The Operating Rhythm of Regularly Building, Progressing, and Closing Pipe

Neel : Hello hello! Matt Durazzani, welcome to the revenue Maverick program! I'm so excited to have you here! You will be a fabulous addition to our ever-growing list of Revenue Mavericks. Welcome!

Matt : Thank you for having me, thank you.

Neel : For our audience, let me introduce you to Matt Durrazani he is EVP of Revenue Operations, have been in these roles for a number of years, roughly two decades is that right Matt?

Matt : This one and other roles that led up to it for sure. 

Neel: That's right. I have had the privilege of knowing Matt for more than a year now, and I'm fascinated by his level of diligence and insights that puts into running the businesses. Matt is truly a revenue Maverick. Matt in the program today we would love to hear from you on how you look at Revenue engine, metrics that you care about. This program and this recording will be made public and it will be available to a lot of aspiring Sales Ops, Customer Success Ops, Revenue Ops leaders out there who want to look at the way you look at the business and utilize that in their own companies and enterprises where they are working. So with that, without further ado, the floor is yours my friend.

Matt : Well thank you. uh you've been too kind. I'm excited to be here! And yes I think uh it's definitely an area of the industry that, it's evolving, it's growing, and I think expert sales leaders and executives are finding a lot of value in having let's call them, these Revenue operators, that really support the strategy of the organization to grow and achieve their goals. Perhaps one of the the main things that I could share is that when I look at the the revenue operating flow, for me it's really 3 core areas of the business, and I can look at a lot of different things right,
but essentially I look at in the terms of, we want to build, we want to progress, and we want to close pipe. And having this mentality and behavior motion on a day-to-day, uh whether it's from an executive perspective, whether it's from a rep perspective, the more you buy into this mentality that you constantly have to build, progress and close the pipe, and to have that cycle in your mind, it really allows you to actually be more thorough in managing your business effectively. So maybe a quick introduction on what these 3 areas are? Right? When you think about closing pipe, it's more like what is the immediate money that we can gain from what we have put in our efforts of the pipeline? So that is under the area of forecasting, uh that deals with your targets and your current performance, and what you have upcoming that you want to execute around. And then reverse engineering from there, the next level is okay, how are we managing our pipeline? What do we have open? How do we progress it? What
is stuck? And how do we empower our people to move it forward? So that we can capitalize on the efforts that we put in thus far. and then you go all the way up the funnel to understanding what are we to do to build this momentum? As we move and close the pipe, how do we replenish those buckets so that we never have a tendency to miss quota, or missing
targets that could have been avoided if we did the right activity on a consistent basis. And that deals with pipeline generation, it deals with understanding how each of the territories that have been assigned are performing, and how is the day-to-day activity that by law of averages, eventually converts into something in the pipe that then has a potential to close. And so that constant concept is something that I look at on a daily basis and then I have specific metrics in support of specific scenarios of the challenges I may face as a business. So with
that in mind I thought that for today, maybe I’d share 2 or 3 examples that perhaps can be of help for other people that are listening, to how I run the business and what has made a difference for me and the leaders that I support in that element. 

So for today what I would like to talk about is 3 examples, one that deals with
how do you look at runway. I call that Triple R, it stands for Runway, Risk
and Resources. Another one is about around capacity, how do you manage that? and then another one that is very particular to to my experiences is dormancy, and there's a specific definition around it. so let's dive into the first one. As you can see here, we replicate a little bit of a scenario that we've had multiple times. Triple R stands for Runway - meaning how much time we have left to make things happen? Risk - what deals are potentially at risk to either push or be lost as if we don't do certain things? and then Resources is really around what do we need to do, who do we need to pull into this deal to ensure that the execution is successful?
So this metric demonstrates the timeline of the deals in relation to the close date, but also the total ARR that is expected to close within those days.

What's key here is that, often times with we talk with the the sales leadership, as we make the forecasting call, is you know, what do we expect to close? And one of the patterns that I've noticed over the years, in all sorts of size businesses and industries, is that reps tend to put a lot of closed deals, on the last day of the quarter and the last day of the month. Now there's nothing necessarily wrong in that behavior, right, but typically that’s an indication that there is not a very clear path to actually execute the deal to the finish line within that time frame. Deals that fall during the month in very specific dates, they usually indicate that there is some sort of alignment with the client and a very clear expectation that what's left to be done, and is sufficient to be done by that date. And so anytime I see deals, in this case, I see almost 40% of what we're forecasting to come in the last 48 hours of our quarter. Typically
there's an 80% probability that it will actually push to the next quarter. And so this becomes the opportunity for me and the leadership to manage by exception to say let's look at these deals. What's happening here? What needs to be finished to be taking them through the finish line? And most important how do we do it?  Who do we bring in to ensure that there's success there?
So this really brings a major hyper focus on execution, versus on hope cast mentality, and also it allows us to be reducing as much as possible the risk of push deals in a quarter. 

