Rob Levey on this episode
Rob Levey, VP Revenue Operations at Monotype, brings deep expertise in scaling revenue forecasting across both early-stage and mature SaaS companies. With experience building forecasting methodologies at multiple organizations, Levey has developed a practical framework that combines data rigor with operational realism, earning him credibility as someone who has stress-tested these approaches in the field.
The core claim of this episode is that accurate sales forecasting is less about complex mathematical models and more about ensuring data hygiene, clear stage definitions, and focusing on three critical fields: deal stage, close date, and deal value. Levey argues that many teams over-engineer their forecasting processes when the real leverage comes from getting sales reps to input accurate, current data into these three fields consistently.
The reframe is significant: rather than asking sales reps to submit a forecast number that rolls up through managers and VPs (each applying their own adjustments), Levey flipped the model at Monotype. He owns the forecast calculation himself, while sales managers focus on deal quality and pipeline integrity in one-on-ones with reps. This separation of concerns reduced noise, improved accuracy, and made the forecast a tool for coaching rather than an adversarial exercise. The episode also explores why forecast accuracy matters beyond hitting a number—it directly impacts operating expenses, cash flow, commission accruals, and the company's ability to invest strategically in marketing or headcount.
The conversation covers the art-and-science balance: how to apply conversion-rate math at scale while maintaining gut-check judgment when pipelines are small; why CFOs should hear the forecast but not interrogate it against budget targets; and how stage discipline becomes the foundation for both forecasting accuracy and sales process maturity.
What we cover in this episode
-
2:30
Data hygiene and pipeline process The foundational issue: most early-stage companies lack CRM discipline, forcing sales meetings to focus on gathering information rather than coaching.
-
5:15
The why behind data accuracy Reps must understand forecasting serves them—identifying pipeline gaps early and triggering marketing support or territory strategy adjustments.
-
10:45
Forecast impact on operating expenses Accurate forecasts directly affect commission accruals, EBITDA, cash flow, and investment decisions in marketing and R&D, not just revenue recognition.
-
16:20
Three critical fields for forecasting Stage, close date, and deal value are the only three inputs needed for an effective weighted forecast; everything else is bonus intelligence.
-
24:00
Commit versus weighted pipeline Commit deals are reps' 100% confidence; weighted deals apply probability multipliers. Both roll into a single forecast number submitted weekly.
-
32:15
Week three versus week ten snapshots Freezing the pipeline at day ten eliminates artificial tightening at quarter-end, allowing true forecast accuracy to be measured when deals are still unsettled.
-
48:30
Upside as a forecast driver Tracking the percentage of baseline deals that expand into upsells or multi-year terms provides a repeatable lever to adjust forecast ranges quarter over quarter.
-
62:00
Decoupling forecast from budget targets CFO involvement can corrupt forecasting if it becomes about hitting budget rather than reflecting pipeline truth; clear rules of engagement protect forecast integrity.
The lines worth sharing
Data hygiene is where it all starts and ends. If you've got bad data, you're going to have a bad forecast.
Rob Levey · 5:00
The forecast, although it's a revenue number, was actually impacting operating expense on your P&L more than revenue itself.
Rob Levey · 12:30
Get the stage right, get the close date as close as you can, and get the value. Those three things really drive the forecast.
Rob Levey · 18:00
The forecast is less important than the process. You've got to learn from why deals slip and what gates you're missing in your sales cycle.
Rob Levey · 55:00
Common questions from this episode
What are the three most important fields for sales forecasting?
Deal stage, close date, and deal value. These three fields drive 95% of forecast accuracy when kept current. Everything else—notes, engagement history, decision maker status—is supporting intelligence that helps contextualize but not calculate the forecast.
How should I structure my forecast cadence: weekly, monthly, or quarterly?
Weekly cadence works best, but the key is stability. Levey uses week-three and week-ten snapshots: freeze the pipeline on day ten, set a commit and upside range, then only update in week ten if conditions have materially changed. This prevents artificial confidence at quarter-end.
Should sales reps or RevOps own the forecast number?
RevOps should own forecast calculation and accuracy, while sales managers own pipeline quality and deal progression. This separates coaching conversations from forecast accountability and removes incentive for reps to inflate numbers.
How do I forecast accurately with only 10 big deals in the pipeline?
Apply art alongside science: use historical conversion rates as a baseline, then manually adjust for deal-specific risk factors (competitive pressure, champion strength, approval delays). The goal is process discipline, not 95% accuracy. Cover deals in early stages can offset slippage risk.
Why does my CFO keep asking me to forecast to budget instead of to pipeline?
Because there are no rules of engagement. Set clear boundaries: the forecast reflects pipeline truth, not financial targets. CFO hears the range and the reasoning, but should not interrogate why forecast is below budget. Bad relationship with finance corrodes forecast integrity quickly.
How do I make sure my sales reps actually update deal stages and close dates?
Show them the why: pipeline hygiene helps them identify gaps early, trigger marketing support, and avoid quarter-end surprises. Pair weekly CRO deal reviews (where execs interrogate sloppy stage definitions) with positive coaching. Some teams also tie a small MBO percentage to Salesforce hygiene.
SEO meta description
Rob Levey (Monotype VP RevOps) on sales forecasting: accurate data beats complex models. Focus on stage, close date, value, then apply weighted conversion rates.
Target keywords
Rob Levey
Monotype
sales forecasting
revenue operations
sales pipeline management
forecast accuracy
weighted pipeline
data hygiene
sales process
CRM discipline
commit versus upside
RevOps
Read the complete conversation
Auto-generated from the episode audio and lightly cleaned. Expand to read or search inside.
