Kyle Coleman recently joined the Sales Tech Deep Dive series to discuss revenue technology industry trends, Clari's product strategy, the growing role of RevOps, AI for sales teams, and more. Check out the full video interview and transcript. Here are the panelists:

• Kyle Coleman, CMO at Clari
• David Dulany, Founder and CEO at Tenbound
• Nicolas de Kouchkovsky, CMO at CaCube Consulting

David: Hello, hello, hello, everybody. Welcome to the Sales Tech Deep Dive. I'm joined today by my esteemed colleagues and partners in crime, Nicholas and Kyle with Clari. How you doing today, guys?

Kyle: Living the dream, as always.

Nicolas: Great to be here.

David: We've seen a lot of consolidation happening in the sales technology space, and they're starting to be the emergent players. Nicholas has some some nicknames them. Craig Rosenberg calls them the "alpha platforms" that are forming, and we want to get Clari's take on this situation and and really dive in and give people an understanding about how you guys think about this solution. Kyle, if you look at how the sales technology space is evolving, let's take it all the way back to the beginning. Why was Clari initially started and what problem was being solved at the beginning?

Kyle: It's a great question, David. I'm glad you asked, because it's important to start at the beginning, and the beginning for Clari was maybe about 10 or so years ago, which I think coincides with a lot of the rise of rev tech. I think that was maybe 10 or 15 years ago when things really started to to take off. Not to the extent of where they are today, but I think that was kind of a founding time for a lot of these companies.

Clari's main mission when we started was to solve the biggest pain point for every head of sales, every Chief Revenue Officer, every single person who is running the revenue process, which was: "Are we going to hit our number? We're running this crazy bottoms-up forecasting process and you have to bounce between spreadsheets and BI tools and your CRM and it's just a mess." It was as inefficient as it was ineffective and revenue leaders were just banging their heads against the table saying, "There's got to be a better way."

And that's the main use case that Clari helps solve. Initially, not just forecasting—that was definitely a component of it, but in order to get this kind of revenue precision where you know where you're going to land with conviction, you have to have a good bottoms-up forecasting process, but you also need really good retrospective analytics. You need predictive analytics based on machine learning and AI, and you need a single platform that allows sellers to run a governed methodology and manage their deals—hopefully more similar than different, in a way that doesn't require them to open a thousand different Salesforce tabs and get lost in between deal updates.

That's what Clari provided from the jump was all of these capabilities, really focused on what at the time we called this "magic triangle" of reps, managers, and execs, and trying to fill in all of the various use cases that we needed so that those folks could achieve that revenue precision month after month, quarter after quarter.

Nicolas: So I think one one aspect which was unique, and still is by some extent, is the workflow approach to running revenue. Can you elaborate a little bit on that?

Kyle: Sure thing. The kind of the broader headline here, Nicholas, is that a lot of companies thought of, and in many cases still think of, Revenue as just an outcome that happens at the end of the quarter. It's a number, it's a metric that you report on. The way that Clari has thought about revenue for 10 years now is that it's a business process, and not just any business process—it's the most important business process. If you're not running Revenue like a process, you're not going to be in business for too much longer.

So, what does that mean? What does it mean for something to be a business process? It means that there are component parts that can be broken down, inspected, and optimized. And each of those component parts of the revenue process are workflows. Some of those workflows are internal, that are managed by reps—a rep and a manager 1:1, that's a really important workflow. Some of them are a bit more complicated, like that bottoms-up forecasting process that we talked about. Some are external, like buyer-seller collaboration and mutual action plans.

But if you can identify and run all of these individual workflows internally and externally and make sure that you're doing it in a standardized, governed way, this is how you can treat revenue like a process and make sure that you are achieving consistent, predictable outcomes at the end of the quarter.

Nicolas: You have a another concept that I always find fascinating—this "Three-Headed Hydra."

Kyle: Yeah! The Three-Headed Hydra. A lot of those workflows that I just talked about and I alluded to—prior to Clari or for companies that don't have Clari, they're trying to run a lot of these workflows in point solutions or in the CRM system or spreadsheets or places that frankly just weren't purpose-built to run those workflows end to end.

