heard of you. You know, the gong team is pretty prolific on on LinkedIn and some other channels and I know you just recently spoken hyper-growth, but for someone who doesn’t know about you or know much about gong, just can you give me a brief bio of yourself?

Udi Ledergor:
Sure. so myself and then maybe gong, which is more more interesting. I myself am a five time VP marketing. I’ve had the pleasure of serving at companies both private and public and different sectors and different countries. Currently had gone for the last three years. Having a blast. I started in the gong team in Israel three years ago and a little over a year ago, I relocated to be with the rest of my growing team here in San Francisco where our entire go to market team is.

John Rougeux:
Oh, great. Good, good stuff. Just real quick, what’s I’m not real familiar with the, you know, the tech scene in Israel. How does that compare to San Francisco?

Udi Ledergor:
I think outside of the U S Israel actually has the second largest tech scene. So it’s surprising. I heard a stat that, I don’t know if it’s still accurate that on, on NASDAQ after us and Canadian companies, Israel has the most companies listed on NASDAQ, the most tech companies. So Israel has a pretty, pretty huge

John Rougeux:
Tech scene. Really. No, I would not have guessed that it had a, it was like right behind the U S and Canada. It does. Yeah. Yeah. Crazy. Good deal. All right, so the last few guests I’ve started asked the same question to kind of kick off our episode. And so I want to ask you the same question to see how your answer compares. It’s a simple question, but the answer might be long. It’s a how do you define category creation? How do you define category design?

Udi Ledergor:
Oh wow. It could have prepped me on this one, John. How do I define category design? I think category designer creation is the result of a process led by a company

Udi Ledergor:
After which the market, including customers, employees, investors, and analysts will have agreed that a new product category was created that did not exist before the company initiated its efforts. It sounds maybe a little mechanical, but I think we’ll all know what, when, when we see it. So, you know, a company like Gainsight can definitely credit itself for creating the customer success category that there was no category before that the term was hardly used and they definitely took it to the next level. You can look at companies like drift who coined conversational marketing that did not exist before that. It, you could argue it’s still an early stage of that category, but it’s definitely a term that’s widely accepted now and, and being used if, if, if only described that one company. But that’s, that’s a start.

John Rougeux:
Sure. So the way you see it, it’s, it’s not just a company talking about itself in a unique way, but it’s more about the market or you’re kind of third parties recognizing and identify that category as a thing that exists, that did not exist prior to that company coming about,

Udi Ledergor:
Bringing it to light. Here’s, here’s a tweet, this moment for you. I think that that claiming that you’ve created the categories kind of like claiming that you’re a lady, if you have to say so you’re probably aren’t. Right. Okay. So if you’re the only one saying that you’ve built a category, you haven’t built a category.

John Rougeux:
Yeah, yeah, yeah. Okay. So don’t worry so much about trying to make that claim for yourself. I mean, go about it. If you think that’s the right move, but don’t claim you’re a category creator.

Udi Ledergor:
I mean usually you’re going to be the only one initially you’re going to be the only one talking about it because that’s how it works because you’re creating something, you need to explain it to the world. But if, if after a decent amount of time, this can be two, three years, sometimes 10 years, but if the rest of the world hasn’t caught up and agrees that this is a category, and I would even add to my previous definition that if other companies have not attached themselves to this category, you don’t have a category, you just have a product with a weird description that no one really gets. You need other companies to want to attach themselves to that category and you want customers to have a budget line, line item for that category. You want investors investing in competing companies in that category. Then you know you’ve got a category.

John Rougeux:
Yeah. I like that idea of I’m looking for a budget line item for the category because that means they are looking for a solution within that space, right? Yep.

Udi Ledergor:
That is the Holy grail. That is the Holy grail. If you look at categories that didn’t exist 15 years ago, let’s take marketing, email automation. 15 years ago, no one had a budget for that or a few hat today. Every single marketer on the first day has a budget line on him for marketing, email automation and they know that the vendors in that space are going to compete for that budget line item, but they don’t have to create the budget line that that is the Holy grail of category building. You need a budget line item. So the argument is which tool am I choosing? And for that you need competition. Like I said, I know very few products that are one product in the category that have a budget line item. Even something as as broad as CRM, everyone, every sales organization, every company has a budget line item for CRM, but there’s several vendors to choose from. Everyone has a, any company who has marketing, has email marketing as a budget line item, but you have several options to choose from. That’s a really good sign that you’ve built a category.