Neel : that makes sense, Matt. So in a way the business decision you're making is I have the
following Runway and what kind of risk of resources being not available would I be facing? So clearly on the last two days of the month here in November, you're seeing lots of deals
which means your resources will be strenuous. Now what do you do with that? I mean it's
good to have that information but how is this actionable?

Matt : Yes, so as you dive into each of the deals with the leaders or the reps, you
can ask questions on is this also sufficient time for the resources on the client side?
Will legal be available for signature? Will that executive be available for
execution?
And then as you start unpacking the deal, oftentimes say well we have to do a demo, we have to request this information, we need to get alignment with these other leaders, and you start going through the list and you're realizing that's a lot of work to be happening in now maybe 3 weeks. Realistically maybe it takes us 7 weeks to do that, so does this deal really belongs in this quarter?
Or are we risking to push it too hard  that we may lose the deal? Right? You start having a conversation and more of a deal review that really impacts and makes things real for both the leaders that are hoping to forecast the deal, but more importantly in ensuring
that this revenue gets accounted for, and is not lost.

Neel :  That's that's pretty well put. Now as you are doing this, who is in the room? who is this being looked by?

Matt : at the very minimum, usually there is at least the head of sales whether it's a CRO or another role, sometimes the CEO is involved in these type of meetings. There's usually the regional leader that is overseeing that deal or sets of deals, and in some situations there might be the CFO, there might be other executives, there might be the head of Running the technical teams, the support, and there could be people from the implementation side of things, on the
customer side, And sometimes we even have other teams like marketing, that say what can marketing do to lean, access, advance pressure and incentives to pamper these customers, to make sure that the right type of support is delivered in their experience in buying from us as a vendor. And so really it can be as many people that the leadership team sees fit to gain the most value and engagement to support the deal for success.

Neel : This is fantastic reminds me, I had seen “Revenue War rooms” in the last 3 months of the quarter where the leadership would get together for two hours and a special room will be reserved, everybody will be in the room and basically action items and to-do list will be created from working backwards. You've given it a very beautiful name and I love the way this metric play out, RRR metric is the way to de-risk your end of the quarter and make Sure the resources are channelized in a way to maximize the outcome. Very well put together! I love this! I am going to use this in my next role. all right so tell me about this new second metric that you would like to enlighten us with.

Matt : Yes! So we talked about the importance of this operating cadence of building, progress and close, repeat. And so one of the things that we found success in looking at, is actually breaking the entire pipeline into more individual buckets. Not necessarily just by individual stages, but combining some stages based on where the deal is in the journey -  too early, maybe mid-level, closing level. And one of the things that we do is if we have a capacity volumes, we have a certain Target, what is a capacity ratio that we should apply to say if we have this ratio there's a chance that we will hit and exceed the quote about if we're below this ratio we're likely going to miss our targets. And so whether that is a 5-3-2 , or  7-5-3? Whatever leaders are used to, it doesn't really matter, what matters is that you have in your way of measuring the pipe a capacitive volume that allows you to secure the right volume to a quarter. In this case what you're looking at here is the amount of ARR broken up in three parts of the pipeline the early versus the end and what's very very interesting is that immediately by looking at this in the first three bars I can quickly sense where we're strong and when we're weak. And so what I can see is that, while we've been focusing very much in closing business, which is a very good thing to do, we are at risk of missing future quarters because we haven't replenished the early buckets that then trickle down towards the finish line. And so that's an error that needs immediate triage and activity, along with everybody else that supports that top of the funnel. But another one that is very unique and yet very very common in most companies especially those that do Enterprise deals, is that metal package where you have qualified deals and you've gone into maybe on a technical level, but you haven't been able to come out of maybe that value proposition that technical experience success of the POC, whatever you call it, to be able to convert it towards the end. And so that is a portion of our pipe that is getting stuck and it needs the ability to be triaged and accelerating and unlocked so that we can allocate resources throughout the pipeline and not just in one area. So this is a quick temperature gauge to say where do we need immediate attention? Where do we need to continue? And where do we need to replicate success?