The Three-Headed Hydra that we talk a lot about is business intelligence systems, CRM, and spreadsheets. It's that monster that operations teams and sales leaders just get totally lost in and frustrated by and it's the main enemy that we're trying to replace.

We're saying that there has to be a better way—if you have a purpose-built solution to run revenue and to run these workflows, you don't need to get lost in those spreadsheets, lost in CRM, bouncing between BI tools that you have no idea how to use, and that's what Clari is trying to solve.

David: That initial value proposition—is that what really resonated with buyers or was there a pivot or something different that ended up saying this is really taking off?

Kyle: Initially, in the earlier years at Clari, the value prop that I just talked through was one that was really resonating. I mentioned before that "magic triangle" of reps, managers, and leaders—all mostly on the new logo side, frankly—that were focusing on using Clari and the shorthand that they had was, "We rely on Clari for forecasting." And, as I mentioned, by forecasting, they really meant broader than that. It's not just the roll-up—it's also the analytical understanding of the business.

But as time has gone by, we started to see more and more different personas across the revenue org starting to use Clari in ways that we didn't really design it for. And we were happy to see and so the most logical thing that we saw was post-sales personas, whether that's an account manager or a customer success manager, starting to use Clari on the renewal and expansion side the same way that individual account executives and reps and managers use Clari on the new logo side.

So adding as much rigor to churn forecasting as you have on the new logo side—every company should assign itself a churn budget every quarter and work toward that budget the same way you're working toward new logo acquisition. We started to see companies inventing new use cases and we thought to ourselves, "Man, this concept of a revenue process, it affects the entire company. Not just quota carriers."

Over half of the company is revenue-critical—from finance, from marketing, from product, from engineering. They started to log into Clari so that they could see. Let's just use product as a non-traditional example. I want to go into Clari, I want to look at pipeline, I want to look at the funnel by product line so that I can see. I'm not just a product manager, I'm a general manager of my business, and revenue matters just as much as shipping features.

So, we started to see this revenue-oriented mindset for so many different what we now call revenue-critical employees that are not just on the go-to-market side but across the entire business. That's the way that we've been trying to shift now as we think about our product strategy and our roadmap, our acquisition strategy, all of those things, is what can we do to deliver a more robust solution to all the various members of your company that care about revenue.

Nicolas: You mentioned acquisitions—you've done a few lately. You've acquired Groove and the market took note! Maybe you can walk us through the various acquisitions and how it expanded the product footprint.

Kyle: I mentioned that one of the founding principles of Clari was that we just have to make deal management easier. I think you two know, and every rep who's listening to this knows, that managing deals out of Salesforce is just a pain in the neck. So we made that process a lot easier by giving a really useful clean interface for reps to manage deals and we were doing what we do by talking to customers and understanding what they needed, and they said to us, "Boy, it'd be great if we could collaborate with our buyers the same way that we can collaborate internally."

We thought, "OK, very interesting." And we looked across the market, and we of course looked at our internal R&D team, and ultimately decided that acquisition is the right path here for mutual action plans and digital sales rooms. That was the first acquisition that we did—a company that was formerly known as DealPoint that we now call Clari Align. Everything that sellers need to collaborate with their buyers for in-flight deals, implementation, post-sales account management, all those types of things.

David: One quick comment is that I was actually one of the initial customers of DealPoint with Tom when he was first launching it and it really was useful for being able to understand throughout the deal cycle if we were delivering on our commitments to the customer.

Kyle: Prior to acquiring DealPoint, we were using spreadsheets for mutual action plans the same way that many companies do and of course what happens is they either don't get used or they get completely bastardized by the rep who has their own style or however they want to do things, and it becomes really hard to standardize. By having that technology in our software, it was night and day to see conversion rates improve and standardize win rates, start to improve all those types of things. Not to mention how much the buyers enjoy that experience.

The buyer needs to be shepherded along. A lot of sales reps expect the buyer to do a lot of work on their behalf, and to a certain extent you have to make that as easy for them as possible, and that's what these digital sales rooms can do, that's what these mutual action plans can do.