Read the full transcript · 65 KB · Rob Levey
SPEAKER_00Welcome to RevOps Corner, where we talk about how B2B SaaS companies scale through revenue operations by interviewing amazing guests and sharing what we see in the trenches every day here at Union Square Consulting. Welcome, everybody. Today, we have RevOps Live episode
EDDIE REYNOLDSnumber five, the art and science of sales forecasting. We have our special guest today, Rob Levy, VP of Revenue Operations at Monotype. Rob, thank you so much for joining us today. Yes, sure. Great to be in. Thank you. I'm super excited to get into this. We've got Jerry Marletta, our Director of Delivery, who's helping a lot of our clients with these same issues. Jerry, thanks for helping us today and joining, as always. No problem. And thanks, everyone else, for joining as well. We'll have
ROB LEVEYyou on mute at the beginning. If you've got any questions, feel free to just drop them in the Zoom chat. We'll make sure to make note of it. And when it's time, we'll give you a chance to come on camera, come on mic and ask a question. Awesome. So for the purpose of the podcast,
EDDIE REYNOLDSwe're just going to dive right in. But if you've got questions, just throw them into the chat and we can get to them at the end of the podcast. Rob, I'm excited to dive into this with you. I'm going to start off by sharing my views, some of the things that I'm seeing with sales forecasting for my career being a sales rep. And then for the last six and a half years here at Union Square Consulting, trying to help our clients with both their pipeline and forecasting. But I'm anxious to see how you respond to that and give you an opportunity to share some of your views, because I know this is a topic that is near and dear to your heart. So I'll jump in and I'll say that the first issue that we see with sales pipelines and forecasting is just data accuracy and adherence to process. I think the biggest thing that we see consistently, especially among early stage companies, is that a sales meeting is sort of a round robin explanation of granular details about each deal. And none of that data is actually in Salesforce or the CRM. And so there really is no process for managing the pipeline or forecasting. So as a result, most of the time that's spent in sales meetings gets spent just
ROB LEVEYgathering information rather than actually managers sharing recommendations and trying to coach reps on how to close deals or when to move deals out based on the information that they already have access
EDDIE REYNOLDSto prior to the meeting. This makes for a really inefficient sales meeting. And it also makes for a really inefficient pipeline management process for each sales rep, as well as the manager and a complete inability to forecast. I think the second thing that we see that's a real challenge for a lot of organizations, especially early stage, is that if they don't have a forecasting process in place, they're not building the muscle necessary to get better at it over time. So the second that you try to forecast, the first thing you run into are data issues and you uncover challenges around not defining your sales cycle, not having clear entry and exit criteria from one stage to the next, not understanding how to coach reps to really get adoption into that process and get each deal into the right stage, the right dollar amount, the right close date, so you actually can trust the pipeline and then look through that information as well as the qualitative information that can be added to the sales opportunity to then ask intelligent questions of sales reps to help them identify which deals should be closed out and which deals and how they can potentially close in period. Rob, I'm going to stop there and turn it over to you if you want to share some of your just sort of high level thoughts before we dive into the Q&A. Yeah, for sure. And I think that's spot on, Eddie. For me, data hygiene is where it all starts and ends. If you've got bad data,
ROB LEVEYyou're going to have a bad forecast. It's as simple as that. And, you know, over the years, the way I've overcome that is, you know, I've heard as sales tools have come into the process, you know, into fruition in the last couple of years and AI has come in, I've heard a lot of vendors talking about, well, you know, don't ask the sales rep to input it, just automate it. And that's honestly easier said than done. The practicality of that is your AI is only as good as the data. And it really starts and ends with the sales rep. So I don't fully adhere to that notion. So it really comes back to the rep. And the way I've handled that is have the rep understand the why. You know, we often beat the sales rep up as to you've got to have clean data. This sales data is past due. You said it would close on the 13th of August, and it's now the 15th of September. But they don't understand why. You know, what's the why behind the forecast? And the why is generally explained as well because the board needs an accurate forecast. Well, that means nothing to a rep. So for me, the why has been things like, well, we want to see the volume of pipeline that you have. We want to understand your conversion rates. And at the end of the day, see if you've got enough pipeline in any given quarter to close enough business to make or break your quota. And then I'd break it down even further and say, and guess what? This isn't an exercise to beat you up as to why haven't you got more pipeline or have you got too much. It's actually about an early indicator. And it's saying if you haven't got enough pipeline and you actually doing all the things with your manager to drive enough pipeline, but you need marketing support or you need more campaigns or events in your territory, then that's an early indicator to actually start making an impact on your specific pipeline in your territory to help you get, you know, the pipeline that you need to make your number. And that was actually explained to me many years ago by a CFO when he said to me, you know, with SaaS, our level of forecast is pretty easy because, you know, a lot of it is or is a growing annuity. And so I'm really interested in your level of accuracy, not based on the number itself, but based on the amount of spend. And if I think I'm confident I'm going to make my number, that's actually going to have an impact on my operating expenses in terms of the commissions I'm going to pay in that quarter. But it's also going to see what my cash flow is so that I can start putting more money from marketing, you know, research and development, whatever it is into the product or marketing to start, you know, to see the markets or see the areas where you haven't got enough pipeline. And it kind of dawned on me that the forecast, although it's a revenue number, was actually impacting operating expense on your P&L more than revenue itself.
EDDIE REYNOLDSI love that. That's a really interesting perspective. Could you expand a little bit more on the operating expense? Talk a little bit more in detail about that?
ROB LEVEYYeah, I mean, I just looked at it on the real basic sales and marketing impact of your expenses. Now, you know, the one is sales. Ironically, it's kind of counterintuitive. If you're having a good good forecast, forecasting quarter, and you say you're forecasting, I don't know, make up a number 25 million this quarter, and your budget happened to be 20 million, you're 5 million over budget. And depending on how your accounting or finance team pays commissions or accrues commissions over the year, a lot of companies accrue those in the quarter. So you're going to have a bigger expense. So it's actually going to knock down the EBITDA a little bit of the company, even though, you know, your revenues, depending on accelerators and all that, but it's going to impact your cost, your bottom line, even though you drive in more revenue on your top line. And on a cash flow basis, obviously, depending on the way your finance team works, depending on the quarter, on the marketing side, if you're having a good quarter, a good CFO is starting to invest money in marketing, if that's where you're going to get a return on investment, early in the quarter, it may not impact this quarter, but it's certainly going to impact next quarter. So it's very much an operating or a cash flow kind of analogy that my CFOs have used in the past to say, if you get this number right, then we can free up money on a lot of initiatives, you know, that actually drive the key workings of the company outside of sales.
EDDIE REYNOLDSYeah. I couldn't agree with that more. And that's something we even see internally at Union Square Consulting, you know, because we are so small, I operate as effectively our CFO as well as CRO and CEO. And so when I sit down with accounting and I look at the numbers, you know, it's really easy to say, okay, here's our fixed expenses. We spend this much on software. We spend this much on office space or we used to, et cetera. It's really, really easy to forecast that. Yeah. But then without the sales number, you can't predict revenue. In our case, we can't predict cost of goods sold because they're associated somewhat. And then it becomes impossible to say, can we invest this in marketing? Can we hire that next sales rep? And how much runway can we give that person? Can we hire another person in operations or some other support role to help us be more efficient? It's impossible to answer that question if you can't figure out how much revenue you're going to bring in and thus how much gross margin and therefore net margin after your fixed expenses to understand whether or not you're going to run out of cash if you make that decision. And so as a default, if you have a weak forecast, then you have to go one or two directions. You either get more conservative and you spend less cash on things, which inhibits growth and inhibits that individual sales reps' ability to actually get inbound leads and other things that helps them hit their number and succeed. Or you go more aggressive, you roll the dice, and then if it doesn't work out,
ROB LEVEYyou're experiencing massive layoffs. Yeah. And it comes down to trust. For me,
ROB LEVEYyou've sparked something that over the years I've seen is who's in your forecast and who drives it. And I've seen in bad times or in times when you maybe haven't been that accurate with your forecast from a CRO perspective, guess who appears on the next weekly forecast? The CFO and the CFO. And honestly, then it becomes a self-fulfilling budgeting process because the question becomes, why aren't you forecasting to budget? If your budget's 25 and you'll forecast 20, what's the delta? I've had that break that I said I was going to have to have. I've got someone at the door. I'm going to let them in for a second, if you don't mind. And I'll be back in literally, I'll try and be back in like 30 seconds. Yeah, no problem. I'm just going to keep going on the topic
SPEAKER_21while you grab this person and we'll make it for a good podcast. But before you get started, I want to
ROB LEVEYjust sort of chime in on something that Rob was saying around forecasting itself and the why. And
ROB LEVEYit's definitely something I feel like I've learned over time is, particularly when you're dealing with the sales team, it really is most important about how can we leverage this ask that we have for you, sales rep, to help you, whether it's right now or help you in a way that'll benefit you in a month or a quarter or even a year down the road, when we started thinking about how it affects overall finance, financials for the business. But I think making it about them, how can we better coach, how can we better assign territory? That's where you get the buy into. What do you mean I have to do all these extra things on top of working to actually try to close these deals?
