In the latest installment of SaaStr’s What’s New series – where we sit down with the leaders in SaaS and Cloud for the inside scoop on what’s top of mind and what’s new, SaaStr CEO and Jason Lemkin chats with the CEO of ZoomInfo, Henry Schuck.
So, what’s new at ZoomInfo? In this episode, Jason and Henry discuss:
- PLG vs. a sales-led motion, and which is more efficient
- The macro-environment and what to expect next year
- What’s new at ZoomInfo
How to Run a Product-led and Enterprise Sales Motion at the Same Time
From a GTM perspective, Henry said ZoomInfo is doubling on Product-Led Growt (PLG) and going Enterprise simultaneously. Just how are they doing that since these two motions are in complete opposition? Henry shared that at ZoomInfo, they do so by using the barbell approach.
So in Enterprise, they have around 2,000 companies spending $100k or more per year and dozens of companies spending over a million per year. The biggest opportunities are in the Enterprise segment with higher lifetime value, and lots of room for expansion. They’ve built a dedicated enterprise team and a repeatable process where they can just grow a Fortune 50 company at $100k a year to $1M – $3M annually. The key for them has been stacking the right account loads for the highest potential growth companies with the right account team.
At the same time – there are only 1,000 Fortune1k companies, right? And hundreds of thousands of downmarket businesses that could get value out of ZoomInfo. So to serve both segments at the simultaneously, ZoomInfo has been rolling out a Product-led sales motion, that gives the ability for an SMB customer to sign up directly on their website for a free trial and grow into a paid customer, without ever having to talk to an sales rep or go through a demo process.
The intersection that creates friction between these PLG and Enterprise motions is having a large sales team of AE’s who would theoretically capture the free trial signups as a lead, do a demo, and get a sale. You have to have tremendous alignment between the product lead on PLG and the new business sales head and CRO to reduce friction.
“The way you step into it,” Henry shares, “or at least the way that we’ve stepped into it, is, we take the cohort of leads we’re not talking to anyways – leads that don’t meet the score threshold because they’re either too small of a business or whatever the reasons are, and push those through the PLG motion to see how they behave. We make sure that we can continue to maintain the new business sales motion while we’re doing that to see if we can get to a place where it’s additive. At some point, you’re just going to start bumping into each other and create channel conflict.”
Sales may say: “I could’ve sold more seats to that customer if I had the chance to talk to them.” And there can be some truth to that, right? So the way ZoomInfo diffuses the tension between self-serve PLG and new business is by maintaining a clear sales journey and hand-off for a customer originating from self-serve PLG to becoming a New Business client down the road based on targeted usage.
The Takeaway —
There has to be a pathway. Growing Sales in Enterprise and PLG, in ZoomInfo’s experience, doesn’t create a lot of conflict. The real conflict is around trying to serve both sets of messaging and marketing at the same time since how you market to SMBs is very different than Enterprise customers.
So, that’s where the battle happens of going to market for Enterprise customers without neglecting SMBs. Henry’s found that with SMBs and startups, they’re typically consuming content on social media, primarily LinkedIn, while Enterprise customers aren’t consuming that messaging on social media. So what they did is shift their PR team to position articles with Forbes or Fortune where they market what they’re doing with an Enterprise customer and how they modernized their GTM with ZoomInfo.
Is it Cheaper or Better to go PLG?
Salesforce recently said they’re trying to rely more on PLG because, on paper, it seems cheaper. ZoomInfo is already crazy good at outbound with 40% margins. In that case, is PLG cheaper for expanding the base than their sales-driven process?
“I think it’s both if you look at scale,” Henry says. “PLG is cheaper, right? It’s ‘how do I get people and traffic to ZoomInfo’s website that I can then convert into a paying customer?’ If I can do that without a person. That’s definitely more efficient and cheaper than driving demand through an outbound motion where there’s an SDR, and there’s a sales ops layer that’s feeding that SDR. Then that SDR is making calls and sending emails, generating demand that way that then goes to an account executive who has to do a demo and take them through a funnel.”