Moving into 2022, we acquired a company called Wingman, a conversation intelligence company now known as Clari Copilot. Why did we do that?

We looked across the landscape—again, this is mostly based on customer feedback. Pretty much everything we do from a product standpoint is based on customer feedback and what people want and what they're asking for. What we heard from them was, "Yeah, we have a call recording solution, but it sits outside of our workflow." It basically is, "We're paying a lot just to have a library of recorded calls." We thought to ourselves, "OK, how can we improve that experience?"

We understand that there's a lot of value in having that library of recorded calls, of course, but that value compounds significantly when those call recordings are surfaced in the workflows that reps, managers, execs have. When you're doing a 1:1 rep/manager and you're doing a deal inspection, the call recording from Copilot surfaces right there in Clari. When you're doing a forecast call and your CRO is asking about what's the real health of this deal, she can look right at the call recording, hear the snippet from the customer's mouth, and have a good sense of whether or not this deal is actually coming in this month.

Now, we have everything that you would expect from a call recording solution. But now what's really exciting is the way that this product suite is really integrating together so that all of these workflows—Clari Core plus, now, these mutual action plans plus all of these call recordings and conversational intelligence—seeing it all come together, it's amazing how much compounding value there is for all of the users.

David: There's conversations and there's intelligence and it's putting them together because if you've got a huge library of conversations but it's not necessarily in the workflow, then what's the value?

Nicolas: Workflow has been a theme so far. On this topic of workflows, I've heard you guys sometimes use the term "revenue cadence." Unpack that for us. We tend to think historically that "Clari equals forecasting," and we think of it as the job of revenue ops. What I like, which I think is very fresh, is first to look at this golden triangle—the reps, managers, and the execs—and to think of it as a workflow where its ramifications are beyond just the number.

Kyle: I'm glad you brought up the RevOps side of the house, Nicholas, because RevOps is so fascinating. First, it's the fastest growing job in America this year. Did you guys know that? Literally, according to CNBC. This is not Clari propaganda! According to CNBC, revenue operations is the number one fastest growing job. Faster than frontline healthcare workers, faster than truck drivers, faster than anything else.

Why? Why is that? Because RevOps is the strategic growth driver at all of these companies. They're the ones that are really facilitating the way that you can run revenue like a business process. Introduce, evaluate, integrate, administer—all of the technology that you need to make sure that your reps can do the things that they need to do at scale and unlock growth for the company.

We always are thinking about that RevOps persona as well because they're critical. It's not just a back-office role. When it's talked about that way, it's a complete disservice to the whole function. It really is the right-hand person of the CRO, and what's really interesting is that we've seen this trend in the last couple years where heads of RevOps are now becoming Chief Revenue Officers, whereas in the past, that path to C was really mostly through a VP of Sales-type persona. We're starting to see way more operations folks take on that role because they know the numbers, they know the analytics, they know the processes, and they can inspire a lot of confidence with the executive team, they can facilitate that kind of growth and predictability.

David: Let's fast-forward to a few weeks ago, maybe—barely a month—the latest acquisition. This one is breaking a little bit beyond the traditional market.

Kyle: Indeed. So, in mid-August, we acquired Groove. Groove is one of the leaders in sales engagement. You're likely familiar with some of the other players in the space: Outreach, SalesLoft, those types of companies. We started to evaluate Groove for many of the same reasons I mentioned before. We were interacting with a lot of customers and they said, "Gosh, we're getting so much value out of Clari—it would be amazing if we could take action right from Clari instead of having to hop over to our email client."</p

We had a partnership already with Groove, and we had a really nice API integration, but bringing these companies together—the vision of it, which is in-flight right now—we've shipped a handful of integrations, but the fuller platform integration is coming soon. The full vision is that we want to create this closed loop between the insights that you get from Clari and Clari's revenue database and all of the beautiful data that we have and are collecting from the various revenue applications that I talked about—all of the insight there, there needs to be a closed loop with the action that you can take.

