Reality-based forecasting with Diego Panama, CCO, LiveRamp

Devin Reed: Welcome to the show. You are now part of Reveal. The Revenue Intelligence Podcast powered by Gong. We're your hosts, Devin Reed.

Sheena Badani: And I'm Sheena Badani. Revenue Intelligence is a new way of operating based on customer reality, instead of opinions. It's an unfiltered view of your customer reality. In other words, making data driven decisions based on facts instead of opinions, or guessworks.

Devin Reed: And it's made up of three success pillars, people success, deal success and strategy success, the things all revenue teams need and care about. Every week we interview senior revenue professionals and they share their stories and insights on how they leverage revenue intelligence to drive success and win their market.

Sheena Badani: You'll hear how modern go- to- market teams win as a team, close revenue with critical deal insight and execute their strategic initiatives. Plus all the challenges that come along with it.

Devin Reed: Sheena at Gong, we host a lot of executive round tables. We listen to voice of the customer through Gong, surprise, surprise. We're looking at social media mentions and just topics that revenue leaders talk about. And one of the things that consistently comes up very often is deal predictability or another way to think about it is forecasting. And we had great forecasting conversation today with Diego and we've had another good one recently with John over at point click care.

Sheena Badani: Yeah. There's some really good industry stat, and I wish I could remember the source of this, but it's about half of the deals in your pipeline will ultimately close. And so it's all about figuring out, where should you as a team from reps up to leadership, be focusing that time and understanding and being able to accurately predict is a big part of that.

Devin Reed: 100%. And it's interesting because as you have these conversations, reps, view forecasting typically as data entry and when am I going to close so I can figure out my commission, which completely makes sense. And then as executives it's really more just about strategic planning, right? How can we be more effective and more efficient with our strategic planning? If we know what's going to close when it's going to close, et cetera. And so I had a really good time with Diego because one of his keys to success, I'm just going to give it away right here now, is a lot of their forecasting is done based on buyer signals or voice of the customer or in other words, specific actions buyers do in this sales process instead of selling actions from his sales team, which I thought was really interesting.

Sheena Badani: It all ties back to reality. What's actually going on versus the happiers and what you think is going on.

Devin Reed: Absolutely. I think he called it Rosie eyes, which I liked, I think it was rose colored glasses is the phrase lot of good takeaways, but if forecast accuracy and improving it is top of mind or even on your top five list, this is definitely something that you're going to get a lot of value from. So Hey, let's go hang out with Diego. Diego it's Friday morning, we're all in a great mood. You included. Thanks for hanging out with us on Reveal today,

Diego: Devin, Sheena. Thanks for having me.

Devin Reed: Let's just get started for folks not familiar with LiveRamp. What problem does LiveRamp solve?

Diego: So LiveRamp makes it safe and easy for companies to use data full stop. So we really help companies use data and usually starts with marketing, but then it evolves to basically the whole customer experience and helping companies really become data driven.

Devin Reed: Love that. We're all about data here, as you already know. And you're the chief commercial officer. So what do you focus on over there?

Diego: As Chief commercial officer. I focus on all things customer. I like to say that my job is really customer success. Even though we start with sales, everything pre- sales, post- sale falls under commercial, but all of our team's job and everybody in our company is about customer success, specifically it's sales solutions, engineering, customer success support services.

Sheena Badani: And I see you've had an amazing career and run at LiveRamp. You've been there almost eight years, starting in sales and moving your way up to SVP of revenue and then chief commercial officer. What do you think really drove your ability to really grow your career and experiences at the same company?

Diego: Yeah. It's been a very fun and amazing run here at LiveRamp, but like you said it, I've been here almost eight years and I joined, I think I was our second rep and in some ways my job then my job today is the same, which was, Hey Diego, can you join and help us work with some strategic enterprise customers. We were about 30 to 40 people at the time, about 10 million in ARR and a very small sales team. I think we had probably a couple dozen customers, very highly concentrated revenue, fast forward to today. We're 1200 people, about 500 million in ARR and over 800 customers. And I like to say I've had every sales role at the company between then and now. And personally I think in terms of how I kept growing with the company, I'm naturally curious, but I'm also just... I'm very motivated by building and by scaling. So whatever we're doing, how can we let it scale? How can we build a process around it? How can we double it? And that's just been the mentality and the team will probably, I don't think, I hope they're not tired of me hearing saying this, but we're still just getting started. I really believe that the opportunity in front of us is huge and this is just the early days for LiveRamp, which makes it very exciting.

