Mastering Renewal Forecasting: Strategies for Sustainable Growth

To be competitive in today’s business landscape, renewals must be the backbone of your company’s sustainable growth plans. Join Lucas Lam, Director of Product & Solutions at BoostUp, and Nicholas Gollop, VP of Revenue Operations at CloudCall, as they share how to master the art of renewals forecasting.

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“The concept of forecasting is exactly the same between new business and renewals. What changes is the methodology and the way you go about it.” - Nicholas Gollop

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Today, companies can’t just rely on a new business pipeline to reach their sales targets and goals. Renewals and renewal forecasting must come to the forefront for sustainable growth. But don’t worry, in many ways, renewal forecasting is the same as sales forecasting, you just need to make a few changes to your processes.

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Setting up your renewal opportunity record

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“In the same way we have a pipeline management process, we need a renewal pipeline process.” - Lucas Lam

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Renewal managers are tasked with ensuring that the revenue secured in the previous contract rolls forward into another annual or multi-year agreement, ideally with additional spend. To streamline this process, your RevOps team should automate the creation of renewal opportunities in your CRM. 

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Here are 3 buckets of values that must be included in any new renewal opportunity: 

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1. Amounts: The prior amount based on the existing contract, the forecasted renewal amount, which includes the prior amount and any additional spend, and the growth amount, which is the additional spend on its own.
2. Dates: The current contract end date based on existing contract terms, the expected close date, and whether the renewal is expected to be on time or not. 
3. Stages: The renewal stage and the renewal forecast category, which are the same as those used by the sales team, ensuring consistent forecasting.

While new business and renewal opportunities have a lot in common and follow many of the same processes, there are additional attributes that must be considered from the renewal and customer management perspective, including: 

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• Engagement score (customer communication)
• Health score (product success)
• Next steps + MEDPIC (account strategy)
• Products & Quotes (contract data)

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Use AI to improve your renewal forecasting

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“At a certain point in your company’s growth, you’ll have brought in the majority of your customer base. You’ll need to retain and grow them.” -  Lucas Lam 

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Take advantage of AI as a way to provide extra confidence in your renewal forecasting. You can triangulate analytics from your reporting engines, quantitative input from reps, and AI insights to proactively identify and mitigate risk. 

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AI can influence 3 components of forecasting to help you improve renewal rigor and deal discipline: 

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1. Process and automation: Create the right renewal processes and opportunity workflows to help you deploy deal management and renewal pipeline inspection as part of your forecast process. 
2. Business intelligence analytics: Create a renewal management dashboard to help you benchmark and measure renewal performance on-demand. 
3. AI insights: Apply AI to help track renewal health and pacing so you can proactively mitigate renewal risks ahead of time. 

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Improved retention leads to improved growth

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“When you really understand how retention is persisting in your customer base, it feeds back into sales and marketing for your new business pipeline in a much more healthy way.” - Lucas Lam

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Auto-populating your renewals right after an initial sale closes is a great way to capture the quantitative side of your renewals business. But ultimately, historical numbers can only give you a ballpark idea of where you will land. You’ll also need to rely on qualitative input, like health and engagement scores, to understand the full picture. 

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