John Rougeux:
Sure. And some of those spaces, it’s a, you know, even of choices to choose from. Yeah. So let’s talk about gong on, on a previous episode. We interviewed Chris Orlov who at the time was I think director of product marketing and we talked about conversation intelligence and even even then, there was a few months ago, but that felt like it was still kind of early stages. We certainly wasn’t 10 years in. Like you mentioned a moment ago and I, and, and recently you guys have shifted to revenue intelligence. So yeah, share some more background on that with me.

Udi Ledergor:
Sure. Happy to. So, so gong launched just over three years ago, our first beta product. And at that point we, we followed conventional wisdom, which was avoid category creation at all costs. It’s one of the most expensive farfetched marketing exercises that company can do, especially in early stages. And so we did a, the, the smart thing to do, which was to look for a category that we could latch onto that has already gotten some market traction, that there were players in the space that were investors who knew what it was. There were customers who knew what it was. There were analysts who knew what it was, and that’s Facebook’s conversation intelligence. There were a couple of very early stage companies with little traction, but, but it was, it was a thing. And so we, we defined ourselves in that category of conversation intelligence and we quickly became the leader of that category as, as you know, many would argue if you look at the reviews sites like G2 or Capterra gong is clearly the distant number one in both satisfaction score and number of reviews on each of those platforms.

Udi Ledergor:
But that wasn’t enough for us. And then

John Rougeux:
What do you mean when you say it wasn’t enough? Like there wasn’t enough attention or demand for conversation intelligence?

Udi Ledergor:
I’ll explain. It’s a great question. So when I say that wasn’t enough, this is what I mean. The, the category was definitely getting and is getting a lot of attention in recent years. I mean, you can look at Google trends and, and, and the number of mentions on social media, on conversation diligence, it’s a real thing now. And then we, we did what might be a, in hindsight, a suicide mission and we decided we want to break away from that everything we’ve managed to build and define ourselves in the last few years and we want to create a new category. And why did we do that? Because as our business evolved, we started like most businesses selling to small and medium sized businesses, otherwise known as SMB companies. Later on shifting also into mid market while keeping a really strong sort of hold on the SMB market.

Udi Ledergor:
And earlier this year we started going much more heavily into enterprise and strategic accounts. I’m talking about companies like LinkedIn and ADP and PayPal and many others. I wish I have permission to name their names, but they’re on our very impressive client roster. And what we’ve found that when we go to those enterprise strategic accounts and we’re trying to get to the chief revenue officer, the CRO who is our ideal buyer at this stage. And that has to do with what we said earlier about the budget line items. So let me explain. If I’m trying to sell marketing automation to a COO, I know they have a budget line item. I can go talk to a marketing ops person because I know she’s probably responsible for picking the actual marketing automation system and she has a budget for it. She doesn’t have to go fight for it.

Udi Ledergor:
And if she did, she’d probably lose that battle. And I’d have to get the CMO involved to go fight for a budget. Now conversation intelligence is in that situation with, there is no budget line item yet. Okay? Now here’s the thing. If we go to a CRO, which is our typical buyer who can get a budget and they hear the words conversation intelligence, what we’ve found that happens quite often is it sounds to them like a tactical tool conversation intelligence. I would something to do with our conversations, go talk to my sales enablement person or go talk to my sales ops person. And many times that is where deals go to die because when we talk to that sales enablement or sales person, they’re like, well this is pretty interesting, but I have no power to get budget for this. So we’re stuck in that loop where the CRO thinks that this is something too tactical for her to talk about.

Udi Ledergor:
But when we get to the tactical person like sales enablement, they don’t have any budgeting power to get that done. And so to break out of that vicious cycle, we had the thought that is showing initial promise in the last like six weeks since we roll this out. But ask me again in three or six months or in 12 months, I’ll tell you how we’re doing. We have the thought that if we renamed it to a category that the CRO would care about and would not as easily bump us down to sales enablement, we could stay at power talking to that CRO who would both get the need for our product and also have the power to fight for budget. That was one of the sort of defining moments when we’re like, okay, what, what would the CRO care about? Right? Like if CRO wants us to bring in strategic training for sales people like Sandler that happens at the CRO level, that’s a, that’s a high ticket item and it has a sort of strategic importance.

Udi Ledergor:
He wouldn’t bump that down to sales enablement to decide do we need to bring in Sandler for half a million dollars this year? That’s a CRO decision. So we’re like, what could we do to make purchasing product like on a CRO decision and after quite a lengthy process that I won’t bore you with all this details. We came to the conclusion that by renaming it as revenue intelligence, and this is way more than a naming exercise, we redefine the entire pitch around what is revenue intelligence, what our product vision is and how it helps C R O’s and senior sales leaders. We completely redefined message to cater to the interest of senior sales leaders in enterprise. And I’ve got to say that since we’ve rolled this out, obviously we had a short beta period before we did the official rollout about six weeks ago. It’s been really resonating with senior sales leaders like you know, when, when marketing teams and management teams sit around a board room making up these names, you always got to wonder like, won’t this sound weird?