What happens is—let's go back to one of the most common workflows. You're in a rep and manager 1:1. The rep and the manager are discussing a deal and they identify a handful of things to do. Do those things ever actually get done? Did you send that email to the CFO to engage them? Did you multi-thread with XYZ persona? Hopefully you did, but there's not a ton of governance or accountability that you actually get that done because it exists outside of the workflow. We have a vision where in rep/manager 1:1s, you're having this conversation where the insights are coming both from the people that are saying, "Here's what we think needs to happen," but also from the technology, Clari is saying, "Hey, there's deal risk here. And here's a suggested action for you to take." That insight is surfaced and then the action is taken immediately in the flow of work.

That closed loop between insight and action—that's what Groove allows us to do. It's not just about top-of-funnel prospecting—that's an important part, of course—but it's also about deal management, account management, customer relationships, all of those types of things, and to be able to execute all of that inside a single platform is really powerful for folks.

The next thing I'll say from a vision standpoint is that pipeline is a black box right now for most sales leaders. They invest a lot in it, they've got an army of SDRs that are meant to produce it. If you ask them how much pipeline are you going to create this quarter, they have no idea. And if they do know, they have no idea how it's going to get created.

So, the value of bringing Groove together with Clari, on top of what I just discussed with the workflows, is this analytical capability where Clari has all of the predictive machine learning and predictive AI that says, "Here's what's going to happen in the future," and now, instead of that prediction mostly being about opportunity to close, now it's going to be about pipeline creation. So, we have a single view where sales leaders are going to be able to see here's how much pipeline you're likely to create based on how many leads or accounts you have engaged in outbound flows, here is coverage against revenue, here's a potential gap, and here's an action you need to take. Add 200 new accounts to this flow, and you can take that action right there. So it's going to be this always-on cycle of insight and action getting closed in real time.

Nicolas: We went through all of the acquisitions. Can you portray what you call now the "Clari Revenue Platform?" Gartner has coined this term of "sales execution hub." I don't know if you relate to this concept, but give us the big-picture view of all of the pieces all together.

Kyle: It's a great question. We call ourselves the Revenue Platform—that's what a lot of our customers just refer to us as, and we said, "Yeah, that has a nice ring to it." It's general enough to be encompassing of all of the things we do but it's specific enough so that people kind of know what it is. So Clari is a Revenue Platform. I've used a lot of these phrases before, so forgive me for being repetitive, but it is a platform that really is purpose-built to run revenue. To execute all of those internal and external workflows for all revenue critical employees from the BDR to the boardroom.

We have individual BDRs that are using Clari day-to-day, we have board executives that are logging in and managing their companies inside of Clari, and everything in between. That, for us, is what a true Revenue Platform delivers—that kind of value, and it's not just a box-checking exercise where we say, "Yeah, we have conversation intelligence, and yeah, we have sales engagement." There needs to be breadth of capabilities and a depth of capabilities as well.

So, as companies are thinking about consolidating, as companies are looking across their tech stack and saying, "We have a lot of point solutions!" they may want to consolidate, but they can't compromise on capabilities. What I've heard from a lot of operations people and sales leaders is they say, "We thought we were spending a lot on tech, so we pulled the plug on a handful of things and we broke our go-to-market system because we thought that we could get away with having a 50% solution from some other vendor and it just wasn't good enough."

So what we are really focused on is ensuring that we have depth across all of those key capabilities that I talked about—forecasting, RevOps, sales engagement, CI, mutual action plans, data capture—all of the things that revenue teams really need, all under one roof.

Nicolas: It's hard to have a discussion these days without asking a question about AI in general and generative AI, so now is the time. I'm pretty sure you know the drill, but tell us about Clari's AI strategy. It was at the at the very beginning of Clari—this entire concept of letting the machine build the forecast, but tell us a little bit about where AI plays and what a strategic investment you're making in that field.

