By | 2019-06-26T11:34:26-04:00 June 26th, 2019|Agile Customer Success|Comments Off on Forecasting


Accurate forecasting is vital in a recurring revenue business because it informs budgeting, staffing, strategy, and even roadmapping. Relying upon your gut or incomplete or faulty data to forecast revenue can result in disconnections in priorities and performance (which can have adverse effects upon customer experiences). In turn, poor forecasting, can ultimately result in increased attrition and diminished returns.


Customer Success leaders (Directors, VPs, etc.) are often ultimately responsible for understanding customer data and experiences and being able to properly forecast retention, growth and revenue streams. They should work in collaboration with their CSMs to garner the right information that will provide accurate forecasting to the rest of the leadership team.


Forecasting is an ongoing exercise. It should start once a deal is closed and continue throughout the lifecycle. In other words, always be thinking about renewal likelihood and delivering value to ensure renewals and expansions so that you are not surprised by a customer’s decision to churn.


Accurate forecasting is a science that requires an agile approach. Just as customer adoption evolves over time, so does their likelihood to churn, renew or expand. Here are a few guidelines for forecasting:

  1. You can never be too early to begin forecasting. Know your customer’s renewal date from Day 1, and always have your sights on that renewal. Customers renewal plans must be implicitly part of every interaction you have with them. Even though they don’t need to hear you discussing renewal from Day 1, you need to be thinking about it all the time, and making adjustments along the way.
  1. A.B.F. (Always Be Forecasting). Good forecasting is both agile and ongoing. The truth is that reasons for purchase and desired outcomes shift over time. Perhaps your customer bought for one set of reasons, and goals have changed, or perhaps the organization itself has changed. To accurately forecast any revenue streams, you must know why your customer is using (or not using) your solution on an ongoing basis.
  1. Know the BIG PICTURE of the account. Customer relationships are complex. Resist the temptation to be single-threaded in any account. Your customer’s entire experience with your organization plays into its decision to renew or not. It’s not just your primary users who dictate whether or not the account will renew. Nor is it solely the executive team that’s calculating their ROI that will make the decision. Renewal and expansion decisions hinge upon more than usage and adoption. They involve multi-faceted experiences, data, and personas. Little things like surveying all users and executives and making sure to have intentional touch-points with each stakeholder is critical in gauging the likelihood of renewal (and growth). Note: a platform that provides complete visibility into the account from every vantage point of the customer experience is vital to being able to get this big picture.)
  1. Know when and how to escalate. Have an escalation plan that’s based upon certain predetermined signals that an account’s future is at risk. Premature escalation can result in confusion or distrust from your customer. Delayed escalation may be perceived as you not caring about the account. Multi-threaded relationships are vital to a meaningful escalation. Leadership has to know one another in order to have impactful and trusting conversations with one another. Otherwise, escalations appear desperate and disjointed from the primary relationships.
  1. Consider a “formula” for forecasting, but don’t rely exclusively upon that formula.  A formula for forecasting may include data around how much your customer is experiencing a particular benefit from your solution and how much effort they have to put into deriving that benefit. Or, perhaps you may calculate an Account Behavior Formula which is based upon a “quality of relationship” score and an “ROI” score. These values must be clearly defined, and you’ll need a system for deriving the data. Whatever formula you use to quantify the likelihood of a customer renewing, don’t rely exclusively upon that for accurate forecasting.
  1. Refine the language and approach you use to ask your customers about their level of commitment and intentions to renew. Most people do not want to be constantly asked if they’re happy or if they intend to stick around. Finding the right language to use at the right time is an important part of forecasting. You could implement a simple survey at specific points within the lifecycle that asks, “Are you receiving the value you expected when you purchased? If not, why not?” Or, maybe as part of each retrospective, you wrap up with a quick NPS survey? Consider setting this expectation with your customers early on so they aren’t surprised or annoyed by being asked for their participation in these brief surveys.


When done accurately, forecasting is the magnifying glass for strategic planning. On the flip side, poor forecasting can result in misaligned resourcing and failed process improvements. While there are nuances to forecasting that are unique to different businesses, the fundamental tenets—being agile, conducting pulse checks throughout the lifecycle, and analyzing engagement, experience, usage and sentiment data to inform your forecasts— are universal.

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