EDDIE REYNOLDSYeah. And I would even take it a step further to say, if the rep can see the value in this exercise for the purpose of closing deals. So what I mean by that is, if the sales rep can understand how having a cleaner pipeline and having a better sales forecast helps them get to their own personal number, then you really start to see buy-in from that. And I'll share some specific examples. In my experience, especially working at Salesforce, the way that we got to an accurate forecast was by having a really, really tight process around the way that we manage deals on our pipeline. By having very, very clear understanding of what it required to take a deal from one stage to the next, and specifically the qualitative information around the deal itself, that we had access to decision makers, that they had confirmed that the demonstration had met all of their needs, that we're ready to enter negotiations, that if we go to the pricing team, that they're committed to signing a contract before we do that. These things are not just things that help your forecast and help you have a clean pipeline in Salesforce, but these are things that actually help you close deals. And so I saw a lot of sales reps that would join Salesforce from many other industries where this is not common. And no matter how much they get on the phone with customers and tell them that Salesforce is the best thing since sliced bread, you should use it. They still don't want to use it themselves because they're just like any other salespeople. They're like, I want to be talking to people and closing deals and making money. But when they started to see, wow, like the best reps in the organization, the ones that have been here for a while that are continuing to hit quota and not just surpassing quota once in a while, but consistently, they really have a tight process. We always use the term being the CEO of your own territory. They had a really tight process for managing everything from their prospecting to their pipeline management, but it resulted in closing more deals, having higher close rates, having shorter sales cycles, and just having more consistency in their ability to hit quota, to, you know, get promoted and to get paid. And these things are really, really important for sales reps, but it can so oftentimes come across as we're asking you to fill these fields out on the opportunity. So it solely benefits management. Yeah, I agree with that as well. And I think it's part of that one and
ROB LEVEYthat one-to-one cadence with the manager and the rep that they talking about the deal, they working through those stages. They know in the background that that impacts the forecast. And I always flip back to that with a rev ops hat on and say, look, I'll do, I'll do all the triangulation on the weighted pipeline and commits versus upsides and all that, and I'll come to a forecast. But all I want from you is accurate data in terms of, is the deal at the right stage? And I generally ask for three things. Like, if you can do three things, well, get the stage, right, get the close date as close as you can. If the close date moves, move it, um, and get the value that, you know, the value in terms of the deal size. Um, and those three things really drive the forecast. And if you've got accuracy there, look, the rest is, the rest is a bonus in terms of just intelligence on that deal. But that, those three fields get you pretty much all the way to forecasting.
EDDIE REYNOLDSJust to recap that, let me make sure I heard that right. Close date, stage amount or value you said?
ROB LEVEYYeah. So the close date, the, the stage and the value, um, you know, for me, as I expand on that, I've done this now for, I don't know, five, six, seven companies. And when I go in, I try to understand what, what is really going to drive a deal? You know, what are the things that are going to, going to change the forecast up or down? And you touched on it earlier on in terms of really measuring yourself quarter on quarter and saying, okay, where, you know, where did I do well? Where, where did I fail? Um, you know, what, what didn't I get right? And for me, you know, things over the years, but especially in this company right now at Monotype, there's a big difference between your deals that are new deals and those that are renewals. You know, the sales cycles are going to be different. The, the decision maker, the buyer's decision is going to be based, you know, if it's a renewal on, is it a forklift removal of the software or, you know, are they going to renew with you? It's a totally different decision process to a new purchase. So for me, the stages, the waiting, you know, and the way I calculate the percentage close on a weighted basis is going to differ between new and renewals business. Yeah. Yeah. I was just going to say, I couldn't agree
EDDIE REYNOLDSwith that more. I mean, in working at Salesforce, obviously, like we had a million different products, a million different segments, a million different geos, and every one of those is going to have different close rates and different sales cycles. Like, I mean, it would be ridiculous to think that SMB and enterprise are going to have the same sales cycle. And so when we go into smaller organizations, I try to keep that in mind that like, yeah, I get it. You're a small company, but if you're selling two different products, they may have completely different mechanics in the way that your deals are going to close. But, but for me, it's okay. What are the real drivers? What,
ROB LEVEYwhat makes the difference between bombing on your forecast and, and hitting it at like 95, 97% accuracy, those big impact drivers for me, because yeah, you could, you could make it super complex with 57 variables, you know, from size of company to region to type of product. And it, it, it becomes daunting. And so I, you know, I try to err on simplicity with impact. Oh, sure. Don't get me wrong. Don't get me wrong. And I knew, I knew you weren't saying that you needed to forecast everything, but, um, you know, those for me have been big in, in monotype right now, upside is a, is a big one. And that's something that, you know, I like a single value in Salesforce, your kind of baseline. What, what's this deal going to close at? Like, let's, let's call it 50K. You know, we've got a, most of our deals have an upside. And if you think about it, the base case is say 50K for, let's say the standard platform. I mean, the upside may be, uh, you know, with all the bells and whistles, that 50K deal, including support and service and the gold standard things that could become an 80K deal on a one year term. Another scenario could be, it could be a two or a three year term. So the three year term might be three years at a discounted price of 60K with all the bells and whistles. And that's now 180K deal. So that's a big driver for us in our forecast right now. And I identified it in my first 90 days of being in the company and that becomes a major, a major mover for me on the accuracy. So I measure that. I go, okay, what percentage of the baseline deals every quarter moved to an up, you know, what percentage of the upside did we get from those? And I track that every single quarter and see, you know, what, what's the variance? Because that's going to be a key determinant on whether I land at 85% or 95% accuracy.
EDDIE REYNOLDSLet's dive into that. So first I'd like to clarify some terminology. Yeah. You know, when you talk to different companies, sometimes they, there's a lot of, you know, a lot of common terminology, like your commit, but then some of the other terms seem to be interchangeable a little bit, company to company. What are the forecast categories that you've used traditionally at Monotype and other companies?
ROB LEVEYSo I work with Commit and Upside and our Commit is the same as our Likely. I've, I've gone away from a
ROB LEVEYworst case because I think there's a human tendency to, er, to a worst case. And they're like, I prefer not to think of that. It's like, what's like, what's the Likely forecast going to come in at? And that's kind of the Commit and Likely for me is often interchangeable. So I tend to have a range of, my forecast is going to be between 35 and 40 million. 35 is my Commit or Likely number, and 40 is my best case or upside. Got it. Okay. So you're submitting two specific numbers
ROB LEVEYin your forecast every period and you do it weekly, right? If I remember some of your other content. Yeah. So, so our cadence is weekly, but, and, and, you know, an anecdotal story here, when I joined
ROB LEVEYMonotype, um, the, the forecast was, was every single, that was the cadence. And our SVPs would sit with our CRO. I sat in on the meeting. We generally don't have the CFO and, and the CEO, and we're a pretty big company. So we got all the titles. Um, but it's pretty much the CRO, me and, and her direct reports. And the forecast would be every week, but the SVPs would drive that forecast. And it would be a mix of what they were committing in forecast in Salesforce. And then everything else that wasn't committed was on a weighted basis. So you commit a deal, deal a, the value of that deal is 20 K. All of that goes into the forecast, but then you don't commit deal B. If it's at negotiation stage, which is say 80% and it's a 10 K deal, then you would only take eight K of that deal. And so the combined forecast would be a, a combination of commit plus weighted.