Udi Ledergor:
Does it even sound like a thing? Does it sound entirely made up? Will it stick? And you know, all of these category names initially sound lead up cause they didn’t exist five minutes ago. But it’s actually working. It’s actually working so far. Again, this is very early stages, so kinds of disclaimers and asterisks on that. But it is sticking. Like w no one’s rated, raised a brow asking revenue wide or what does that even mean? As soon as we get through the 32nd explanation like really makes sense to people. And we’re seeing that CRS are having these conversations with us, VPs of sales are having these conversations with us and they get, so that that is sort of the background why we made the change.

John Rougeux:
All right, so let me play that back to you to make sure I got it correctly. So with conversation intelligence there, there was some demand, it was, it’s an existing category and you found that when you’re selling to mid market, and especially enterprise accounts, you really trying to sell to the, to the CRO, the term conversation intelligence, it would get pushed down to a sales ops or sales enablement person. But then even though this is an existing category, it’s not at the budget and line item stage yet. And so to make a, to make a sale that had to be the kind of to come out of new budget. So it would go back to the CRO. But like you said, it would kind of bump back down to the sales enablement person because conversation intelligence implied something more tactical, less strategic. Exactly. And the CRO would really pay attention for.

Udi Ledergor:
Exactly. And so we, again, I’m oversimplifying to fit the scope of our discussion today, but, but it’s, it’s way beyond the category name. Sure. We thought about the strategic story, why would the CRO care and why don’t they care enough about conversation intelligence? And we found that conversation intelligence really has a pretty narrow scope of improving people skills at the sort of sales call level. So this is something that a frontline sales manager who has six people six account executives reporting to her, she would care about because this helps her coach her people. It’s still super important product, but our offering is so much broader than that. And our vision and future product roadmap is way more than that pillar of, of value that we call today people success because it’s about improving people’s skills. We’d added to equally important pillars.

Udi Ledergor:
One of them is deal success where we help entire sales teams win more deals by showing them unprecedented visibility to their deals timeline and helping their manager really understand what should be in the pipeline, what’s real and what’s not. And we added a third pillar called strategy success that helps the very senior sales leaders like the VP of sales or the CRO roll out strategic sales motions. Like let’s say you’ve invested $1 million in Sandler, how do you know that it’s working well? Now you can use gong to sort of measure your organization before and after and show ROI and set it up continuous plan with with those trainers you can see which of your reps are using the new product messaging you’re rolling out or who is offering those three year deals in Q four like you asked for. So all of these things are a much broader vision than simply sales coaching, which is what all of the other sort of legacy conversation intelligence vendors are working on. If you go to their websites, all they’re talking about is sales coaching. That’s all they’re doing. And our vision has already become so much broader. And a lot of that is already embedded in the product that we said, okay, we have a story that we think is much broader, but if we keep calling it conversation intelligence, people won’t get it because it sounds to them like this little niche thing that just helps sales reps with their, with their call coaching. Sure. We change the main to go with that much broader story.

John Rougeux:
Sure. So there’s two things there that I think are really interesting. One is that you started with understanding your audience first. That was the impetus for this change. It wasn’t because somebody got tired of conversation intelligence or because someone new came in and they wanted to kind of shake things up. You really started with a need that was based on looking at the people you’re trying to work with. And then secondly, you you talked about how revenue intelligence isn’t just a clever way of talking about the same thing or, or better way of talking about the same thing. It really reflects a product strategy as well. And we talked about those three pillars. You’ve added that kind of extend beyond conversation intelligence. And that’s really what category design is all about. It’s not just a marketing piece, although that’s a, an important part of it, but it has to reflect the product roadmap and division of the company.

Udi Ledergor:
Absolutely. And it goes as far as our internal organizational structure has changed as a result of this repositioning. I can explain. So when we decided that this new story consists of three pillars of people’s success, deal, success and strategy success, we’ve mirrored that structure in our product management and in our product marketing team. So we have a product marketer whose responsibility is deal success. We have a product manager whose responsibility is people’s success. We’ve taken that to the deepest level that we can. So our entire organization is building and selling and supporting a product to go and align with that strategic messaging and story that we’re telling. So you said earlier that it’s not just a marketing exercise and that’s entirely true. This has to start from the highest form of leadership, the CEO, the entire C-suite. Okay. If you go ask our people officer or our finance officer, they will tell the same story that I’m telling because it’s so deeply embedded in the company and how we’ve structured the company and how we’re building the product and how we’re selling it and how we’re supporting it.

