How to look at your Renewals target the same way a Sales Leader would

How to Look at Your Renewals Target Like a Sales Leader

Sales people and sales leaders are taught from day 1 how to run at a target. It’s engrained in them from the minute they’re given a quota and from their first forecast meeting right through to the enablement they receive. 

They know how to break down a target into manageable chunks and then how to make a plan to go hunt down that number bit by bit, chunk by chunk. 

Luckily for me, I’ve grown up in my career alongside some incredible sales leaders and I’ve had a lot of first hand experience seeing this done and done well. 

So now I apply that exact same approach to my renewals business and here’s how I do it…

Find your Revenue Gap

First, I calculate the difference between my forecast for this financial year and my target. This is my "Revenue Gap" and I make sure I know it in $ not %, so I know exactly what I have to find.

Finding 5% GRR across thousands of renewals with different ARR is not easy. Finding $500k is much easier. 

Next, how do I plug the gap?

So I’ve got $500k to find, or whatever your gap might be. Where do I go to find that? What are the levers I should pull, the accounts I should look to save and the $ that would get me towards that $500k. 

I look at this in 2 ways:

Renewing ARR with a red health score

• How much sits in Q3/Q4 vs the first half of the year? Because I have a longer time to influence it.

• What % of this red ARR sits in different segments, geographies or CS tiers? Have I got my CS resource balanced in the right way for next year?

• Which are my highest ARR red accounts that I think we can turn around?

Renewing ARR with a green health score

• Could I renew this bucket at a higher % than the forecast? E.g. 100% vs 80% or 90%

• What strategies can I arm the team with to do that?

From each of the above I calculate how much closer executing on these things get me to target and make a plan for the year with the team.

But this whole strategy relies entirely on knowing exactly where your risk is for the whole year and how that translates into a forecast.

The only way to hit a target, in my opinion, is to have a plan.