Selling AI in the HR tech market is a new frontier: Part 2

AI isn't just a buzzword. Over the last year, it's become a pivotal component in almost every HR solution, with many companies integrating AI into their technology platform to enhance their offerings. Marketers are keenly positioning AI at the forefront of their strategies, hoping to capitalize on this trend to stand out in the highly competitive HR tech arena.

However, amidst this rush, it's crucial to understand how HR tech buyers are reacting to these AI-driven narratives. Are they convinced by the promise of AI, or is there skepticism about its practical benefits? 

This episode is part 2 of a 2-part conversation where we dig in on this topic with Bennet Sung, fractional CMO at HR tech company, MeBeBot, to talk about how the market is responding to AI and what that means for the marketing approach.  

01:10 - Buyer hesitation: AI solutions have a more complex and lengthy sales cycle 02:16 - CIOs and CISOs are getting involved in the purchase decision 
06:39 - Marketers need to creating impactful marketing tools and a sales playbook to support the needs of buyers 
14:12 - Helping HR teams understand where and how AI can provide value 
17:24 -  Focusing message positioning on addressing pain points to differentiate AI solutions 

The Demand Gen Fix is hosted by Deanna Shimota, CEO of GrowthMode Marketing. Listen to our team of marketing experts and featured guests drop knowledge on how HR tech companies can maximize the success of their marketing for today’s B2B prospects. Learn more at www.growthmodemarketing.com.

Transcript

(00:00:01) - Hey, everybody, it's Jenni from GrowthMode Marketing. You're listening to Demand Gen Fix, the podcast where our team of GrowthModers and our guests discuss the ins and outs of demand generation, and why we believe it's the key to long-term sustainable growth, especially in the HR tech industry.

(00:00:20) - Welcome back to the The Demand Gen Fix podcast, Deanna here and I am continuing the conversation on selling AI in the HR tech market with my friend and fellow marketing leader Bennett Sung. Bennett is a fractional CMO at MeBeBot, an AI technology tool designed to improve employee productivity. AI isn't just a buzzword. Over the last year or so, it's become a pivotal component in many HR tech solutions, with many companies integrating AI into their technology platform to enhance their offerings. Marketers are keenly positioning AI at the forefront of their strategies, hoping to capitalize on this trend to stand out in the highly competitive HR tech arena. However, amidst the rush, it's crucial to understand how HR tech buyers are reacting to these AI driven narratives.

(00:01:10) - Are they convinced by the promise of AI? Or is there skepticism about its practical benefits? I think you highlight a lot of interesting things that really point to the fact that there's new layers of complexity that are slowing down the sales cycle, as companies are trying to figure it out as they go, right? So, let's talk about what that new sales cycle looks like because it is different. It is longer. A lot of companies are saying we want AI as part of our HR tech solution, but they're not moving as fast as all of us as vendors think they should, right? Okay, great, easy decision. Let's close this deal. And instead it's dragging on months.

(00:01:54) - Like you said, no magic wand. We haven't figured it out; how to move that needle faster. What we are finding out about is there are certain stakeholders who seem to understand AI much better in terms of then being able to wrangle the group together. So, this is why we spend a lot of our energy these days working and starting our conversations with the CIO, CISO.

(00:02:16) - They seem to be the ones controlling, at least managing the AI strategy, not necessarily defining, but managing the AI strategy. So, we start there because we know that we're going to need to become best friends with them, along our vendor journey. Then they view the vetting of the AR/AI, and then a lot of times they'll mutually introduce HR to the space; to the conversation simultaneously because a lot of these conversations in silos, it's not good for CISO to do something and then invite HR. We're trying to bundle them together because we do realize very quickly this is a co-shared responsibility. It's not one department over the other department. We don't want to create power struggles. We want to create unity. So, the more that we can get them on the same conversation layer; conversation thread, the more effective we're going to start that sales engagement. I think the other aspect is to keep moving the process along. I think what's very interesting is how confident our folks in socializing new solutions, new emerging solutions inside an organization.

(00:03:24) - It's interesting because every time I work with organizations and I start to look, scrutinize their sales velocity pipeline, it comes to a screeching halt. And the screeching halt starts right after someone has gone through a demo. I've gone through a demo, and it just then stalls. It will stall, and then we come back and then we realize, well, we didn't know. They weren't confident about it. They couldn't replicate the sales demo, so they lost some confidence. They lost some knowledge along the way. So, thinking about what kind of sales enablement tools marketing now needs to think about, that would support helping stakeholders that were just on a demo to be able to go to other folks, go to the lines of businesses, go to their legal team, etc., to show them some of these emerging tools that they're considering. So, that's a big aspect that marketing needs. New function inside the marketing content asset library that they need to think about. 