ROB LEVEYAnd so weighted being like, so the commit number are this, the sum of the actual deal, the sum of the whole value of the deal. And the weighted is the, the multiplier by this,
ROB LEVEYthis stage that the deal's at. That's for your upside or that's the commit.
ROB LEVEYThat's the commit. And, and that was the commit that, that was the standard weekly forecast. So I think I got a little confused on that. So let's say you've got 10 deals in your pipeline
EDDIE REYNOLDSthat the sales team is all putting in a commit. You're multiplying, you're, you're adding up the
ROB LEVEYfull value of each of them. 10, 10 deals at 10 K each. That would be a 100 K forecast. Okay. So you're not waiting those deals. They're saying these are the deals we're going to close. That's our commit. Yeah. And then, and then if there were another 10 K and they wait to that,
ROB LEVEYanother 10 deals and they waited out at say seven and a half K per deal, just arguments say, I'd add another 7,500 onto that forecast. So my total forecast would be the two together.
SPEAKER_15That's your upside. And no, no, because that's the total pipeline.
ROB LEVEYGot it. Okay. So because those deals are not in commit, you're taking the other deals and you're waiting those, but the data are in commit, you're taking a hundred percent of those. A hundred percent of them. Yeah. And, and that would be my, my kind of CRO forecast.
ROB LEVEYAnd that's, that's how I joined the company that, that she would say on a weekly basis, our forecast is rolling up with our commit and our weighted, weighted deals. Our forecast is, is riding up to $10 million this quarter. Yeah. And so every, every week that would change. And so week one, it would be 8 million. And by week 13, it would be 12 million because as the deals progressed and the, her, her managers got more confident that the, the, the weekly forecast kind of went up. So two days before the end of the quarter, we were 99% confident that we were going to make our, you know, that, that our forecast was going to come in at the number we were saying. And I looked at it and said, well, that's kind of fool's goal. It's like anybody can forecast on the last day of the quarter. And as your pipeline matures and progressives and you pull stuff in and out, you're going to get closer and closer to committing all your deals. And so naturally it's going to go from, from eight to 12 or whatever the number. And so I took a stop on that and said, you know what, what's important is the week three forecast and the week 10 forecast. And so the SVPs can continue to drive how the quarter is shaping up in their forecast. But I'm going to give you two numbers. I'm going to give you a commit number and an upside number in week three. I'm going to try not to change that until week 10. And then I'm going to give you an update. And if, if things are looking much, much stronger and the pipelines progress faster than we thought, then the range may go up a little. But if it, you know, if things have gone south, then that range may come down a bit. And that just drove a lot of predictability and confidence from the board that now we were just changing the forecast every week. As we got towards the end of the quarter, we were giving them a clear number at the beginning of the quarter, um, that, and that's what I measure myself on is my week three forecast. You know, can I get the 95% accuracy in week three of the quarter when the deals are still pretty unsettled, you know, and we've still got 10 weeks to go?
SPEAKER_39Yeah. Go ahead, Jerry. How did you account for any new deals that were created though in that,
ROB LEVEYduring that, you know, sort of snapshot timeframe, would you exclude them? So you didn't mid that period of time look like you were over forecasting based on what you started at? We, we've, we've taken consistently and I've been with the company now seven quarters. We've taken a
ROB LEVEYday 10 snapshot and we look at the pipeline on day 10 and we freeze the pipeline then so that we see in quarter on quarter, are we actually growing our pipeline? Got it. Okay. Okay. Okay. Snapshot again. But when you're submitting that forecast,
ROB LEVEYdoes that not include deals that you will open and close in the last, uh, 10 weeks of the quarter?
ROB LEVEYYeah. Yeah. So I'll add, so my, my week, week three, I'll go, okay, what's closed. And then of the
ROB LEVEYpipeline that's, um, you know, expected to close in the quarter based on my historicals of, you know, what have I seen in the past? What, what do I expect to convert? And that's my total weighted pipeline approach. I'll also, you know, triangulate with the SVPs and say, you know, based on what, you know, what's, what's your best, you know, what's your likely and best case looking like. And I'll also triangulate against that weekly profile that I've seen coming in the forecast every week that I talked about historically and say, to what extent has the forecast moved week on week, you know, based on the maturity of the pipeline? So I'll, I'll try and triangulate on three vectors. I think what I'm asking or curious about though, is, as you explained that you're in week three,
EDDIE REYNOLDSlet's say, what about the deal that you open in week five and close in week 10? Are you looking at historical numbers to say, okay, this isn't even in our pipeline yet, but it will be?
SPEAKER_24Yeah. Yeah. And like in, in my cost, that was when I say, what are the things that are really going to
ROB LEVEYimpact? That was one of the, you know, what are the, the velocity deals that is kind of run rate business that I'm not accounting for in the pipeline. In, in monotype, our bid, our sales cycles tend to be longer. They tend to be in the sort of 80 to 120 day range. So that's not a big moving factor. But as I said, our upside is, so I always look at the upside and say, what percentage of the, of the baseline business, you know, can I expect to get an increment from upside? And then to the corollary of that, there's also deals that are pulled in. So we, we will go through the quarter and say, you know, these are the deals we expect. As I say, the day 10 snapshot, those are all expected close dates in quarter. But as the, as the, the quarter progresses, some deals will slip and we'll de-risk our forecast by saying those deals that are not progressing, you know, don't, don't rely on hope, hope as a strategy, push those deals out into the next quarter. And we've actually pushed deals that we still think we've got a chance of closing. Um, we push into the first 10 days of the next quarter. And so I look at the next 10 days and say, I've, I've got maybe 20, you know, $10 million worth of deals that are sitting in for us right now in Q in, in, in Q4, in the first 10 days of October, that we've got a chance of pulling. So those will be the discussion points. When we get to the forecast callers, we'll go through that list of the, you know, the top five or 10 that could swing the forecast and say, okay, of the biggest ones, which ones have got a chance of coming in and are they progressing faster than we expected say four weeks ago. So there's, there's little chunks of, of forecast that I add up that sort of make, make up my ultimate number. That's really helpful and interesting. And it leads me into my next
EDDIE REYNOLDSquestion, which is what about adjustments? So let me oversimplify this as a mathematical example. We've got 10 deals for 10 K and commit. So that's a hundred K and commit. And then we've got another 10 deals in the pipeline and they're at a stage two and that's a 50% close rate. So that's a 50 grand. So our, our commit number is 150 grand. Yeah. If I understood the way you're doing your math. Yeah. Um, when you sit down and you talk about the qualitative aspects of a deal with the sales rep. Um, and this is especially top of mind for me when you have larger deals that are going to have more influence on the final number. How do you make adjustments based on them saying, yeah, you know, like this is in a stage three, you know, we just did our presentation, but I know we're competing against these other guys and I know that they're lower priced than us. And, um, I know that price is a real sticking point for these guys and I'm not feeling confident about this deal.
