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Hey {{first_name | CS Pro}},
Ever read out your churn number in a board meeting and watched everyone move straight on to the sales pipeline?
I have, and it stung.
This week's solo episode is about why that keeps happening, and it has nothing to do with how hard your team works. It comes down to the number you carried into the room. Let's talk about why churn is costing you credibility, and what to forecast instead.
But first, today’s sponsor
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Churn is a receipt, not a strategy
Reporting churn is like driving while staring in your rearview mirror. You are telling the board who already left, and by the time you read that number out loud, nobody can do anything about it. Meanwhile every other leader at that table is talking about the future. Sales forecasts pipeline, product walks through the roadmap, finance models what revenue looks like at year end. And then there is customer success, with a slide about money we already lost.
That is how we turn ourselves into a cost center. When you are the only voice looking backward, leadership sees you as the team that mops up messes, not the team driving growth.
Churn is misleading too.
You can post low logo churn and still be losing serious money if customers are downgrading, cutting seats, or shrinking contracts.
Boards do not lie awake worrying about who left last quarter. They lie awake wondering whether the revenue base will grow or shrink. That is a forecasting question, and a lot of us answer it with a history lesson.
Net revenue retention is the number the market watches
Investors are valuing SaaS businesses on NRR right now, and the best performers are posting 120% and higher. That means every dollar of revenue you started the year with becomes a dollar twenty by the end of it, from the same customers, without adding a single new logo.
Look at the subscriptions you pay for…
I have been a Netflix subscriber since 2008, back when you got three DVDs at a time. Since then they have added original shows, gaming, ad tiers, 4K and extra devices, and my household spends more with them every few years. Spotify is the same. I signed up for music, then podcasts arrived, then audiobooks, and because my plan only covers so many audiobook hours, I pay more when I travel.
None of these companies are only obsessed with new signups. They are obsessed with keeping you and growing you. B2C worked this out long ago, and B2B is still catching up.
Your growth is hiding inside your existing customer base.
Four moves that take you from reporting to forecasting
1⃣ Get crystal clear on how your company calculates NRR. I have worked at six companies and not one measured it the same way. Different start periods, some counting seat reduction, some counting cross sell, some not. Sit down with finance and do the math yourself.
Under 100% means your base is shrinking and you are leaning on sales just to stay flat.
2⃣ Stop reporting and start forecasting. Sort every account in your book into three buckets: likely to expand, likely to stay flat, and at risk of contracting or churning. Put a revenue number and a probability against each one, then roll it up.
It does not need to be a perfect financial model, just a number you can defend.
3⃣ Track leading indicators, not lagging ones. Usage trends, expansion signals, outcomes hit against the success plan, multiple stakeholders engaged, those tell you where revenue is heading before it moves.
Churn is the ultimate lagging indicator, and by the time it shows up, it is game over.
4⃣ Bring that forecast to the board with confidence. Here is my base case, here is the worst case, here is the upside if these three expansions land, and here is what my team is doing next quarter to move the number. That last part changes your identity in the room.
You are not reporting a loss, you are driving revenue.
Reporting churn is standing at your window describing yesterday's storm. Accurate, and completely useless. Your board wants the forecast for tomorrow.
This week's challenge
Take 10 accounts, not your whole book. Open a spreadsheet, list them down the side, and sort each into expand, flat, or contract for next quarter. Next to each, write the leading indicator that justifies your call. Not a feeling, a signal: usage is up, we lost a champion, they hit their first value milestone. Then add up what it means in revenue and write that number down. Congratulations, that is your first NRR forecast.
If you want to be an overachiever, bring it to your next meeting with your manager and lead with it.
Want your whole team forecasting like this? I run hands-on corporate workshops on forecasting, renewal reviews, and executive language at: thecustomersuccesspro.com/team-event.
Have a listen on Spotify, Apple Podcasts, or YouTube, and let me know what you think.
I hope you enjoyed this week’s newsletter.
If you have any questions or suggestions, please feel free to contact us.
Cheers to your CS success,
Anika