Sheena Badani: That's super inspirational, exciting for your team.

Devin Reed: It's a great journey. And speaking of scaling an important part of that I imagine is forecasting, which gets us into our topic for today, how to forecast with incredible accuracy. So everyone listening knows what forecasting is, but I'd love to hear from you Diego, why is forecasting so important in your opinion, or maybe even at your role at LiveRamp.

Diego: From a business perspective, forecasting is crucial so that you can plan, you can plan budget, you can plan... If you don't like how the forecast looks, you can plan how you're going to go make it better. And things like that. And forecasting is usually associated with sales and bookings. And we can go deep into, we've grown into our forecasting here at LiveRamp, but it applies to contraction the customer count hiring. I mean, just really predicting your future so that you can plan for it is a very important part of business and data plays a key role into that obviously.

Devin Reed: And what are some of the risks, or maybe you've experienced at LiveRamp if you can share, but of any accurate forecasts?

Diego: If you don't get your forecasting, right, and let's just focus on sales forecasting, it can have real impact on your planning and on your future. And whether you forecast too high or too low, if you don't get it right, it can have a real adverse impact. And in a SaaS business where we're usually forecast on bookings, bookings is really leading indicator to future performance of revenue of the company. And so what our forecast on bookings is, it's going to have a real big impact on our hiring plan and not just for sales, but for the village that supports the sales team, whether that's the legal team or data ethics team, solutions engineering, our product, are we investing. Then we forecast growth on this particular product to be too low, and then we didn't invest enough to meet demand then and then we're behind. So it just becomes really important. And if you under forecast, you might under invest in areas where you have a huge opportunity. If you over forecast, it's the other way around. It's like that golden love thing, trying to get it just right. Becomes really important.

Devin Reed: What does forecasting look like today?

Diego: Forecasting. I don't see it as a leadership exercise or something that just falls on the shoulders of sales leadership. It really takes the team to get forecasting. The most obvious is just data entry. If the team is not contributing with using the tools or updating Salesforce or whatever it is, it's going to be very hard. And something that we've tried to do that I think it has helped our forecasting. I'm really proud of our forecasting. We'll talk about how we do it, but everything else at LiveRamp, we try to push it down and push decisions down. If every one of us can have our own forecast and stick to it, myself and my own book, if I'm a rep and it's, this is my forecast for the year, for the quarter, these are the products I'm going to sell. And then I do a data entry properly and then we bubble it up. We're going to get a very accurate view into the all up forecast. So it's really a team effort to get forecasting.

Sheena Badani: So you talked about data and the critical role of data and forecasting. I suspect there's also a role that opinions play and your expertise that you're able to bring over time. So tell me a little bit about what role does data play and what role does your opinion play?