(00:04:22) - Certainly I think there are aspects. So, along with being able to socialize, a lot of times this is not a line item in procurement yet. It's not like an application system in HR; core HR system, a core payroll system where there is already a budget line item, which means you have to create. There's two ways to look at it. You can create a business case for a new budget, or maybe you could find some interesting angles to recoup some of the money wasted dollars, which mean; could be unused licenses that you may surface, that may end up pulling up to be able to pay for a one-year subscription, or a pilot of the solution. So, that introduces, again, the whole notion of creating a business case as an asset sales enablement asset, and then really, truly thinking about, especially for those pure play AI solutions, thinking about getting them hands-on experience. It can be a free pilot. In most cases, you will want many situations. It's a paid pilot. There's no difference. There really isn't. When you have a little bit of meat in the game and you pay for something, sometimes that's something that helps; that creates a little bit more stickiness.

(00:05:30) - But because here's the reality, if you want to want that customer success experience and really come away with really understanding how AI works, you really need a mentor and a partner to help you understand how that is going to happen. So, I think, along the way of the sale cycle, I think everybody's excited about the future and the opportunity AI brings. So, I don't even talk about top of the funnel. I'm not thinking we really need to create more top of the funnel noise, what we really want as marketers to really partner up with sales and customer success is creating many more impactful tools and a playbook of how to move yourself through purchasing an AI solution, because it is, again, a solution that you're not betting that it does the job. It's more about is it doing the job as it's intended to be designed, and that is a level of rigor that is much more deeper than just doing a basic assessment and doing a free trial and session. So, my take on what the sales process is (inaudible word), it’s going to take form and shape in. And what we're emphasizing, I'm emphasizing in terms of the asset and the marketing support that's needed throughout the process. 

(00:06:40) -And so, I think that should be the priority, major priorities of solution providers. But that's not to say, because you and I know that the whole notion of creating demand. We know those statistics, right? So, I think there's still an aspect. Obviously, in the top of the funnel of the notion of creating demand, which we all know is 95% of the marketers job these days and should be, but it doesn't feel like that is how time and money is being allocated. They're still spending way too much money on paid advertisements to capture demand, which isn't, we all know, is maybe 5% of the total addressable market at any time. So, instead of that, we should be out there doing more webinars, going out there in field events like volunteering your subject matter expertise to help folks understand the evolution of AI. Different use cases. Thinking about creating demand in the framework of use cases can really dramatically impact and help you drive your pipeline, because I think that is where the ambiguity sits.

(00:07:45) - Yet at the same time, I'm also thinking, sometimes these AI solutions can do so much. It's almost to a point where you want; it's almost you to almost you want to give them this lay of the land to say, just start brainstorming anything and we could figure out, what do you want to use this for? And you have a magic wand. What would you like to transform in your HR process? Because I'm certain that there's some components of the solutions that are being presented that will allow you to do that versus being put in a box. Oh, it only can do post surveys. Oh, it only can do this, and it can only do that. Can we open up the box to really just, to be a toolkit of AI tool solutions that allows you to really then be creative and figure out what you can get the best out of. That is I would feel an area that you certainly explore. I think sometimes people want to be intentional, and so they put it in a square box with the reality. It's like you may be missing out on opportunities because only people thought of you as this when you’re actually that.

(00:08:40) - Yeah, I think when you think about the new sales cycle and what it looks like, I think of the old saying building the plane while you're flying it, right? And that's what HR teams are doing right now, is they're evaluating AI because they're in the middle of assembling AI governance teams. They're drafting their AI policies. They're looking at how do we build out formal processes around this. And then when you think about, okay, so as marketers, how do we position AI solutions to HR tech buyers? I think there is a lot of education to do. And you said this when we talked last time. There's more of a need for technical marketing content. And it's not necessarily, at least from my perspective, here's the features and functionality. And let's still put on our marketing hats and lead with the pain and help them understand how to close the gap between I have this pain and here's the outcome I need, and here's how our solution does that.

(00:09:43) - But we need to educate them on things like how to even understand how to go about evaluating and vetting solutions and understanding things like input in equals output. So, a lack of process, a lack of information, quite frankly, garbage in is garbage out.

(00:10:04) - Oh yeah. That ring is loud and true, especially in the world of AI.

(00:10:08) - I don't know if every buyer understand to the level of those that work at companies where AI has become the core of their offering or a big part of it, and you've gone through that learning cycle to understand, here's how it works, here's how it becomes optimized, here's how it continues to learn to get better and better. Those HR leaders, they might be just looking for something that is out of the box. It's awesome and it solves all their problems, right? And that's not the way AI works.

(00:10:37) - I think we all need to be very cautious about the whole notion and that concept of AI generalists. It's just a role in our organization that can do a lot of little things, but never does anything really great.

(00:10:48) - And I think about the way I look at AI. AI is a set of skills. I do think very specific tasks for a specific role and domain really, really well. That is the best utilization of AI when it has a very clear job description. You look at the job description and you look at the responsibilities, and you look at what it's able to do and what its projected performance is going to look like. You treat it like an individual and you create an (inaudible word). I actually did that as a fun little marketing content piece, where I created a job description for a digital assistant for employee support. People can correlate and connect with a job description, good or bad, but it enables them to provide. Then it gives them some clarity about what this individual is going to look like. It's going to help them with the vetting process. I want this technology to do this, this, this and this. I've already articulated it a lot. So, it helps you frame how you look at AI in terms of its role inside whatever team it's going to become a part of.  As many folks from Oracle and many folks have called it, this is the age of the superteam.