SPEAKER_24Yeah. I mean, you know, that's, that's the, that's, that's one of the classics, you know,
ROB LEVEYthe, the other one is, you know, the, the silence is going really well, but we haven't heard from anyone in two weeks. We, we think it's at proposal stage, but you know, or at contract routing stage, but we haven't heard from any, you know, and I, I, I think that's, that's where getting, getting the deal in the right stage is, is absolutely, you know, fundamental. Um, and that's why I have commit and waited because the commit is, you know, the, the rep has committed that this deal is coming in, you know, come, you know, shine or, you know, rain or sunshine is going to come in, but those weightings is, is it truly at a graduation stage or is it at, is it at contract stage? Um, Because the percentages that you apply to that weighting is going to balance out your forecast,
ROB LEVEYyou know, and take out and de-risk. Well, feel free to correct me on this, but I'm going to make the argument that that works really well when you have enough numbers, when you have a large enough
EDDIE REYNOLDSvolume. But in this example, where we're talking about 10 deals in the pipeline and, you know, obviously they're not all 10K. Let's say that eight of them are 10K and two of them are 30K. Those two 30K deals can really swing your number. Um, what do you do then?
ROB LEVEYYou know, it's, it's a good question and it's a long time since I've been, you know, at that sort of small early, earlier stage company where you're talking in like single figure deals or, you know, tens or 20, 20 in your entire pipeline. So, you know, it, it is a lot tougher, but as I, as I think back to those early stages, you know, when I was at, um, you know, early stage companies at that stage, your, your forecast can be a lot more like manually less scientific and, and more, and more artsy. I think at that stage, you take, you take a gut check and you go that, that 30K deal is, is a big swinger on my overall 150. It accounts for 20% of the forecast. Um, yeah, I'm, I'm going to knock that off or, or, or, uh, yeah, I'm going to, I'm going to wait at a 10% just because I don't have a good feel about it. And I think that to a certain extent is where the art comes in is, you know, sometimes you do have a gut feel and could be right. You could be wrong, but when there's a small number of deals, you can actually be a lot more artistic in it than scientific.
SPEAKER_21Yeah. And that's what I experienced when I was at Salesforce. And when they submit their final
EDDIE REYNOLDSforecast to the CFO, they have the law of large numbers in their favor. And that's how they're able to forecast within 5% accuracy. But when I was the AE, the gun to my head, so to speak, and I was in, you know, SMB, the deals that I was closing, it was really simple math for me. If I closed one 30K deal, I'd hit my number. If I closed zero 30K deals, I'd be way below my number. And if I closed two of them, I'd be at over 125%. I'd have a bunch of other 10K filler deals. And then I'd have like, you know, those 2K and 4K deals that are just like your run rate, your cha-chings or whatever. And it really came down to like, I'm going to have a bad month, a good month or a great month based on two deals that swing in or out of the month. And so when I was looking at it and I'm looking at each individual deal, it was always so difficult for me to forecast. So I would just take the three 30K deals I'm working on and I'd say, okay, like, how do I feel about these three particular deals? And when I'd have a really good month, like in a January and I've got nine 30K deals, then I'm like, okay, well, you know, these are all on this stage and I've got nine of them. So I'm feeling really comfortable. I can close four or five of them and I feel a lot more confident about my forecast. But we still to this day see a lot of companies at early stages where their pipeline might be just 10 deals and it's really hard to forecast with those fluctuations. Yeah, I think it is. And I think even with small numbers,
ROB LEVEYthat's where I go to what I'd said about essentially your cover deals, you know, and that's another, you know, another term that lots of people use very differently. But when I was talking about pulling deals that are at risk, pulling them out of the quarter and putting them into early first 10 days of the next quarter, those are the cover deals that should cover the rep or the manager on those risky deals on what happens if this one goes south, I'm not feeling good about it. You know, if this comes out, I've got a deal or two that can cover it. Now, if you haven't got the deals, you haven't got the deals. But, you know, I've never met a salesperson that isn't working on other stuff that, you know, isn't slightly hidden from the CRM. Everybody works it to some degree. Now, your example of can you find 10 3K deals to cover a 30K deal? Probably not. But you can certainly cover for a couple of, you know, smaller deals that closes the gap a little bit. So, you know, I think there's, you know, bringing back the topic, art and science, you can't be totally scientific and just apply a CFO logic to this and say, well, you've got 10 deals, you're going to bring in 150K. You've got to apply some art to it and say, you know, and accept that there could be a deal at early stage or there could be, you know, something that you haven't felt confident to put into the pipeline yet that, you know, will help you out in those scenarios where, you know, it's like, how am I going to close the corner with that big deal slipping out? Yeah. And I think that one of the things that we coach our customers on is that
EDDIE REYNOLDSif you're at that stage and you have that small of a pipeline, you're probably not going to get the 99% forecast accuracy, but it's the exercise of doing this is going to make you so much better because you're going to start to get a rhythm with your salespeople of doing the right things in the deal. And this is something that really jumped out at me, you know, in my first year at Salesforce, I remember when I went to Sandler sales training, you know, whatever your opinions are on Sandler, it was really eye opening to me that when I walked in the door, I sat down and I realized, wow, like, I already know all this stuff because it was so embedded in our process. Like the questions that you're trained on in Sandler were literally sitting there in fields on the opportunity. And it was part of our pipeline review meetings and our forecast calls. Everything was so embedded into the DNA of the daily sales process from Sandler training and the other methodologies that they use that by the time that I actually went to the class, I had already had that committed to muscle memory. And that only happened because we constantly had managers reviewing our pipeline and asking us about our forecast, leveraging those sales methodologies and that training that they were paying money to have given to their salespeople. And so I think it's like a double, not a double-edged sword. It's a, you're killing two birds with one stone in the sense that you're not just teaching reps how to forecast more accurately, but you're also teaching them how to manage their pipeline better. Yeah. I think you're right. And I think those earlier stage, smaller companies,
ROB LEVEYthe forecast is less important. It truly is. It's like, yeah, that it, it could be a hundred K, it could be 20 K or it could be 300 K. As you say, the accuracy could be anything from 99% to 20%. And if you get fixated on, we've got to have an accurate forecast is no, we've got to, we've got to learn from the process. You know, was that state, was that deal that slipped? Was it truly at evaluation stage, you know, or, or at, you know, was it at proposal stage or was it really at evaluation stage? Or was there a lot more work to be done, you know, at the discovery stage? And as you say, those, those gates of really understanding when a deal moves from one stage to the next and what your risk factor is of moving it, whatever you call your stages, whether it's at 10%, 30%, 50%, 75% or 95% of completion, that's going to drive your weighted calculation at the end of the day of your forecast. So get those things right first, learn from that. You know, why did this deal go south? Who stalled it? Was it in, you know, was it my champion's boss who decided to go, you know, not even buy the competitor's product, but just, you know, stop the project, stop that project and went and bought another piece of software for another piece of the company. You know, it's those types of qualitative feedback on why and what can we learn from it that gives you repeatability of, okay, has this happened once or twice or three times in the last quarter in the last five deals? And that will drive your stages. And ultimately, you know, going back to hygiene of, well, what is the expected close date? How we didn't, we didn't know procurement was going to get involved in our little piece of software and that added 30 days to the sales cycle. Yeah. Well, when that happens for the first time, then it's like, okay, this could happen again in future deals. Maybe we need to put more time into contract reality.