Diego: There's maybe three components to our forecasting. And one of them is just the pure on data entry. I have so many opportunities at this stages with these close dates. That's one thing, the other one is... To answer your question Sheena is what we call leader judgment. So in every forecast there's room for leader judgment, which by the way, more and more is informed by AI, which is really great, because we have all these different tools that will have different AI predictors. And I have learned how I work with AI and it's at this point in the quarter I'm usually above. And so that leader judgment is slowly becoming more AI driven than the little driven, but for sure there's subjectivity there. But the third element and probably the most exciting thing for me of what we've done with forecasting at LiveRamp is that we've really embedded it into our customer life cycle, into our sales cycle and into our journey. So the way that we came up with our forecasting, we start started with what some companies would call a playbook or a sales stage management guide, which for anybody there, who's starting to think of how do I improve forecasting? How do I even get started with forecasting? I think the first step is to just have a very clear understanding or as much as possible what your sales cycle is and to understand your sales cycle, you really have to understand your customer and how they experience your solution and their buying journey. So we started with that and then we understood that, Hey, it's usually there's some discovery. And then so you're in this phase and when you're in this discovery, this is what the customer needs to get from you. And this is what you need to get from the customer. Once that happens, you check the box and you can move into a proposal stage. And so for a proposal stage, this is what you need to get from the customer, the requirements, the KPIs, what success looks like. And then this is what you need to give the customers. So a workflow pricing, et cetera. Then you go into a negotiation face and in the negotiation phase, just to give some examples, like Redlining is a key event. When we give a contract, that's a key moment in the sales cycle. When we get red lines back, that's a key moment in the sales cycle. So in every one of these faces, that's what we try to do understand the buying journey from a customer perspective, what are the key pivotal moments. And then we connect those to our pipeline management to our forecasting. And so instead of asking, what deals do you have that are going to close next month? I'm going to ask how many deals are you in red lines right now? Because we know that's a key indicator. And once you get to red line, there's an average number of weeks that's going to get through from here to close and you just get a much more accurate forecast. So starting from the buyer journey and how they experience depending on the segment, are you going to run into procurement, are you going to run into InfoSec, are you going to run certain things and then translating that into a give and take playbook and then making sure you capture all those data points in your tools. That's how you end up with what I think it's the right forecast management. So anyways, long- winded answer to say, there's definitely putting the data in, but then that data has to come from your playbook and understanding your buyer journey, and then the leader judgment that goes on the top.

Sheena Badani: That's great. And I specifically love the part where you said it's those indicators from the customer's perspective, it's not just, Hey, you sent the contract over, but it's that the customer responded and they sent you their red lines. That's, what's showing the intent. It's not just the activity that the rep is doing, that's going to drive and influence that for forecast.

Diego: To echo that I would say the more that you can pinpoint on what are those buying indicators and when they're going to happen. So for us, for example, get, and I would imagine for any enterprise SaaS getting red line back, we celebrate that. That's a huge step forward. To give you an example of something that happens slightly before that, for us, we know because we deal with customer data and we're talking to fortune 500 companies. At one point or another, we're going to have to talk to InfoSec and show them how we take care of data, how our security processes work. So that's a key moment in our sales cycle. When we get that, when we get the questionnaire, we celebrate that, Hey, we're making progress in our sales cycle. So really pinpointing those pivotal moments where your buyer is coming along with you is really important. And it's not just the hunch of, oh, I'm doing great. We've had five calls. They love me. Most sellers. We have very rosy eyes and we think everybody's going to buy from us next week. But if you can be objective with the milestones that are on the sales cycle, that'll help your forecasting quite a bit.

Devin Reed: Yeah. Liking the sales rep might be just a tad bit of subjectivity in that forecast.

Sheena Badani: So Diego, I think you were with LiveRamp as the company went public. So tell us a little bit about how your approach to forecasting and pipeline management evolved from pre IPO to now as a public company.

Diego: I like to think of it as just been part of our journey and how we grow up, but it just happened to be that as we went public, our focus on forecasting and just being able to be very predictable on our planning just became that much more important. And so that's when we really started paying attention, we had done a very good job understanding the buyer journey and we call it our sales playbook. We wrote the playbook and this is the steps that will happen in your sales cycle. These are your materials. This is your first one sheeter. This is how you talk to InfoSec like that we were talking about. And so we were at that point and then we became public and we had this focus on just, Hey, the forecasting is really important. We have to start thinking about guidance and how we're going to inform that. And that's when we connected the dots and said, if we look at our playbook, there's a much better predictability there. Understanding once you get to this point, once you're at InfoSec, how many weeks you have left in the sales cycle. And so on like that. And that's when we started connecting the dots between capturing data points of our playbook and putting them in our pipeline management system, we keep getting better and better, but we've had great predictability in our forecast. And I have to give a shout out to our sales op team. Again, anybody who's thinking about forecasting, starting with the most incredible sales ops team is a inaudible. Because Daban team here at LiveRamp are just world class and have really taken forecasting to the next level.

Devin Reed: So Diego, you are doing a phenomenal job of laying out the playbook. What are some of the challenges that you ran into? So listeners who are going to go down the same path and know what to expect.

