Transcript

Forecasts allow your teams to predict retention, upsell, downgrade, and churn for current and future time periods. In this video, you’ll learn how Totango classifies renewable accounts, where to set forecasts and suggested uses for taking action, best practices for keeping forecasts up-to-date, and how to set company goals.

Team members are encouraged to regularly set and update forecasts for their renewable accounts. If you fail to set a forecast once the time period ends, the forecast will not be available historically. Let’s look at our current time period, March. Of our paying accounts, Totango classifies 4 of them as “renewable” for this time period.

“Renewable” accounts have two requirements: A contract start date (or create date if used), that is prior to the current period. And, have a contract renewal date within the current period. If a NEW account gets added during the current period, it would not count as renewable for this time period.

Individually, you can set or update a forecast from the account profile. In this example, we’ve already applied a forecast state, but we could update it if something were to change before the forecast period ends. These forecast attributes are also available to update via a segment or integration. Within Revenue Center, we can update forecasts in bulk and see predicted totals in real time.

Here, we have an account that doesn’t have a forecast yet. The suggested forecast column is a system-suggested forecast based on account activity in the last 14 days, but team members with a pulse on the account will know best.

A forecast represents one of the following states:

• Upsell: Increase in contract value
• Renewal: No change to contract value
• Downgrade: Decrease in contract valu
• Churn: Contract value expected to be zero.

For example, we previously forecasted an upsell for this account. If we happen to get another opportunity for even more upsell, or if our forecast changes, we can adjust the dollar amount to reflect the total forecasted contract value. At any time before the time period ends, we can modify our forecasts. For this account, let’s imagine that today we recently learned that not only are they planning to downgrade, but the entire account may churn. We can update the forecast accordingly.

Setting a forecast helps your team predict opportunities (upsell) and risk (downgrade + churn) so that you can rally your efforts in the areas that matter most, such as creating a SuccessPlay for the accounts at risk.

The Breakdowns tab is another area you can use to identify outliers, either by forecasted or to-date values. These breakdowns are only available for current and future time periods.

When a renewable account is missing a forecast for the current or future time period you’re viewing, Revenue Center displays a notification banner and a notification counter above the Forecast icon at the top of the Revenue Center and on the account profile. Be sure your teams get into the habit of updating forecasts before the time period ends. In ARR models, the forecast state for the renewable accounts within past time periods is available to view historically, but the system re-sets the state automatically so that you can forecast it again for the next renewal period in the future, assuming you actively maintain your contract renewal dates.

Another forecasting tool in Revenue Center is the Company Goal. A goal represents a commitment for the overall company, which you can use to compare forecasted or actual values with expected results. For example, if we look at our current month, we can set goals for upsell ARR and Lost ARR. As you can see, we are forecasted to exceed expectations for our company upsell goal, but we are projecting MORE lost ARR from downgrade and churn than what the goal is.

As activity happens during this time period, we will see our “to-date” values update as they compare to the goal. If any of our accounts–even if not part of our list of “renewables”--has a change in contract value or paying status during this time period, we’ll see the “to-date” values change.

For example, Sitwell Industries–who isn’t renewing for another few months–just completed a change order for more licenses, so we’ve increased their contract value. We can immediately see that upsell amount reflected in Revenue Center. Goals can be set and adjusted for any time period by a global admin, and they apply to all teams. It’s recommended to add a goal during or before the time period you’re forecasting–as well as a few time periods out into the future–to help your teams consider goal attainment as they forecast.

In the next video, we’ll look at how to analyze results and validate your data.