ROB LEVEYWell, and procurement is such a great example because what you're saying here is that the sales rep didn't follow the best sales process because if you're getting side blinded by procurement, it's because
EDDIE REYNOLDSyou didn't ask, right? And so if we go back to the process that I was trained on at Salesforce, as you get further in that deal cycle, you need to start asking what else could cause this deal not to happen. Your champion and your decision maker are saying that they want to have this solution in place by X date. You've backed away from that date to figure out what date they actually need to sign in order for that to happen. Especially with Salesforce, it's like, you got to sign the contract, you got to get the licenses provisioned. You got to work with a company like ours to implement the software, train the people. And then finally you go live and people are able to use the tool. Okay. Like that's part of the sales process is to explain that to the customers because nine times out of 10, they don't understand that. And then you get agreement on, we're going to sign by this date because it's important to you, Mr. and Ms. Customer, that you have this up and running by X date. But then as the deal matures, you'd have to ask those questions of what else needs to happen in order for this deal to close, in order for you to sign this contract. Do you have procurement? Do you have to do a legal review? Do you have to do an IT security review? Et cetera, et cetera. And these are all examples that are relevant for SaaS, but in other industries, there's other examples. And it's just an example of things that are so easy for sales reps, especially new sales reps to miss. If this isn't formalized into your, into your process.
ROB LEVEYYeah. And it's, you know, and I'm a process person. So yeah, that's great. Yeah, I agree. I'll tick the boxes there. But the reality of it is that I'm in a very fortunate position. And I say to our reps all the time, come and talk to me. I buy a ton of software every year. Yeah. I buy those LinkedIn licenses, the Salesforce licenses. Yeah. We use a sales intelligence tool. We've got a CS tool. We've got Marketo. Yeah. I'm responsible for that in my rev ops capacity. And I go through that. I've got to put the new piece of software through security. You know, we've got a, we're a pretty big company. So we've got to put that through the CSO, you know, that software has to pass all of the certification. I actually, you know, I've got to make a decision on that software with the CFO, my CRO normally and my CFO. So I invite the reps to come and talk to me. You know, if you're struggling on a deal or you come across something, even in the contract negotiations, you know, with legal, come and talk to me about what, you know, preferred nation clauses are or what, you know, what auto renews are and how that can affect a deal and, you know, what to redline and what not to redline. I mean, I just, not that I'm an expert on it, but it's like, come and, come and talk to me because I actually do this stuff as part of my, you know, part of my day job. And I can help you ask, at least if you don't know the answers, ask the right questions on how is this going to delay my deal. I love that. I want to take this back to something you
EDDIE REYNOLDSmentioned before we jumped onto the call and talking about how it's so common in forecasting for it to roll from the sales rep to the manager, to the VP, et cetera, up the hierarchy. I forget exactly what you said there. So could you just start over and share that? Cause I had some questions around it. Yeah. So, you know, when I was at Mindcast and we were selling mostly email security
ROB LEVEYand email solution, it was predominantly an SMB play. You know, SMB mid market, we had some big commercial stuff, but for the most part, we played in the SMB space and it was kind of a 30 day sales cycle. And we deployed that forecasting methodology, you know, that they've rolled up, that the sales reps would forecast their 10 or 20 deals. The sales manager would then have a look at it. And then the VP would look at it. Ultimately we'd have a, you know, regional forecasts and then the global number. And it worked pretty well, but you know, what I noticed every quarter was, you know, the reps were very bullish. I've got 10 deals, all 10 deals are going to close kind of at the extreme end of bullishness. Then the managers would go, Oh, hold on a minute. Maybe only seven of those 10 deals will close. So they brought down the forecast. Then at the VP level, it might go up or down a little bit. And at the global, it was just a conglomeration of everything. And the more I thought about it, as you said, in scale of numbers, your degree of like fallibility, you know, got worse and worse because you went down the pyramid, like 10 deals, you say five, you know, versus 10, it is going to be a big margin of error. And when I joined Monotype, I thought, you know, let me, let me try something different. Let me focus on the forecast. Let me own that as a rebel because it's a function. There's enough. Yeah. We're not a big team, but, but we were mature enough to have a team and let me work with the managers first and get their forecast methodology aligned with mine. And let's get that really crisp and accurate and have the reps just focus on the deals and, and literally the hygiene of those deals. So in the one-on-one is that the managers were having with their reps. It was all about the deals. It was all about the integrity of the pipeline and helping progress those deals and make sure that, that, that the pipeline was, was work, you know, that the deals were working through the pipeline. And then I said, my commit is I will build a forecast around the validity of your pipeline. And I'm not going to ask you guys to forecast. And it's been, and it's been, it's been a real interesting exercise because we've dramatically improved our forecast accuracy. And trust me, every week when we get on at a VP level, my CRO literally pinpoints deals and says, you know, that, that close date, um, is, is out of date, or you haven't updated those notes and we'll look, you know, with some really good software on the top deals. We'll look at the progress notes, you know, and say, how can this deal be, how can this deal be in, in like discovery when, when you, you've, you've made three proposals on price quote, and you clearly talking financials or that the contract has already started, you've started red lines with legal. So we'll interrogate and almost embarrass the VPs on their reps, um, you know, notes in Salesforce on those calls, not for every deal, obviously, but, but, you know, the bigger deals will, will highlight it if, if it hasn't been updated. And so the focus every week, the cadence is on, you know, have you done your due diligence on your pipeline? Because this pipeline is rolling up to a forecast that Rob's running that's saying, you know, week three, week 10, this is what we're saying we're going to land at. And it's a pretty good partnership. Now, again, I don't know if this works for everyone, but I found it interesting that, you know, an old guy like me with the hardened tricks. I thought, you know, I'm, I'm going to try something different because I just thought that, that in previous iterations of the rep to manager, to VP, to global, it was like, especially in a, in a slightly bigger company, it was just, we were forcing the reps to, to focus on, on, on a forecast that, you know, wasn't really impacting them. You know, I, I just want them to be successful and let me, let me deal with how the forecast is going. Now that doesn't change what I said earlier about at the managerial level, if you haven't got enough pipeline in the game, going back to the why, if, if you're doing your utmost to drive pipeline and you're not getting enough, that one-on-one discussion on deals and how many deals have you got, what's your conversion rates and how, you know, how do they progress through the pipeline? That's the conversation where you say, I need, I need more events or I need more of these marketing initiatives or campaigns to drive more pipeline because I'm, I'm just not getting fat enough. So it doesn't diminish that side of the business, but it, it does take away the, the, the focus on, you know, what I said earlier is the myopic nature sometimes of your forecast has to be your budget because the CFO said so.
