Hey {{first_name | CS Pro}},

If your renewal forecast is mostly green, yellow and red, it's probably not as accurate as you think. A healthy customer is not automatically a customer who's going to renew.

This week's episode is a live panel I hosted on exactly this topic about 3 weeks ago for our live event in London, with Tash Evans from Hook, Alec Gillespie from Board Intelligence and Rob Zambito from Success Scaled. We got into where forecasts live, which signals actually predict renewals, and how to stop forecasting on gut feel. Here's what stuck with me most:

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Rob put it really simply:

A customer can be logging in, clicking all the right buttons and still walk out the door. Maybe a new CFO just started asking why you're on the bill. Maybe a competitor launched a discount campaign your CS team never heard about.

Rob calls these watermelon customers… green on the outside, red on the inside. 🍉

Tash made a fair point though. Some health scores are just someone's gut feel or a random weighting of logins, but a predictive health score built on real user behaviour is still a useful input. It just can't be the only one.

So what else goes in? Alec's leading churn reason at Board Intelligence is mergers and acquisitions, and his team has even managed to upsell into the company that acquired a client, because they got in early enough. The other big one is your key stakeholder leaving.

If you're relying on 1 champion, you're exposed. This is exactly what I work through with teams in my stakeholder mapping and multithreading workshop.

It's taken about 6 months, but Alec's team now lands within roughly 4% of their number when they forecast a month before the quarter starts. He's honest that forecasting further out is still a work in progress.

What changed? He got his CSMs to stop treating the renewal conversation as a tick box 3 to 4 months out. Every renewal, whether it's on a 12, 24 or 36 month cycle, is a deal with stages. That means discovery early and asking directly whether the customer plans to renew.

Tash's team builds this into HubSpot. Next to the health score, they track whether the customer has seen value, whether they have access to the economic buyer, whether there's a real champion, and whether they've asked about the renewal.

If a CSM calls a deal at 100% but hasn't spoken to the executive buyer, that gets challenged on the forecast call.

Rob added that the strongest teams he works with run 3 separate pipeline meetings: onboarding, renewals and upsells.

This is one I talk about with almost every team I train. When I was a CS leader, our Monday pipeline review was all about revenue. What was at risk, what was growing and what was stable, in dollars, not customer names.

Tash does the same. Every percentage her team forecasts gets turned into a dollar churn number, because finding 2% across 100 accounts is hard to picture, while finding a specific amount is something you can actually go after.

Alec goes a step further for future quarters. His team looks at historical patterns by segment to work out how much surprise churn usually pops up in quarter, then builds in a buffer. The first time they used it, it worked really well.

I coach teams on a good, better, best forecast for the same reason. Good is your baseline, better is if everyone beats target, and best is the quarter where you smash it.

If your team still isn't comfortable saying these numbers out loud, my forecasting renewals and upsells workshop is built for exactly that. You can book a call here to talk it through for your team.

I asked the panel for 1 forecasting habit you could start on Monday. Here's your challenge, pulled straight from their answers.

Take however far ahead you're forecasting now and push it out 1 more quarter, like Rob suggested. Then pick 1 renewal in that window and ask the question Alec swears by: are you seeing value for the reason you originally purchased the tool? Or try mine: what does the renewal process look like in your business?

At the end of the quarter, check how accurate you were. Rob says most teams never do.

That's it for this week! If you want to hear the full panel, including Rob's anti-sell question and Tash's tip on asking customers to rate you, have a listen on 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