Udi Ledergor:
Sure. So, so where did that light bulb go off then? That conversation intelligence wasn’t the thing, was it, was it you, was it someone outside of marketing? Do you recall? I think it initially came up in discussions where when we, you know, our sales and marketing teams are deeply aligned. It’s a, it’s a topic I get asked about a lot and, and that allows us to move quickly because I see marketing as part of the greater revenue organization and its purpose is to supply sales with the top line pipeline that they need to hit the company targets. And you can’t do that unless you’re very, very deeply aligned. And every week you’re understanding what they’re struggling with, what’s working, what’s not working, and then we iterate it and we change things. So when we started hearing that as we’re going up market to enterprise our SDRs and our AEs were being bumped down to sales enablement and sales ops, we learned this from the revenue organization.

Udi Ledergor:
I think then the light bar, the light bulb started going out on and saying, okay, maybe it’s something to do with our messaging because we really believe that our product brings value to the senior leadership. We really believe that if they only fought that fight to get the budget, they would see so much value. And we have customers who are saying that as well. It’s not just our own thinking. So it must be something to do with our messaging. And then we started playing around with messaging and then we took a few, a a few folks and we gave them the, the sort of beta version of our messaging. And we of course use gone through record all these calls and analyze it and see what’s working, what’s not working. And after we did like 20 of those with a new narrative where like we think we’re onto something and then we made it official and then we rolled it out to the entire team.

Udi Ledergor:
And so we, we iterate and test our messaging just like marketers do this, you know, on websites and emails, we use gong to do this for our sales team as well. Sure. Do you have any like what, what kind of people or books or resources have kind of influenced how you approach messaging? Yeah. Good question. So for messaging, I would, I would mentioned too, no three, three books that I’ve, I’ve read or re-read recently that have really influenced how we’re doing things. So the, the, the two very fundamental ones that are classics. One of them is Geoffrey Moore’s crossing the chasm, which is, you know, the, the, the Bible of, of I think category creation and just breaking into a market. We were fortunate to have Jeffrey come to our conference last month, celebrate here in San Francisco and, and be one of our speakers.

Udi Ledergor:
And he was a great success as we expected. So I’ve recently reread his book just to sort of update myself on some of the strategies that, that we want to make sure that we’re implementing as his theory suggests. So anyone starting to think about just even entering a new market or creating your own category you want to read that book. So that’s Geoffrey crossing the chasm. Once you get into the marketing tactics of how to actually do that. I always go back to Robert Cialdini’s influence influence, talks about the six pillars of human persuasion. And those are just the Bible. If any marketer, if you ask me like, I won’t talk or hire marketing or hasn’t written that book. Yeah, you have to. It’s everything we do. I mean, it was written in the 80s and it didn’t take off initially and a few years later, a lot of these ideas caught on and then it caught on like wildfire and he’s been reprinted and God knows how many times.

Udi Ledergor:
And you know what sheldini wrote in the 80s, way before the internet and social media. We use those exact same principles today to make a post go viral on LinkedIn or to make a video, become a huge success on YouTube. And he wrote these global principles of human persuasion years before we even have this new media at our fingertips. And it’s, it’s immensely useful. And finally, the third book I would recommend is a book called new power. I think that is the name of it. New power power. It’s about creating movements and I think it’s called the new power new power. Let me double check that for you and I can put a link to it in the episode notes as well. Yeah. So, so yes. So new power is, is a book that talks about movements in the last few years not necessarily you having to do with product at all.

Udi Ledergor:
So they talk about movements like the hashtag me too movement, and they talk about the rise of ISIS in Syria and how they’re recruiting college students from Scotland and how they’re messaging the recruitment messaging. Heather pushing people to action. And by, by reading about these different movements from different walks of life they started making generalizations about what creates a message that would trigger people to take action. And that is so useful when you’re taking that and thinking, how can I apply that to a movement in, in my business or in my category? How can I get people talking about revenue intelligence? And, and I’m not ashamed to say that, that we’re picking up tips from the Mitsu movement and from the ISIS movement only and not in an evil way, of course about what triggers people to action, what makes a message that people will want to act on and repeat.