SPEAKER_21Yeah. And when you say budget, you mean target target. Yeah. I don't mean to correct you. I just want to make sure I'm understanding. Yeah. Yeah. I mean, yeah. I mean, that's like the,
EDDIE REYNOLDSlike the running joke of like, uh, I saw something on Tik TOK the other day and it was just like, you know, yeah, here's my forecast. It's a teaser example, 20 million. And it's like, shouldn't that be 25 billion? It's like, sure. Let's just make it up at this point. Like, whatever you want it to be, let's make it that. Well, we, it, it, you know, and now the anecdotal thing,
ROB LEVEYwhen we started this year and the SVPs were asking for, for their regional targets, you know, at the start of Q1 and doing comp plans and everything, you know, the start of the year stuff and we didn't have them ready. We didn't have them at a regional level yet. So I said, you still need to produce your forecast. And they said, well, how can we, we haven't got our targets. It's irrelevant to what your target is. And it was actually pretty funny because the forecast came out and we got, we were pretty good in Q1 at it. And then, you know, obviously we got the targets and stuff done, but it is, I mean, I, I often talk about forecasting and I read about forecasting being it's a team game and we're all in it marketing and sales at the CFO and everybody, you know, should contribute to it. Yeah. My advice is keep the CFO out of it. I have a very good relationship with a CFO where I say, based on the pipeline, based on what I'm hearing on the forecast calls, you know, how big is the pipeline and how are deals progressing? My range of X to Y is still holding up. That's all he needs to hear. And occasionally he sits in on the forecast meeting, but when he does, it's like, just listen to how the deals are progressing. Listen to what the risk deals are. Um, but, but, but don't ever say like, well, isn't that 3 million below target or budget? You know, the, the rules of engagement, I think are super important to have the, the revenue team own the forecast and be accountable for it based on their best estimate of where we're going to land. Not, regardless of whether that's above or below target. Well, and then I would ask like,
EDDIE REYNOLDSwhy is your CFO saying that? Is it because they want to manage the finances of the business or the relationships with investors? Because if you want to manage the finances of the business, assuming they trust you, the numbers are what they are. But if you're trying to please investors and just keep pushing sort of, yeah, that number should be 25 million. Well, like, you know, you're operating on hopes and prayers. And I don't know, that just seems like a difficult game to play.
ROB LEVEYYeah. I mean, we, our CFO is brilliant like that. He, he's not, he's not questioning the forecast
ROB LEVEYagainst the budget or plan, but I have seen it in, in previous companies where, you know, yeah, the board, the board set the number of X million for Q1. Why aren't we for, you know, why, why are we 10 million below four, but below that plan? And it becomes a self-fulfilling prophecy, as you say, then the managers get beat up. Then the managers beat up the sales reps and they say, jack up your forecast. And then it becomes, it becomes a joke. Now, I mean, I will say though, on that note, I mean, if you are 10 million below plan,
EDDIE REYNOLDSlike that's still a problem. I think we both agree that that doesn't mean you just change the forecast to something that's fictitious, but what do you do?
ROB LEVEYIt's an identifier, it's an identifier of, okay, what do we need to do, you know, to change this, this situation? It, but it's not to your point. Well, just change, you know, just, just have your reps change the forecast. And it doesn't, it doesn't happen in that sequential order. What happens is this over a period of time, there becomes this kind of beaten up sales rep kind of, you know, stigma to, well, we should be, we should be forecasting at, at, or around plan. And so it just becomes this almost mental mindset of, and, and that's why I said it becomes a self-fulfilling prophecy, you know, give, give the reps, give the managers the honesty and the credibility. Your forecast is your forecast. That's based on what we see in the pipeline and what we expect to convert. Yeah. And it's so funny. I saw something that went somewhat viral on LinkedIn today. And it
SPEAKER_21was saying the only, the only team in a company that lies about their forecast more than the sales
EDDIE REYNOLDSteam is the product team, which I just thought was funny. Poor product guys. That's cool. Yeah. I mean, I think that makes a lot of sense. And I wanted to recap what you said to make sure that I understand it. And for the benefit of anybody in the audience, what I heard is this, that you're ultimately doing the forecast based on the numbers, that as long as you have enough volume of deals in your pipeline, the onus is on sales managers, frontline sales managers to work with their reps to make sure that they have the right deal stage, the right dollar amount, uh, and the right close date. And from there, if it, if that's as accurate as possible, if they're following the sales process, then you can go in and run the math, the conversion rates stage by stage and get a relatively accurate forecast, as opposed to having the rep submit their forecast number to the manager who then submits
ROB LEVEYtheir forecast number to the VP who then submits their forecast number and so forth.
ROB LEVEYDid I understand that correctly? Yeah, that's kind of how I do it.
ROB LEVEYAnd, and as I said earlier, I probably clouded it with a lot of, a lot of things, but I, I try to triangulate and, and I'll get that, that weekly, how's the forecast changing over history? You know, so that's kind of a historical perspective on run rate stuff. That's my, my first sort of piece of the triangle. The second piece is my weighted pipeline. It's exactly what, what you, what you described of how I go about the methodology of looking at the pipeline, the conversion rates, the stages, and say, okay, based on how cooked this pipeline is this quarter, that's what the number is. And then my third is, is the VP or the CRO. If you're a small company and you, a manager of one, it's like, what's your gut feel? You know, you've been through this, a number of quarters now, I hope. And, you know, do you, do you feel, you know, what, what's your range? Do you, you know, are you feeling good about the quarter? Are you feeling bad about the quarter? And, you know, what, again, what's your likely or commit and what's your best case or upside? And in between those three, I probably put more weight on the weighted pipeline and, and, you know, historical, a little less weight on that, just because, you know, quarters change and, and they, they're very different. And then quite a bit of weight on, on the SVP's gut feel. And that's kind of my triangulation, ultimately, of art and science is it's a, it's a little bit of everything. It, it's an ingredient, you know, a bunch of ingredients going into saying, you know, this group says it's going to be 20. This, this one says it's going to be 25. And this one says it's going to be 22. Well, my range is now between 20 and 25. And does that make sense? And then how do you pick an actual number that you give your CFO from those three? And I give his range. I give him a likely and a best case, right? And like my accuracy, I'll say, take the midpoint. So if, if I'm saying my quarter, this quarter is going to be between, you know, 50 and 60. Um, and, and I said that in week three, my midpoint is 55. And I measure my accuracy on, okay, we landed, we landed at 50, 50 divided by 55 is my, my accuracy. Okay. And you got to 50, 55 because you've got one number for your commit from the weighted forecast.
EDDIE REYNOLDSYou've got a number, another number for your commit from historical numbers, and you've got another number for your commit from what the management is telling you their gut feel is. And then you have those same three numbers for your, your best case or your upside. And then you're taking those three numbers. Yeah. I even make it simpler than that. If, if I've got a triangulation of historical, a is,
ROB LEVEYis 50, um, weighted is 55 and man manages that is, is also 55. Then my range is from 50 to 55. And then for me, that likely and best case is going to be somewhere between that. And, you know, it, it, it'll, it'll probably be 50 and 55 in that case, but I, I don't go do six full costs of a, a, a likely for all three of those and the best for all three. I just triangulate between the ranges. Yep. Yeah. Yeah. That's what I understood. I think I asked it in a long winded way.