Matt:  Okay the last one! Now this is uh this is a very particular one. Dormancy oftentimes people may think is simply aging and stage. For me it goes way beyond that element. Aging and stage uh can be a helpful metric but it's incomplete when you think about everything that deals with running the deal successfully. And so what I like to do is I like to define dormancy around specific variables in the CRM or in the other processes supporting it that are key to me whether it's number of days in philosophy that has been in that stage but also specific activities that have not occurred. Maybe market size, maybe target accounts, specific industry that we're focusing from a 10 perspective. You could really come up with your own ingredient formula to determine what is the right dormancy for your business. And once you do, you now have a way to look at through the different stages of your pipeline to determine based on what we're trying to Accomplish as an organization, what are the most ideal deals that right now are getting stuck and not receiving the right support. And what I like to tell people about this one is that this is free for everyone! Every organization has the ability to find free ARR that can be unlocked. This is money that we spend up front, energy, marketing spending, whatever it might be to generate it, but then it's died or a stop for us, and it's free for us to go and unlock it and leverage as quickly as possible. It's also the type of question you ask where can I find the most immediate ARR for converting the forecast? And this is a great way to go find that money, and be able to go and look at it from a regional perspective, a rep, an industry, and say what do we need to do to unlock it and start moving it forward?

Neel : That is very well put. In fact where we are in the world, and what's happening to the macroeconomic climate, dormancy is going to be one of the biggest factor crowding up the pipeline, and sub-optimal conversion rates, and this can only change when people are able to figure out. Now very interestingly, how you have created this metric is, your definition is opportunity in stage 3 which have not progressed based on the velocity expectation. How are you coming up with that expectation?


Matt : Right, so one of the things that we look at is based on region, what is the usual velocity to go from one stage to another or at least from one bucket of the pipeline to the next one. However you want to define it is, we try to apply a statistical model to it  but we like it also to personalize it by team and region so that you don't skew the numbers by saying hey you know Matt should do it faster because Neel can do it faster. It's tailored very much to the experience of that region, that industry, or a specific team. And based on that one then the ratios applied in each of the regions, and then provide these are the deals that should be moving faster, regardless of what the region compares to another. It standardizes for everybody.

Neel : That is very good! So in fact this might be a good time to do a plug. You know the hard part of doing such analysis is that historical data has to be snapshotted, so you can calculate the conversion rate and velocity at the time - last quarter, last year, multiple quarters back, and snapshotting such data is not possible in Salesforce so often people have to buy a warehouse and then a visualization tool which makes it a full-on BI project and an often sales team are not funded to do their BI. BoostUp has a functionality called RevBI which can be extremely powerful for this. So for our listeners who are looking for a simple way to get to Matt’s Dormancy metric, you can do that using RevBI. Getting back to the topic, This is fantastic Matt! I love it! Do you have more nuggets for us today?

Matt : No, I think what I would tell to anybody that is  trying to improve the way they look and manage revenue, is really try to understand  and listen to the forecasting calls, listen to the sales leaders that are responsible for the revenue uh of the organization, listen to what the board and investors are really looking to answer, and try to model the way you operate the revenue in a way that metrics support those very specific decisions. You can get lost in the metrics, and if you are blessed to have resources or metric tools, you can come up with a thousand metrics that may or may not be impactful. What's really important is that build metrics that are really tailored to specific actions. Focus on the actions and eventually by law of averages things will fall into place.

Neel : That's true. That's true. Matt,I want to take a moment to thank you for providing your guidance, and helping the community with the metrics and the way you look at the world. You have 2+ decades of experience in this space. Revenue operations is a fast growing space and in fact the hidden gem and the heroes of any revenue result, are revenue operators. I fundamentally believe in it. Throughout my career as a CRO, I have relied on a partner like yourself in producing good revenue outcomes.  And more and more as all aspect of revenue functions are coming together, which is demand gen, sales and customer success, the operator role is becoming even more important. So thank you for being available as a Maverick and being available to the to the community at large for providing your guidance! Before I let you go, let me ask you one last question. At what point in your career did you think you would eventually become a Revenue Maverick?

Matt : You know it's, it's a good question ! I have a very interesting story. I won't get into details but I started from a technical perspective - on the engineering side, and then from there I learned very quickly that while I love the technical side, I had more passion for the sales side of things the commercial aspect the management side and I got exposed to all a number of different roles from the marketing, and the end-to-end journey of a customer, I've done it all. And what's interesting is that by being a person that carried his own bag, his own quota, and so walked in the shoes of the sales people, and those then have to try to to make a deal out of nothing, I've learned that revenue and operations are best supportive when they are led by people that have walked in those shoes and understand them. And so eventually it was almost like a natural fit that I felt that I had an opportunity to contribute to something that most people don't have that experience, and I felt I could do something about it, I can be a contributor. And so far it's been a success and I really enjoyed helping leaders, skill their businesses and the reps being even more successful, by having the tools and resources they need to really do the job as best that they can.

Neel : Matt, thank you.

Matt : My pleasure! Thank you so much!