Diego: Probably their hardest challenge. And I think what we can all relate to is just data entry. Forecasting is important to leadership and management, but how does it, as a seller I have so many other things to do, why am I going to spend an hour or two hours with Salesforce and just taking notes down however it is that you do data entry and that has gotten a lot better over time, tools like Gong and others make it a lot more seamless for the seller to be able to capture what's happening in the sales cycle, in the tools, but still it was a challenge and it is a challenge to get that buy in from the organization that this is something that's important to do. Two things popped up that help us overcome it. And I like the second one more than the first one, the first one is as a sales, you get tired of 3, 4, 5 different executives across the company asking you, Hey, where are we with this? The best answer is check the deal notes. Everything's updated. So in a way it does make your life easier if you keep it updated. But really I think the way to do it is to try to come up with a forecasting system or a pipeline management that adds value to the seller and their sales cycle. So one example of how we did that is as part of that playbook that I had talked about, we had landed on a path to close working document, which is, Hey, once you get red lines, you're probably four to eight weeks away from closing the deal. And usually these are the things that you want to think about. Is there a procurement involved and have you connected with them, check the box. Do you know who this signer is? And are they going to be on vacation? Is there anything in their schedule in the next three... That we should be aware of. Is the signer different than the person that... So we had this checklist of a path to close that when we did deal reviews, because we do a lot of deal reviews, proof to be very helpful to sellers because you realize that if you did the path to close, you actually had the likelihood of you actually closing the deal were not quite a bit then if you didn't and then you had all these surprises. And so it just became very clear that participating in this pipeline management process and our forecasting process was actually not just good for forecasting, but it's just help you close the deal and help you move the deal forward. And the more you can do that, the more that you can align your processes to not just help you with forecast, but actually add value to your sellers and the way you add value to your sellers, by helping them close the deal bigger, faster, the better.

Sheena Badani: So tell us Diego what's next for forecasting for LiveRamp? What are some of your aspirations and goals?

Diego: We can always do better. So we are continuously improving and we can have this race with AI tools of at the beginning of the quarter, who called it better. But in terms of what's next, I think we keep making it easier for sellers. So the less of a handicap that like our tools and things can be the better but then also continuing to push it down. So it's not just a sales leadership exercise, but hopefully something that every rep does on their own and can almost plan out their fiscal year. Hey, here's my pipeline. Here's my big deals. Here's what I expect. Q1, Q2 Q3. So that will happen. And just empowering them to do that.

Sheena Badani: Sales leaders agree that accurate forecasting can be easier said than done, but how many sales teams are actually getting it right? Here's a glimpse less than 20% of sales orgs have forecast accuracy of 75% or greater. These stats come from the Miller Hyman group. This inaccuracy and certainty leaves the majority of sales orgs grappling for direction and finding ourselves back at the drawing board when we realize our prediction for the quarter are far from reality. Let's jump back to our conversation with Diego to learn how you can increase your forecasting accuracy.

Devin Reed: Diego, what advice do you have for sales leaders trying to increase their forecast accuracy for next year? Maybe what's the first thing that they should start to look for start, and maybe not analysis as phase as they start to plan for next year?

Diego: It took us a while to get it right at LiveRamp. But when we finally did, it was a game changer. Start by really nailing down that playbook. So independent of your forecasting, independent of your sales tools, just really write down what that sales cycle playbook looks like and what are the gives and gets and what are the key milestones during the sales cycles for your product and your buying process. And again, doing it from the perspective of the buyer is preferable. I would start there and hopefully once you have that, that's not only a great tool for your sellers. It's a great tool for onboarding. It'll decrease new hire onboarding by quite a bit and increased productivity. You'll get time to booking from start date to first booking will be shorter. I can't say enough about encouraging to get your playbook on paper. And once you have that, translate it to, what you would call forecasting or pipeline management? How do you translate that to your sales stages and how do you capture that data and then really train sales managers to use it. That was also inaudible for us when we really started focusing on frontline managers, understanding the playbook on the forecasting process.

Devin Reed: Got to rely on that playbook. And I like how you're saying start with those buyer signals, right? Red lines infosec, all those good things. I'm going to shift gears a little bit here because you had said something a little while ago about, Hey, is if someone going to sign... Are they going to be on vacation? In my opinion, the best reason to be out of office is if you're on maternity or paternity leave and in prepping for this, I did some research on you and came across your passion that you have for paternity leave and the gender gap. So can you tell us a little bit more about your paternity experience and how it's impacted the way you view this topic?