“But we’re not doing it for an efficiency reason. We’re doing it for a whole group of people who should be ZoomInfo customers that we’re never going to get in front of our sales team.”
Henry sees PLG as additive since they have a high volume of inbound and self-serve customers and not enough sales reps to get in front of every single person who has a passing interest in the product. Instead, what Henry does is focuses the sales team’s time on expanding current enterprise customers. For example, Google and AWS are already ZoomInfo customers, but only certain sub-segments within those businesses – not the entire org. So he instructed the team to give free access to ZoomInfo to as many of sellers of their top clients like Google and AWS, so that by the time it’s renewal season, the CRO can say “Hey, You’ve actually got 300 sellers on the platform across your entire organization.”
It’s a better use of time and a much more efficient sales cycle to focus the team on expanding and attracting these Enterprise accounts, rather than having them follow up and call every person when they could sign up for the platform now themselves.
Have Sales and Marketing Tools Hit a Wall at a Macro Level?
From Henry’s perspective, their software vertical and tech customers have hit a wall. His take is that with nearly every VC and PE firm telling their portfolio companies to switch from “growth at all costs” to “profitability at all costs,” in an extremely compressed amount of time, is hitting a wall.
“That’s like pulling a handbrake on the freeway,” Henry says. “People end up making less than rational decisions to get to that place as quickly as possible — laying off people, cutting tool spend, and seeing what and how quickly they can cut costs.”
For companies like ZoomInfo, their tech cohort of customers went from its fastest-growing for two decades running to now reducing spend or just churning outright. This happened for two reasons:
- Companies were laying off sales reps, SDRS, and AEs and no longer needed seats
- Companies need to get to profitability and have to cut software spend outright
As we pass Q1 of 2024, most companies will be left with a customer base that has gone through this constricting period and renewal cycles since they laid off employees. So, in 2024, there should be a more normalized customer base from a retention perspective as you transition past Q1 and those customers are transitioning with you.
The Takeaway —
While 2024 should be a bit more predictable, the most important metrics ZoomInfo is focusing on now are utilization and engagement. The worst emotion for software sales is uncertainty. We’ve been in this uncertain time but should be coming out of it.
How is ZoomInfo Integrating More Advanced AI?
At ZoomInfo, they’re integrating more AI for personalization and prioritization.
Before AI, you would come into ZoomInfo and be asked a litany of setup questions like:
- What are the right accounts?
- What technologies do they use?
- What intent topics are important?
- What size company?
- Where?
- Who’s on the buying committee?
It was an administrative nightmare to get someone to sit for an hour, onboard, and get a solid result to personalize an interface for their instance of ZoomInfo. AI has allowed ZoomInfo to now instead, automate this process incredibly well so that whenever a user comes in, it’s already preconfigured and personalized exactly to which companies, intent, people, and signals are important. It also delivers contextual information for what your communications to those companies should be based on your website, case studies, and its understanding of your business.
Second, AI is changing how ZoomInfo ranks and prioritizes accounts. Today, triangulation is how people prioritize who they will reach out to — what’s happening on their list of accounts, if they’ve posted a job, if they’ve hired a new CTO, etc. That’s a painful job to find manually, and AI does a good job of gathering all that info of prioritization on accounts, people, and timing of when and how to engage — automatically.
Henry’s Favorite Upcoming Feature
ZoomInfo is rolling out a co-pilot product for SDRs, AEs, and Account Managers called Signal To Action. By examining a company, their intent data, the companies visiting their website, who’s on the pricing page, who the buyers are, etc., they then build out this decision-making engine to help you decide which companies you should engage with today, based on a predicted propensity to buy, and also how to interact with those buyers.
AI is synthesizing a whole bunch of noise to help deliver the right message to the right buyer at the optimal time, which is pretty exciting. This new feature is currently in beta and will be out in Q1.
The Takeaway —
Right now, the product is telling you who and how. Eventually, the vision is to automate the whole thing. Instead of getting a list of tasks and saying go, go, go, it’s just automating in the background.
By freeing up that space, you can start to ask your team where the innovation is. It can’t come from scaling something five years ago from 10 to 400 SDRs, but real innovation.
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