Udi Ledergor:
And so I think sometimes looking outside of your immediate neighborhood and other companies, it gives you the best ideas because sometimes your, your competitors are just not that inspiring or you’re the biggest and the leader that everyone’s looking at. So you don’t really have who to learn from in your immediate space. So just looking at other spaces, it could be other product spaces, but they could be entirely other spaces like social movements. Looking at that and see a M what’s, what’s appealing there and why, why are people following? Yeah. It’s interesting how much inspiration can come out of resources that are outside

John Rougeux:
Of marketing or outside of business. And like you said, if you can easily get caught up in an echo chamber and just doing variations on what other people have done but not really doing something original. Exactly. Yeah. Well, you know what fascinates me, EOD, as I hear you talk, you use the word we over and over again we do this, we do that, which is, I’m not, I don’t think I even heard you say like, I did this you know, even once. And, and the reason I bring that up is because this, this change that you, you went through from shifting from conversation intelligence to revenue intelligence. Based on what you’ve told me so far, this is affected multiple areas of your, of your company. And I’m, I’m really fascinated to hear from you what, what process and what advice you have for going through this cultural change because this is a big deal, right? It’s not like a change of the headline on your website. It’s a mental change. So how do you go about effecting such a large change like that and get, getting everyone so excited about it?

Udi Ledergor:
It’s a great question and I really think you nailed it as far as that being a key to succeeding in a movement like this. And I’m not even talking about external success, but the internal messaging, communications and success. You cannot move a mountain like this without the entire force of a company being behind it and pushing you. You can be a brilliant CMO or VP marketing. You cannot push this mountain yourself. And the way to do that is to get very early buy-in from the entire executive team. In my case, I’m very fortunate to be working for a CEO who was actually a CMO for most of his career before becoming a CEO. So he’s a marketer at heart and he gets, he gets it. And you know we started this whole category creation discussion just him and me and I went and built a draft plan of, of what we want to do.

Udi Ledergor:
I got his and put on it and then I presented that to the broader C-suite and I shared with them what I heard from them, the trigger, the need for possibly creating a new category. And of course I got a lot of head nods because this feedback originally came from sales and SDR and customer success when some of their customers didn’t get what we’re doing at the strategic level. So they had to agree with that part, which I started with because it came from them. And then I moved on to what my recommended action plan is at a very high level. Well, I didn’t even have a name for the category at that point. I was just talking about the need for category creation and what successful look like. And I based that on some of the theory and examples of other categories that we looked at in other industries.

Udi Ledergor:
And, and they were very excited after that. I, I hired a person on my team, Sheena Madani. She, she’s a great addition to our team. She joined us a few months ago and her unofficial title is category creation. That’s all she’s working on. And then she, she embarked on this journey and she went through the process and she educated herself from other category, crazy creators and other industries and she walked our management team through this process of defining the category and finally naming the category. And then we built our first customer or, or industry conference around that. And we built, she built a our CEO’s keynote around that new messaging and category creation. Then we launched that and was a huge success. And we have the CEO get up in front of the entire company at our last all hands before he sort of unveiled this to the world.

Udi Ledergor:
And he explained to them the narrative that we wrote together on why we need this change, what it’s going to look like, how it’s going to work. And he rallied everyone around that. And right after that, our product marketing teams together with Sheena rolled out new sales decks, they updated that every single page of the website. So there was no more compensation intelligence. It’s all that revenue intelligence and that entire story. So this is a really wide initiative that you have to work constantly on the internal communications. This is not one of those things that marketing can spring on the company one morning, say tele because nobody will buy into it. You have to work. I think most of the work we spend, or at least half of it of all the effort we put into category creation was in the internal sinking and buy-in to make sure that everyone from the CEO to the C suite to the entire company is completely behind us.

Udi Ledergor:
And now if you go into any random gong employee’s LinkedIn page, you’ll probably find that they’ve put revenue intelligence in their title. They’ve changed their banner image on their LinkedIn profile to something around revenue intelligence. And not because we forced them to because we’ve got them excited about. Sure, sure. That’s, it’s so interesting that you hired someone with this unofficial role of, of I’m moving category creation forward. Where did you get that idea? So, so she knows interviewing for a different role on my team and we all found her extremely impressive, but she had a few white spaces in the experience that we were looking for that specific role. And this was right at the time that we were starting to discuss category creation. And when I presented my high level plan it seemed like a good idea, but also seemed like a ton of work.

Udi Ledergor:
And we were thinking, Kate, who is going to lead this if we don’t have a clear owner for this initiative for pulling us through this mud and, and getting to the other side, it’s just not gonna not get, get off the ground. Cause we were all very, very busy even before we started this initiative. And then and then as I was talking with with my CEO, and this was right at the time that we were interviewing Machina and some other candidates for the other role. Amit, my CEO said, well, why did you hire Sheena for, for this? Let’s have her lead this category building. And I’m like, wow, that could be a great idea. It took some selling on my part because I had essentially invented a role which is almost as hard as amending a category. And, and she and I had come to, to interview for another role.