Diego: Yeah. Thanks for asking and bringing it up. I think it's a very important topic and especially for sale, where usually you eat what you kill thing. So if you're out, you're not killing and what are you going to eat. Gender parity is a very top of mind for me. But more than that, just this idea of belonging and at LiveRamp, we're investing quite a bit on diversity inclusion and belonging is the operating word and where we end up, because we will all be our best. If we feel we show up at a company where we belong, where we can be our true selves and there's many different facets to that, but something that... I'm big on family, I have three beautiful kids. My life is really... I love working at LiveRamp. But I love being with my family. But they're not separate. And especially over the last couple years where I'm talking to you from my home today. So how do you balance that? And I have three kids, I took different types of parental leave with these three and I'd say I got better and better, but something I noticed. And I didn't like is that, for men it's usually optional, right? Oh, I have this big deal coming up. And so I don't care when the baby's born, I'll close the deal and then I'll take my time off. And if I need to come back, I can, and then I was, wait a minute. But for women, it's not an option. If you're giving birth, it's not like you can say, Hey baby, wait to close that deal. And then I'll go on maternity leave. And, it just creates a lot of disparity. And I know that everything from, once you find out you're pregnant, can I tell my boss or not, am I going to not get a promotion because I'm taking time off. It felt to me that mothers carried a lot more of that weight than fathers. And I think one way that we can improve that is by having solid parental leave for all parents and then really encouraging everybody to take it because it just becomes the norm. We started in this journey with LiveRamp, I think with my third was born. So that's about a little over three years ago, I worked with our HR team. I was, we really need to write this down on paper and come up with a policy that works and that works for sellers. And it's not if you're in parental, you're not going to get commission. So we started this journey about three years ago, a little over three years ago, and I'm really proud of where we've come. And I think it's become part of our culture that you have a baby, you take time off and you be with your family and what a gift. So thanks for asking very proud of the work we've done there. We've thought through all the way to the tactical and even to, how do you pay commission? How make it fair and how do you make it really available for folks to be able to take the time off? I think it's important to narrow that gap that exists between genders in the workplace today.

Sheena Badani: Thanks for sharing that. Diego, are you able to elaborate a bit on the commission piece specifically and how you handle that during parental leave?

Diego: Yeah, at the big beginning, we're, okay, you can take time off, but so we'll cover your deals. So you'll have to split it. And I was, that doesn't sound fair because I worked in our sales cycles nine months long. And so I could have worked this deal eight months and two weeks. And then I have to go on parental leave. And so I've lost half of my commission. And for most sellers, the variable component of their plan is a very important part of their plan. So it almost make it like that parental leave is just not an option because I'm not going to take it. We've had different versions of the plan, but it's a flavor of you get paid fairly for your deals. And to the extent that others will step in and help, we have a system to guide and say, somebody will help and it's just, you just help because part of the team, or eventually do come up to splitting the deal. Managers step in and help quite a bit. There's no perfect way of doing it, but there's better ways of doing it than just forcing people to basically not take the leave or not want to take the leave.

Sheena Badani: Well, Diego, the conversation has been amazing so far. We have learned a ton before we wrap. We're going to ask you one question that we like to ask all of our guests, which is how would you describe sales in one word?

Diego: Results.

Devin Reed: Fantastic. Diego, thank you so much for hanging out with us and sharing everything you know about forecasting and paternity leave. It's a nice little bonus, little sprinkle bonus content in there. So we're grateful. It's fantastic to meet you.

Sheena Badani: Every week. We bring you a micro action. Something to think about, or an action you can put into play today. Diego has shared the importance of customer actions to making accurate forecasts. If you want helpful forecasts, you need to know what your customers are doing and how those actions relate back to current deals. So if you only do one thing after hearing this conversation, do this, make sure you understand your sales cycle. To understand your sales cycle, you really have to know your customer, how they experience your solution and their buying journey. Find out what the customer needs from you at each phase of their journey. At the discovery phase, what information does your customer need at the proposal phase, what are your customers requirements and what does success really look like for your customer? As you pinpoint these inflection points in the customer journey, you'll be able to forecast more accurately and you'll be able to provide customers with what they need along the way.

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