Kyle: People are, rightly so, very wrapped up in generative AI. That's one flavor of AI, and there's a lot of other types of AI that are useful, especially in a platform like ours. Probably my favorite stories about this is we have a customer CFO who every quarter issues a challenge to all of her VPs of sales. Last I checked, there were six of them. She says, "If you can beat the Clari call this quarter, I owe you a bottle of wine. If you do not beat the Clari call this quarter, you owe me a bottle of wine." And consistently every quarter she's got six bottles of wine on her desk waiting for her.

It's that kind of AI that Clari was really founded on—like really being smart about your CRM history, looking at all of the data, building really comprehensive machine learning models in order to provide those predictive analytics that companies need.

If you're a private company, you need accountability, you need to be able to run your revenue process with precision and using Clari's AI forecast call as one of the data points. If you're a public company, my gosh the stakes are even higher, and we have this whole portfolio of public companies that are guiding the Street using and leveraging a lot of Clari's AI from a predictive standpoint. Of course, there's always a triangulation between human intelligence plus artificial intelligence. So predictive AI is something that we were founded on. It'll continue to be a major investment.

I mentioned in passing this revenue database that we have that's powering our entire platform. We're snapshotting every customer’s CRM every 15 minutes, building this unbelievable set of time series data that's powering a lot of the machine learning and AI models. No other company does this, so our predictive models are much more robust than anybody else's which is why they're more accurate.

AI and machine learning are all about the data set that you have—garbage in, garbage out—we do not have garbage data. We have comprehensiveness and therefore we have trustworthy results, so that's the predictive side.

Generative AI was a big part of the deal thesis with acquiring Wingman (now known as Clari Copilot). We needed that conversation data for NLP, we needed it for descriptive AI, and we needed it, obviously, for generative AI. So now we have this whole universe of millions of recorded calls that we can run all of these AI models against, and in March we launched our rev AI capabilities, which is smart meeting summaries, smart battlecard summaries, all of these different ways that, right in the platform, make rep's lives a lot easier and more productive.

That's just the tip of the iceberg of things that we're working on; we have a lot more coming down the pike.

David: You mentioned something interesting earlier. As you're gathering all of this information, then it comes back down to the relationship with the sales manager and the rep and how they're going through the results and talking about how to improve. You touched on a little bit using AI or the information to help the manager to improve the performance of their reps, so is that something that you're looking to develop?

Kyle: Always, David. We believe that collaboration between and among revenue-critical employees is essential. If you're not effectively collaborating, things fall off the rails pretty quickly. Reps don't get what they need or managers don't get what they need or people feel like they're growing apart and you're not running deals the same way from rep to rep, and that can cause other issues as well. There have to be ways to foster collaboration, powered by our technology.

Something that Nicholas mentioned earlier—this concept that we have of the revenue cadence. What is a revenue cadence? It's effectively a blueprint for how to run every day, every week, and every month of the quarter. You have to make sure that you have all of these revenue moments correctly cadenced out throughout the quarter so that nothing slips through the cracks.

We have a whole playbook, if you're interested in seeing it. You can just Google the Clari revenue cadence playbook and you can see how companies are thinking about different types of deal inspection, rep and manager 1:1s, pre-sales workflows, post-sales workflows, and everything in between. Then you can put together your own cadence based on the best practices that you see from many of our customers outlined in that playbook.

David: So how many customers do you have now?

Kyle: Somewhere near 1,600.

Nicolas: Wow. Going back—I'm glad you touch on the Revenue DB because it's a a key part of the differentiation. Are there other elements of your differentiation that we haven't touched yet?

Kyle: It depends on who we're differentiating against, Nicholas. A lot of the competition that we have, frankly, are status quo, as I mentioned before. It's companies that are in spreadsheets, BI tools, CRM. So we're doing everything we can to make sure that we understand what those workflows are, and we're providing purpose-built technology to run those workflows.

It's so funny; every time we demo to a revenue operations person or or a sales leader and we just show them, "Here's how we approach forecasting," their jaw drops like, "Oh my God, you just gave me my Sunday back."

