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What Does ZoomInfo’s Acquisition of Datanyze Signal to the Sales Industry?
A couple weeks ago Zoominfo, a premiere B2B contact database, acquired Datanyze, a more recent pioneer that arms sales teams with technographics about their leads. The sales world is abuzz about these two joining forces! Both have ranked very highly in recent years as top tools for startup sales tech stacks, as shown by Bowery Capital’s most recent Annual Sales Stack Report here.
For many years salespeople at companies like Box, Citrix, Paypal and more have relied on Zoominfo, founded in 2000, as their foundational database of millions of business profiles and contacts when prospecting and sourcing leads. In more recent years though, innovative teams have used Datanyze, founded in 2012, as an intelligence layer on top of basic contact information.
The product can answer questions like, “What technologies does my target prospect use?” and “When did my target prospect implement our competitor’s product, so I can figure out when they may be up for renewal?”. To many who have used both products, this was a no-brainer and a welcomed acquisition.
Why pay for two very effective sales intelligence tools, when you can consolidate your already complicated tech stack into one, and spare yourself the wrath of having to ask your finance team to sign two contracts?
Beyond the obvious though, this is an important acquisition which signals and reinforces other trends for the sales industry:
1. The sales tech stack arms race continues, but in a different way.
We are seeing early signs that we may be heading into a heavy period of sales technology stack consolidation. Look at G2 Crowd’s positioning chart for “sales intelligence technology”, which includes both Zoominfo and Datanyze. We’ve literally run out of room:
This is juxtaposed against the fact that the number of sales tools companies use is not necessarily increasing. For example, the Bridge Group found in their SaaS AE 2017 report that both the average $5MM company and $500MM company use four tech tools to accelerate their sales. Companies and their spend may grow but their number of tools generally will not, according to this data.
Daniel Barber, CEO & Co-founder at DataGrail and the former SVP of Sales & Customer Success at Datanyze also notes, “we’ve observed many teams even using 10+ sales tools, but companies are also increasingly expressing concern related to how contact data is collected – particularly with regard to increased privacy regulation around the GDPR and CCPA.” These trends don’t necessarily mean that spend on the sales stack is going to go down as SaaS companies grow, but they also aren’t a boon for new point solutions for the sales tech stack that are coming to the market.
Within the trend of consolidation, we may also see that a) more mergers and acquisitions are going to happen amongst sales tools players, b) those teams building their sales stack for the first time will look for more all-in-one tools or middleware to stitch many tools together and c) some hard considerations will be made as to whether to replace certain sales functions (people) with certain sales tools (better data, AI, machine learning, and more) to shift spend from one expenditure to the other.
2. We already had sales-channel saturation. We’re getting closer to saturation around using the same sales intelligence too.
Traditional sales channels like email, phone, and LinkedIn are extremely saturated at the moment. According to SalesLoft data from 2017, 37% of teams are using at least 3 of these channels in tandem, and 24% are using 4 channels. Also according to that data, many of these teams are sending prospects 15+ touches across those channels, often times in tandem. Yikes.
To compensate for this, smart sales teams have found ways through technology to send out more targeted messages, based on better compelling signals, like those coming from tools like Datanyze. For example, perhaps I sell advertising technology that’s highly complementary to other technologies in the space. Datanyze would tell me if my target prospect, which I may have originally researched through Zoominfo, is using these technologies, and when they signed up for them. This allows me to send a more thoughtful and timely message to my prospect. With the recent acquisition, what was once a thoughtful or innovative way to prospect and conduct outreach on compelling signals, will now become more commonplace, given ZoomInfo’s breadth of customers. When every buyer can track the same compelling signals, we reach saturation around those once-thoughtful reasons to reach out, first mover advantages evaporate, and we’re stuck in the noise again.
3. The line between sales and marketing blurs further. Sales therefore cedes some of its selling territory to marketing.
Due to enhanced technology, salespeople are becoming more like their marketing counterparts who have always looked for deterministic data to target and market to buyers at the top of the funnel. This is both good and bad. It’s good in that we are, as a whole, smarter in reaching out to the right prospects for the right reasons at the right time. It’s bad in that really good salespeople, especially those at the top of the funnel, lose their edge to both marketing and sales automation systems that are able to reach out to prospects faster off of easier-to-get data. This is only going to continue. We suppose the ultimate benefit of this though is that the best salespeople will evolve and try out the newest technologies and strategies to get ahead.
So with this recent powerhouse acquisition of one sales intelligence tool by another in mind, how do salespeople evolve together in a world where their information advantage is eroding to technology, and the same channels and compelling reasons to reach out are overused? Our tips below:
1. If your team is operating on an OKR-based system, great! If not consider implementing this as a goal-setting framework on top of simply having quota-based goals. Within this, you can have a goal for each of your team members to experiment with one new sales tool per quarter, and have a team meeting where each person reports back on how they used this product.
I personally was a user of Datanyze four years ago when it was still a young company, and none of our competitors used it. I got pretty lucky though as someone else at our org found it, and threw it into my workflow. In more recent years, I’ve found products that are highly effective, that are just getting started. I’ve been able to do this because I’ve set a personal OKR-based goal of meeting 2-3 vendors per quarter (even if I don’t have a need for their tools yet) to stay ahead, as part of my day-to-day working with startups on Bowery Capital’s Acceleration Team. You can standardize this goal too to stay ahead of your competition.
2. Gamify your team’s research of new outreach methods to grow together. Salespeople are competitive, so creating a competition with a prize around this is both fun and also helps everyone learn faster. For example, the rules could be that each team member; a) needs to think of a non-traditional sales channel (no phone, email, or LinkedIn); b) needs to come up with a sequence of touches and compelling messaging for that channel; c) needs to test the sequence throughout the quarter and measure it. At the end of the quarter, again, all team members present and vote, and the winner gets a prize (my suggestion: don’t make it money, keep it light and fun!). At worst, this will be a refreshing break from the monotony of doing the same thing in sales each day and burning out. At best, your newfound strategies work beautifully, you create a sale culture of helping each other out, and you edge out your competitors who are doing the same old thing with the same technologies and channels in hand.
3. Consultative selling is king. Let this be a reminder that prospect intelligence is one thing, but hopping on the phone and being intelligent and thoughtful in realtime to your customers about their problem, and your potential solutions to it, is another. One good way to demonstrate this ahead of time (and boost your chances of prospects responding to your outreach) is to study your industry and your customer’s problem and blog or post about it. Again, create a quarterly blogging goal, or perhaps a goal for posting on LinkedIn X times a quarter with thoughtful advice on how to solve the problem your company is tackling. If you execute on this type of personal brand-building correctly and get your name out there, then the tools you use to boost your response rates start to matter slightly less.
We hope these tips and ideas help as you learn to embrace, and not fear, new sales technologies and their mergers and acquisitions!
Also published on Medium.