Udi Ledergor:
She a VP marketing at that time and another company. And so if you wanted to make sure she’s got a senior role, and I love what she said when, when we interviewed her and and I essentially came up to her at like the third interview. I said, look, you know, we all love you. But we think we have a better role for you than the one you actually came to interview. And she said her first criteria in deciding whether to take that role or not was she said, I want to do something that I know is important to the CEO of the company. I will not work on something that is not important to the CEO. And I thought that was a great sign that she gets what it takes to succeed. And if the CEO is not completely bought into what she’s working on, then the CEO won’t care and she’ll have a hard time promoting her ideas and initiatives and succeeding in what we brought her to do.

Udi Ledergor:
So I got her to meet with the CEO again and she was ensured that he indeed is very, very caring about what she’s going to be working on. She did some further due diligence and then she very fortunately she took the role and she’s been spearheading that for the last few months. She’s now, you know, as part of that role leading all of our press relations efforts, leading all of our analysts briefings with, with industry and most like Gardner and Forrester and others. So that’s, that’s quickly become a real, very real role. So her official title is senior director of marketing cause she needs to put something on LinkedIn that people would get. But, but her really number one focus is category creation.

John Rougeux:
All right. Sounds like someone we need to have on the show soon. Oh yeah, she’s, she’s a great speaker. You’d be lucky to have her. Yeah. Great. She has her own podcast called reveal the revenue intelligence podcast. You should try that. Perfect. Three weeks ago. All right, great. So speaking of roles, do you recently were promoted from VP marketing to CMO and I’m not sure how that lined up with the shift from conversation to revenue intelligence, but I’m curious to hear your thoughts on how the VP marketing role kind of plays into category creation versus a COO.

Udi Ledergor:
Great question. So yes, as I said, I’ve already been a VP marketing at five different companies, the most recent one here gone. There isn’t always a huge difference between a VP marketing and the CMO role. I think some companies sort of overuse CMO when they’re like a two person company and they have a CMO who’s never really done that before because they think it’ll look good for investors or something. But at, at gong, especially with my com is, he’s very careful about titles. And this is the third time I’ve worked with him. The second time I’ve reported to him, and this is the first time he’s, he’s promoted me to to CMO, so he doesn’t take that lightly. I think there were a few things that triggered that promotion specifically at gong, which could also make sense for other companies.

Udi Ledergor:
One of them is that, that the role had indeed broadened and grown. So in the first couple of years I was mainly focused on demand generation, which is what the company needed. We need more leads, we need qualified opportunities. So we have customers to sell to. Once a, my team had created that machine it was time to focus on, on many other things. So the big one that we’re focusing on now is category creation. My team also handles employer branding and product marketing and our brand building and so many other things, which are a lot more strategic and not just focus on the day to day demand gen, but what are we doing to build our company’s brand for the next two and three years, not just for this quarter. And so I think that that’s one moment where you sort of can sit back and say, okay, marketing is now, and the leader of the marketing team is now something much more strategic and broad than just creating leads for meeting this quarter’s pipeline.

Udi Ledergor:
And I think that that’s a good time to start thinking of, okay, do we need a CMO in that position? Is it the current person leading marketing or do we need to bring someone from the outside who’s done this before? So that, that is sort of one consideration. I think the other consideration is looking at the marketing teams, hiring plans. I’m very fortunate to have several ex VPs on my team and many senior directors. And we need that because we’re a very small team. We’re only 10 people in the marketing team of gong. And we were half of that just three months ago. So we’re growing quickly. But the team is still small and I need very experienced people who usually already have these senior titles and other places. And getting these people to join my team is much easier when they see a promotion path for them.

Udi Ledergor:
And there was some space or gap between their title in mind. And I hired all these people when I was a VP. So you can imagine if you’re already a VP and I’m trying to convince you to come work for me, but I’m a VP, I’m going to have to take a step down to director. You’re wondering when will you ever get that chance to be promoted to VP again. Now that we’ve opened that gap and I’m a COO, you see that white space and you know that there is room for additional VPs in the company in the years to come. So that was another pretty big consideration for, for my promotion. Just I asked my boss, I said, look, at some point I’ll, I’ll need this promotion to make it easier for me to hire VPs from other companies because they won’t join me as a VP.

Udi Ledergor:
Well, readily, a lot of them did, but it won’t, I won’t be able to drag this on forever. They want to see a promotion path and there’s only one VP of marketing, they know I need to get run over by a bus for them to get that position. That’s not a great starting point for them. So they, they, they want that gap to, to see that. And then, and finally the, the maybe third consideration was we, we waited with the announcement on my promotion until we had hired a chief people officer and the chief financial officer and we announced all three additions to the C suite on the same day, sort of to get the maximum bang for our bucks and that sort of appointment round in the suite signals to the market that this company is really gearing up for, for the next stage of growth. Our, our chief financial officer, Tim Ritter’s, just stepped down from a very large public company to join gone. Our chief people, officer Sandy CoachArt, left us from a very successful company to come join us. And we timed that together with my promotion to signal to the market that we mean business and this company is going to the next stage of growth.

