No crystal ball here! Forecast renewals with data.

Previously: I covered metrics that matter in Data, Data Everywhere, But Stop Measuring Everything: My Musings on CS Metrics.

TLDR: CS doesn’t have to own renewals right off the bat. Be meticulous and create discipline in the team to help wrangle the portfolio.

• Delay Owning Renewals: We hired our first CSMs because of their domain and technical knowledge. You don’t have to own renewals immediately. Sales can continue to play that role while you focus on deepening the product adoption with customers.
• Be Meticulous: If you don’t have a centralized place to pull all your customer data into a single view, learn to be meticulous to the point you’re annoying everyone. Compile everything in a Google Sheet and go line by line. And I seriously mean line by line. Write notes and action items. Know every customer status. Have a checklist of items to run through for every single account. Do this at least once a month. Let nothing fall through the cracks.

Now, for the meat of the story:

Starting in late summer and early fall 2022, it became clear that our team was going to own renewals. Up until that point, renewals had been owned by our Sales team.

This was a strategic decision from our CEO. He wanted CSMs to be strictly aligned as thought-partners with our customers. We wanted to preserve the partnership relationship so we could gather more product feedback and use cases, while keeping the commercial discussion separate.

Looking back, this was a great decision for the CS team. We were able to work with customers in a more direct way and provide strategic guidance not directly tied to event volume usage.

For some reason, this proved to be a pretty unorthodox approach. Whenever I spoke with other leads, they were surprised we didn’t own anything. Most folks owned renewals and potentially upsells.

I’m totally fine with the unconventional, and this worked for us. This goes back to my post on hiring. I’d recommend that your early hires have domain knowledge and expertise because they will be much more credible and helpful to your customers.

Even though we didn’t own renewals, we did start the forecasting practice early on. I was pulling data out of Salesforce into a Google Sheet, and meeting with account teams on a monthly basis to go line by line through each account. Here’s how I did it:

• I’d export a full customer report from Salesforce into Google Sheets, that included ARR, contract signed date, and contracted event volume.
• We’d have the product admin dashboard open in another tab, and the Snowflake dashboard for usage data in another.
• We’d discuss their technical implementation and look at data usage trends.
• We’d look for gaps in their setup and develop questions to dig at their business use cases.
• We’d agree on concrete next steps, and give timelines and dates for that outreach.

Again, we were doing all of this just in Google Sheets with an output from Salesforce, and a view in our admin dashboard and Snowflake. It was tedious, but it worked well.

We were able to flag some risky accounts to the AEs and start proactive intervention before the renewal came up. We also were able to incorporate the customer sentiment into the reviews and get a more holistic view of the customer base.

RudderStack eventually brought on a CRO in late 2022 and it became clear it was time for CS to transition into owning renewals (sales maintained any upsells). We officially handed over renewals starting in January 2023, with a 3 month transition period.

Forecasting became a more rigorous process for us. We moved our forecasting into Clari, which the sales team was using. The tool has been fine to use, and lets us project a worst / most-likely / and best case scenario. We also did several training sessions and created support channels for the CSMs (who for the most part had not negotiated contracts or dealt with Salesforce):

• Negotiations: We had one of the Sales Managers talk about different value points, common objections, and talks tracks that work with customers.
• SFDC: We had our Rev Ops team member go through (and record) sessions on how to fill out order forms and submit contracts.
• Slack Channel: We opened a slack channel with our Sales leadership to get real-time advice on any objections or issues customers were raising. They were also willing to get on calls and role play discussions with CSMs whenever needed.

The biggest transition for us was trying to get ahead of the current quarter. We has transitioned to TAM-only support on our smaller tier customers, so the CSMs didn’t know the status of most of those customers. Initially, our forecast for that tier was based on utilization rates. The CSMs also didn’t have existing relationships with some of those customers, so outreach and introductions was time consuming.

Initially we came in with very pessimistic estimates for churn. If a slack channel was quiet and someone had utilization less than 20% of contract, we assumed they’d be churning until we actually spoke with them.

We made a concerted effort to have CSMs proactively start reaching out to accounts over 6 months ahead of the renewal, which we accomplished over the first 4–5 months of the year. Now we’re in a place where we are comfortably forecasting churn 6 months out, and have an eye on large accounts beyond the 6 months.

Tactically, I set up a bi-weekly forecast meeting for the whole CSM team where we went through upcoming renewals one by one. I use Clari religiously and have the CSMs record the next steps for each account.

This not only gives me visibility into what’s going on with each account, but it forces the CSMs to put dates and clear actions next to each account. I also have individual bi-weekly meetings with each CSM to discuss strategies for upcoming large or worrisome renewals.

I have found that meetings, working meticulously through line items 1:1 and directly asking people for their input not only holds people accountable, it helps them put some structure around how they’re approaching their work. It also prevents smaller accounts from falling through the cracks. I’m a big fan of this approach and did the exact same thing when we first introduced ticketing to the TAM team. The discipline is what got us to a more comfortable place now half way through the year.

Additionally, we’ve started training our TAMs on how to reach out to low volume and low engagement customers to help identify use cases.

I have met with the TAMs bi-weekly to pick one customer and work on assessing the implementation and working on talking points. CSMs also meet with TAMs individually and do the same kind of coaching. It’s been really helpful in teaching the TAMs to understand more about the stakeholder interests, and it helps the CSMs walk into a warmer relationship with usage on the upswing.

The only reason we’re able to develop this kind of rigor on our portfolio is because we have an incredibly robust product adoption metric and unified customer table that lets us pinpoint problem customers early. Make sure to stick around for this one, it’s going to be really good.