EDDIE REYNOLDSYeah. Um, yeah, that makes perfect sense. And it aligns with everything that I have seen. And then I think the point that you made with what I saw at Salesforce was that pipeline hygiene going all the way through the hierarchy. So, you know, we, as a ease would get pinged on a particular deal, especially if it was one of the larger deals in the overall pipeline, especially across the, uh, you know, the entire country, that's where my executives, um, sort of stopped. And, um, you know, if they're looking at a giant pipeline, you've got one of the biggest deals and it's in the discovery stage, but you're, you know, sending out pricing proposals or vice versa, you know, you've got it in the negotiation stage and you haven't talked to them in three weeks and you haven't even done the demo yet. You know, there's going to be a lot of eyes on that. Yeah. And what I found is, is that a, the act of that VP or executive VP going in and looking at that deal and looking into the details of that deal and asking, why is this here? Because based on what I'm reading, that doesn't make sense. It not only helps clean up the forecast, but it also just improves the overall sales process because it becomes part of the culture for the company, because that happens to you once your boss's boss's boss pings you of like, why is your deal sloppy? You try not to make that mistake, a second time from what I've seen. And now all of a sudden you're like, oh, that was painful. Not only did I look bad, I mean, my manager looked bad. Let me not do that again. And now it becomes part of the DNA of your sales process and by extension, the company's sales process. Yeah. I mean, I'd, you know, I'd like to be philosophical and say that, you know,
ROB LEVEYthe carrot method is better than the whip and we don't like to be embarrassed, but it, it is human nature. Um, but I, I do honestly like to think that it's a learning exercise and it's like, sometimes, you know, these AEs are first or second year in sales and they don't know. So it's, it is a learning. It's like, yeah, I didn't, I didn't really know what proposal meant, you know, and, and that's, that shouldn't happen. But sometimes just the obvious to us is not so obvious to brand new reps, the nuances of stages and stuff. So I think as long as you make it a positive learning experience, as opposed to necessarily a flagging, then that's fine. And, you know, I remember years ago, I actually made an MBO for it and we took, you know, we didn't, we didn't pay any more money. We took 10% of, of the OTI and made an MBO and, and it was, you had to have good Salesforce hygiene. And so we paid on it, but I remember taking it to a CFO and it had to have been 15 years ago in the earlier days of Salesforce. Um, and my CFO said, there's no ways I'm going to pay people for hygiene. And I said, honestly, it, we're not, we're actually taking a little bit of commission money away and we're paying it in a, in a different way. And yeah, if they weren't to make their commissions, then in a way we are paying them. But I said, it will be the best dollar you've ever spent. And sure enough, everybody got paid that MBO and lo and behold, our, our, our Salesforce hygiene got much, much better. People paid attention to it. So, you know, I, I have been known to actually incentivize hygiene because it's that important. I love that. And I would say like, for, to make things clear, the experience I had, I don't think
EDDIE REYNOLDSanybody was cracking the whip that hard. I think it was really just that, like your boss's boss is saying, Hey, what's going on with this deal? And you realize like, oh my God, like, this is like, just bad. Like it shouldn't be in this stage. It's obvious when you look at it. How did I not catch that? How did like the manager not catch that? And it just, it tells everybody like, Hey, there's going to be eyes on this. Hygiene is really important. Let's focus on this. And then it becomes part of the culture. And the flip side, I remember I worked with a company a number of years back and I opened up the pipeline and they had a 30, 45 day sales cycle. And I look at the pipeline and they had just fired their VP of sales. And I think I understand why. And the entire pipeline was more than 360 days old. And I'm talking to the sales reps. I'm like, no, I'm still talking to them. I think there's, there's a good chance here. And I'm like, there's a good chance to close a deal at 385 days after you opened it, when your sales cycle is 30 to 45 days. Like, and then the problem with this is that the sales reps are not prospecting enough because they're fooling themselves thinking, I think I got a deal here. Like this guy's still talking to me. I think I'm going to be able to hit my number this month or this quarter, instead of like facing the hard reality that, oh, this is not coming in and I've got real serious work to do if I'm going to hit my number.
ROB LEVEYYeah. It's not, I agree. I think it is a bit of both. It's a bit of naming and shaming. And it's a bit of, you know, I've used incentives, but I've used name and shame. Those lists of, you know, not the sales leaderboard of who's closed the most business this year, but who's got the most days outstanding, you know, aged pipeline, who's, who's got deals that are past their close date, you know, historical close dates after today or before today. Um, those lists do, I mean, you know, they, they, they certainly focus the attention and there's nothing wrong with them, but yeah, it's, um, it, it, it's a little bit of both, but it, it highlights, as you say, there's a lot of eyes on this. And again, it goes back to the, why, why is it important? It's really important to drive the predictability of our business so that we can, we can say we're having a good quarter. Now we can actually put some money in marketing those territories that don't have enough pipeline. I mean, that's, that's a real solid benefit of accurate forecasting is to be able to free up some cash flow. Yeah. And I was going to add, I want to hear what you had to say, Jerry, but I'll just
EDDIE REYNOLDSadd to this. In this particular example, what we did is we got rid of all these deals really quickly. And so now all of a sudden we lost 90% of our pipeline and then it became, okay guys, instead of spending time chasing these deals, spend time prospecting. And now we start generating real pipeline and they have a real chance to close. And that all happened in a matter of a couple weeks. Um, so it was really just mind blowing to me that they had a VP of sales in place that, that wasn't on top of this because he was literally investing his entire sales team's time chasing deals that were
ROB LEVEYnever going to close instead of prospecting and building pipeline. Yeah. What I was going to add
ROB LEVEYwas I, I think it's with some teams or some individuals, it's just helping them to understand that it's an opportunity. It's not your relationship, you know, just because you, you mark this as a loss, you maintain the relationship, you nurture it. And when the time is right, you create a new op for it. It, you know, it's not indicative of the fact that you're never going to speak to these individuals again, either there's, you have to learn when to sort of cut the loss, but maintain and nurture and re and create new down the road, as opposed to having either 500 day old opportunity because yeah, it ebbs and flows. Sure. Nothing's going to happen right now, but they let it slip for 30, 60 days. And maybe somebody sprung up and said, yeah, let's, let's talk about this again. You don't just keep that same opportunity open in perpetuity until it becomes a win. John McClendon: That's such a great point. And I think that that's something that's really hard for
EDDIE REYNOLDSsales reps to understand because they forget like how easy it is to run a report of dead opportunities and call down on them. Like that, that is no difference between doing that and calling down on your open pipeline. And so, but it changes your mentality when you say, okay, this deal is no longer in my pipeline. I don't have to follow up with them. So now my question to myself is when I'm prospecting, who do I want to call? Do I really want to call that guy for the 15th time? Or do I want to call somebody new that might actually want to make a decision, you know, this century? John McClendon: Yep. John McClendon: Well, Rob, I feel like we have exhausted this in a very good way. And I have learned so much on this call. It's been some validation of some things I've been thinking and some new ideas as well. And I really, really appreciate your time on this.
ROB LEVEYJohn McClendon: I know, no, I've, I've enjoyed it too. And you can probably hear from the, from the
ROB LEVEYamount that I talk that this is, is, is very near and dear to my heart, as I think you said at the, at the opening of the call, but it's, it is fascinating that it truly is. There's, there's no black and white, you know, it truly is a combination of art and science. And, and, and, you know, I think that the part in comment is you, you don't learn until you, you start going back to what did I do last month, you know, and, and what worked and what didn't work. And it truly is iterative. And I found it iterative over 20 years of seven or eight different companies now. And because it changes every time, but you learn a little bit every day and you, you never stop learning because it's, it, you're never going to get it, get it right. You know, you're always going to be stumped by that one deal that flies in as a bluebird or that deal that just, it was absolutely a, a no brainer. And then, you know, they pull the brakes on you. So it's the more iterative you can go, you know, and just be systematic and saying, okay, what worked, what didn't work quarter on quarter, on quarter, on quarter, you know, it just,
SPEAKER_28it, it gets better over time. Yes. Couldn't agree with that more. Well, thank you so much for joining
EDDIE REYNOLDSus. Yeah. Thanks Rob. Thanks again. Thanks for, for inviting me. It was a blast. Yeah. We appreciated it.