John Rougeux:
Yeah. Yeah. So, speaking of bang for your buck, I noticed recently you’ve, you’ve done a lot of advertising around revenue intelligence and especially in some, you know, more traditional ways like billboards and, and things like that. I’m curious how, how do you think through allocation of like high level kind of brand awareness campaigns in your budget when you’re going through category creation? Do you like what’s the calculus for that look like?

Udi Ledergor:
Great question. So here’s, here’s my high level view and then we can get as detailed as you want. The boring are listed. At least 80% of my budget should be attributed to results, measurable results. So a big part of the budget goes to demand generation. And, and within that I include our content creation, which is very tightly tied to demand generation. We don’t just create content for the sake of creating it and hope for the best. We tie it together very deeply with our dimension campaigns that leaves me with 15 or 20% of the budget that we get to do some fun stuff that I think is important, that we know in advance will not be completely measurable. And that includes stuff like billboards, which no matter what people say is never going to be measurable, at least with today’s technology.

Udi Ledergor:
And we’re okay with that. And as I already mentioned, I, I’m fortunate to work for a CEO who was a CMO and he gets that and he, he wants our candidates and employees and business partners and investors to look at gong billboards as they’re making their daily commute to work. And we know that that has value. Even if we can’t measure the hard ROI on it when, when we do these billboard campaigns, like right now we’ve taken over the Montgomery station here in San Francisco for the month of Dreamforce. And, and I’ve done some other billboards and I’ve got 20 cars wrapped around with revenue intelligence branding by the way. All around town, every, every meeting I’ve had in the last few weeks and every candidate I’ve interviewed have mentioned either bumping into one of our cars or, or seeing one of our billboards.

Udi Ledergor:
I know that even at a subconscious level that is affecting their decision of whether they will accept our offer, whether they will want to do business with us because they see this as the leading brand. And I’ve read some great research from LinkedIn. They published it recently that they’ve, they’ve researched these brand building campaigns for B2B. And even though the, the, the exact effect is hard to measure, they’ve concluded and the got some numbers to show for it as well, that this actually affects even your churn rates because existing customers who are, I’m exposed to more and more of these brand building campaigns that re assures their decision that they made the right decision to go with the leading player in your field. And they’ve shown a strong correlation between the biggest spender on these brand building campaigns and who the category leader is.

Udi Ledergor:
So it’s, it’s correlation. It’s not causation. You could say that because of the, they’re the brand leader, they have more budget than anyone else so they can afford to do this, which, which is probably true, but I completely see the other side of that correlation suggesting causation would says if you spend more than your share in the market on building more brand, you get more mind share. You eventually get more customers and that is a virtuous cycle that you continue building. And the opposite of course is the vicious cycle. If you are cheap on, on these brand building campaigns and you’re, you’re thinking that, yeah, my demand gen activities are enough and your smaller competitor now is spending a lot more than you, they’re going to get the mind share and they’re going to get the market eventually. I’m a big believer in that. Even if, if some of that belief is intuitive and a leap of faith, we’re seeing it in our everyday operations and the little data that is out there supports what we’re saying.

John Rougeux:
Sure, yeah. And certainly no one, especially if they’re making an investment in a new product category, they don’t want to invest in a company that, you know, they’re not sure of the future of the company or if they’ll have resources to invest in the product or support or what have you. And, and in a way, showing that you have the resources to invest in these brand campaigns, shows that you’re well-resourced, shows that you’re trying to grow the company and that’s

Udi Ledergor:
That can, it’s a lot of confidence, like you said. Exactly. And it works across all levels. It works for attracting investors because they’re seeing you all over the place. It works for attracting candidates because they want to work for an employer that’s stable and, and they’re looking for a little bit of job security and joining a market leader. And it works for getting partners and customers because they want to go with a popular choice with the leading company. Yeah. Yeah.

John Rougeux:
So we’re, we’re running close to at a time, but before we, we go, I know you wanted to show your thoughts on what you consider the greatest category creation example of all time. And I’ve I don’t know what it is. I’ve, you just told me that it wasn’t gone.