I was actually just at dinner with one of the senior operations people at Palo Alto Networks—they've been a design partner of ours and a customer of ours for I think nine years now—and he's running a team across all of Europe. I think it was something like 2,600 reps. And he said that his forecasting—his bottoms-up forecast process—takes one hour. I asked him, "How long did it take you before Clari?" and he had almost a nervous breakdown. He said it took almost two weeks to do this kind of thing at a previous company before they had Clari.

We can talk more about the more literal RevTech competition if you'd like, but that's the main competition we come up against.

Nicolas: I'm starting to like you less because you're taking all of the fun out of this weekly series of meetings.

/laughter]

I'm just curious—at the at the top end of the funnel, you've got the marketing automation platforms that are feeding into the sales hub you're creating, and then you've got the CRM in the background which is sort of a file cabinet at this point. So, is there expansion potentially into either a CRM or even further up the funnel?

Kyle: We see a universe, potentially, where this Revenue Database that we have—our unified data layer—could potentially replace a CRM for some workflows. We haven't talked about CPQ, we haven't talked about territory management, we haven't talked about those types of things yet, and those are critical and many companies still run those out of CRM. Will we ever fully replace everything that a CRM can do? Probably not. There's a reason Salesforce is—what, $200 billion market cap?

Nicolas: When you run into a customer, in most cases, they're starting bite-size with elements, so what do you tell them in terms of rolling out this suite?

Kyle: It's something we're sort of wrestling with right now with the Groove acquisition being so fresh. The blessing in the curse of the extensibility of our platform is that there are a million different combinations of pathways and personas and ways to start a conversation or start an evaluation, and so the answer is, "It depends." It depends on what the customer needs, it depends on the personas that are engaged. We have deals that start with sales engagement and move into CI, we have deals that start with forecasting and move into sales engagement, and everything in between.

What we're trying to do is trying to be as empathetic as possible with what the buyers really need—where are the brightest burning fires in their revenue process and what can we help with most immediately. We're not necessarily always trying to just land with the largest possible ASP for Clari; we know that this is a journey, and we have to prove value in our technology and our partnership.

David: Is there anything that we haven't covered that you're excited about that's being developed?

Kyle: Two things. One is: I know many folks in your audience and many folks know me for more top-of-funnel-type things. We just launched the Clari Prospecting Academy, which is a free resource for anybody who wants it. You can just Google it—"Clari Prospecting Academy"—and it's led by me with six video courses on cold emailing, cold calling, account plans, video messaging, organization, SDR metrics, all those types of things.

On the product side, there is this really interesting move that many companies are making toward consumption-based revenue models so they're not necessarily charging for licenses the way that traditional SaaS companies are priced. They're charging for how much usage are you actually getting out of the company. Think about something like Uber for business, as an example. They'll sign an agreement with a large company that says, "You're going to pay us per ride that your employees take."

That's a totally different way of managing your revenue process, and that requires a completely different solution for revenue forecasting and analytics and all the rest. Launching sometime this quarter—we're in Alpha right now with a handful of customers. We will have a comprehensive solution to for that consumption- or usage-based revenue model. It's such a big pain point—I think something like five years ago, this revenue model existed at maybe 10% to 12% of companies. Fast forward to today, and it's something like 40 or 50% of companies have a usage-based revenue model, or are planning to in the next one to two years.

David: Is Clari mostly for large companies or do you sell downmarket as well?

Kyle: One of the other benefits of this acquisition path that we've been on is extending our use cases to be as valuable to small companies as they are to large companies. There's extensibility for super small companies, for Fortune 100 companies, and everybody in between.

David: What about industries? Mostly technology companies?

Kyle: Early on in Clari's life, yes, we were focused mostly on tech. Maybe in the last five or six years, we've seen a pretty significant shift into financial services, business services, professional services, healthcare, life sciences, those types of companies.

The acquisition of Groove opens up new avenues for us to go and explore because there's just so many use cases for sales engagement at more traditional industries.

David: Well, it looks like Nicholas will have to update his map at some point in the next year or two! Kyle, thank you so much for coming on and diving in.

Nicolas: Thank you so much for spending time with us and our viewers.

Kyle: It's been a pleasure, guys. Thanks again for having me.