(00:11:58) - It's a blend of AI and humans, right? It's just not pure AI. There are some elements that are coming down the road, but for a long period of time moving forward, it's going to be this blend of humans and AI. It's a super team of what you're building to really, in the image of core marketing talk, it's just going to enable you to do more strategic work. I hate saying that because it is a vanilla language that a lot of folks like to throw up on their website. But the reality is, think about AI in the context of a job; of a role that they're going to fill. What is their role? In fact, one of our clients, Cloud Street, they actually have on their org chart, MeBeBot, an individual as part of their people ops team. It has a seat at the table in HR. That's how they frame it. That's how they are able to get buy-in. They looked at it as an individual employee, and they justified the cost because it's working 24/7, no benefits, no, all this stuff, but it's going to do all the same work as somebody that we would have to hire. This notion of augmentation is important, even though it's a bit of a buzzword now.

(00:12:59) - For sure, so wrapping up the thoughts around marketing and how you position these things. I think everyone in the market right now that has some element of AI in their technology, whether it's the foundation they're built around, or it's a module they added in to ride the wave, right? Everyone's out there talking about AI right now, and it is overwhelming for the buyers because suddenly it's everywhere and they feel like they have to move forward with it, or they're going to be left behind. But I think it's really important to still focus on the pain points of the buyer and messaging positioning, and a lot of companies have missed that. They've gotten so focused on the tech and the features of the AI that they're not telling that story in a way that supports the way buyers think about it, because buyers are thinking about it as a problem.

(00:13:50) - One of the things; one of the asset pieces that I worked on with VP of Customer Strategy and Operations, who is a veteran in people operations, one of the things that she has passionate about is this notion of human-centered design.

(00:14:04) - Really, it's all about listening to your employees, and that is literally the first step. That is how you're going to get to your pain point. And in the context of when we put together this employee journey template, it was about really articulating and really itemizing all the things that day in the life of someone in people ops, for example, or someone in the day in the life of IT ops. What is that person individually do? And hear all the tasks. Then we start to fragment those tasks and bucket them into, this would be great for AI; this is still strategic. This is great for AI; this is still for strategic. So, when at the end of the day, when you actually start to put together your business case, you will be able to articulate, to say, these are the tasks that we believe automation will provide significant value around. And here's the time savings and here's the cost savings that will be involved. So, it all starts with really looking inside out in the context of understanding what are your employees doing each and every day and, where can AI, where do you feel AI can be the better answer versus still requiring human intervention, and strategy, and critical thinking and such.

(00:15:15) - So educating buyers about, hey, this is your first step. Think about auditing your employees; parts of your employee base because again, you're looking at a very domain specific approach to AI. Figure out what those folks do. Understand the time; understanding the time involvement because here's what the outcome is. If I can create the before picture, and then after we've applied and used AI for multiple months and I can create the after picture, now you have the ability to make confidently the statement back to the C-suite to say, we have increased efficiency by XYZ, or we save this much time and these many dollars. So, it really starts with the foundation of understanding what your current situation is. Not, like you said, not jumping into, hey, we need a technology tool to do this and here's all the bells and whistles that it can do. But the reality is, what people are going to realize is that when it comes up for renewal, C-suite’s going to say, so how do we benefit from this tool? You see, arm yourself with the ammunition and the data about the current state. And then when you progress through your AI buying journey, then you create the after state, and then you have the continuous business case to really validate continual renewal and utilization. Else it's going to be always up for the chopping block.

(00:16:32) - Lots of good information. I'd say the key takeaway, just summarizing everything we've talked about is, that there is no question that AI technology is reshaping the tech market, but despite its potential to enhance efficiency, AI integration poses new complexities involving multiple stakeholders and necessitating detailed governance and education strategies. And I think, to successfully sell AI in the competitive air tech landscape, companies must focus on clearly addressing their pain points, simplifying the technologies value proposition, and highlighting their unique differentiators. It's not the same old marketing approach that you need to take with it.

(00:17:16) - Exactly. And I think, again, leaning in on one of the major things that, I think, people buy from people they like. This is a very community-based type of industry that we're in, HR tech, which means they all talk to each other in their small local communities. So, the more that you, the more that you can present business cases, successful case studies, and strong data elements to it, again, that's going to help continue to multiply the ability to acquire new customers. It’s the standard customer marketing approach, right, but it's more important and essential today in the AI world because there are so many things in AI that are not standardized as much. The more that they can hear from their friends that it works, the more likely they're going to step in. That's how we immediately got our initial 10 to 15 customers, simply through referrals.

(00:18:04) - Awesome. Well great conversation today, Bennett. Thank you so much for being on the show.

(00:18:09) - I appreciate it.

(00:18:12) - Thanks for joining us on The Demand Gen Fix, a podcast for HR tech workers brought to you by GrowthMode Marketing. I sure hope you enjoyed it. Don't forget to subscribe for more perspectives on demand generation and B2B marketing strategies. Plus, give us a like, tell your friends. We'll see you next time.