Udi Ledergor:
I hope one day that will be the case study on that. But yeah, I, I just thought of this yesterday when I was asked about some great examples. So you know, within the software industry there are few examples people talk about, I want to look outside of the software industry to what I really consider as the best category creation example. And that is in the 1950s there was a diamond cartel called the beers and they had an 80% hold on the rough diamond market and they had warehouses full of diamonds that they couldn’t get rid of, cause people weren’t buying enough diamonds. So they went to their ad agency, which was JWT in New York and they said, help us get rid of these diamonds. And JWT came with what is one of the most brilliant category building campaigns in history.

Udi Ledergor:
And the slogan was a diamond is forever. And they launched that campaign. And over the years it has become synonymous with diamonds. And when I look at how confident the beers were at that time, because they have such a monopoly over the diamond market, the first years the ads ran without the company name, it said a diamond is forever and didn’t even say the beers on them. Really that confident that if you just go and buy a diamond, there’s an 80% chance that’s going to be de beers anyway. So why push the brand name? Let’s just push the category. And now that is a huge inspiration to me. And over the years de beers through their ad campaigns managed to convince brides and grooms throughout the Western world that you have to spend two months worth of salary on an engagement rate and then you have to buy a diamond ring for Valentine’s.

Udi Ledergor:
And for Christmas and for any other sort of life event. Sure. That is entirely made up in the last 70 years. That is not some age old medieval tradition or religious tradition. And everyone looks at it as just a fact of life today. And, and I think that’s what makes that move such a brilliant move for category building. And years later when the beers market share came down from 80 to 60%, they started highlighting their own brand name a little bit more. They opened retail locations that you could actually choose to buy. It appears diamond because most diamond stores, if you go into Harry Winston, you don’t know where that diamond was sourced from. If you go to a Tiffany’s, you don’t know where that diamond was sourced from, but if you go into the beer store you know that they sourced that diamond. So I’m, I’m hoping one day that, that our categories success looks like that and that we become synonymous with the category and that we’ve created this sort of daily or, or, or life habit with people that they know that for winning sales teams, they need revenue intelligence and then revenue intelligence means gone.

Udi Ledergor:
Yeah. That is sort of my, my inspiration and I hope we get anything close to that. So, well, earlier we were talking about getting inspiration outside of marketing or B2B and yeah, that, that example of de beers certainly fits fits that example. Let’s see. Oh, any, any advice you want to share for someone who’s considering category design or already started to go down that path and looking to be successful? Well, my, my, my arguably annoying advice would be avoided at all costs if you can. Don’t, don’t create a category unless you absolutely have to. It’s so much easier riding a wave and joining a category and being able to differentiate why you are better than other players. I mean, they’re the two ways. They’re the two arguments you can make. It’s always one of them. Either you articulate how you are different and better or you come in cheaper, you can say I have 80% the features of the leading player, but I’m half the price.

Udi Ledergor:
This is why you should buy from me. So you always pick one of them. Either their product is much better, but you need to be able to clearly show how, especially in today’s market with sometimes hundreds of players in each category or you just say that you’re the cheapest and that that is your market value proposition. It’s so much easier going into an existing category, especially if that category is already at that budget line item stage. Why would you want to, you know, go bang your head against a brick wall and have to create that from scratch when so few companies have ever succeeded doing that. So, so I would start by looking what’s the best category I can actually fit in. And only, only if you have gone through the long exercise of understanding that really the benefits of creating a new category are much bigger than the costs of doing so.

Udi Ledergor:
Or remaining in an existing category, then go ahead and do that. And, and really, you know, it has to, it has to be something that the entire company and product and market agree on, that there’s a real problem that you have a real solution for and that it is so far away from anything else out there that it demands a new category name. And then you need to go through the entire internal communications process and buying buy in to make sure you roll that out in a very, very convincing way. And that that’s just a start. It doesn’t guarantee anything. But without all of that, you, you don’t stand a chance. All right, so that’s Judy’s advice. Don’t do it. Yes. Unless you have to. And then be really thoughtful and intentional about bringing the whole company on board and you have the patients to see it through.

Udi Ledergor:
Absolutely. Yeah. Good stuff. All right. If a one of our listeners wants to get in touch with you, what’s the best way for that? I suggest to connect on LinkedIn. It’s UDI Ledergor. There’s only one of me on LinkedIn, so it should be very, very simple to finding would be Ledergor and of course a checkout  Gong.io we have, if you’re in sales, you’re going to love our blog. There’s plenty of great stuff there, and if you’re into category building or marketing, you can learn a lot about what we’re doing around revenue intelligence. Good deal. Thanks for being with me today. Thanks for having me, John. All right, take care.

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john_rougeux_2019

John Rougeux is VP Marketing Strategy at BombBomb. Connect with him on LinkedIn.

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John Rougeux is VP Marketing Strategy at BombBomb. Connect with John on LinkedIn.

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