Every CS leader should forecast annually

Most Customer Success and Renewals leaders will be accustomed to forecasting each quarter. It’s a standard practice in any revenue business.

But not many are forecasting for the full year ahead. 

The miss here is that you’re always reactive if you can only see one quarter out. How do I know which plans or plays to put in place now, if I can’t see what I’m up against 6 months out? This is how we get trapped in really reactive customer success and renewals businesses. 

Best in class CS teams forecast for a full financial year because it allows them to game plan exactly how they’ll hit their target. 

Here's how I see the difference between a quarterly and an annual retention/renewals forecast...

Quarterly forecast

• Usually built for current and next quarter

• A bottom's up view based on how your team have forecasted each renewal (because you should be speaking to each customer about renewal at least 120 days out)

• Correlate the team forecast with data: why is this called at 100% retention but it's health score is red?

Annual forecast

• Built once a year and reviewed quarterly

• A top down view based on data (apply a renewal % to each health score to get this) to see how far away from your financial plan you are

• Only works if you can trust the accuracy of your health score

Building an annual forecast is easy, if you’ve got a health score you can trust. 

Check out Hook’s guide to building a data-driven health score for more info.