Renewals are the lifeblood of any SaaS company

Renewals are the lifeblood of any SaaS company. All CS leaders live and breathe renewals. 

Yet, despite their importance, many Customer Success teams struggle to accurately forecast them. Too often, forecasts are based on gut feelings or outdated data rather than structured, reliable methods.

A robust Renewal Forecasting Framework helps CS leaders predict revenue more accurately, allocate resources effectively, and identify risks before they become churn statistics. In this article, we’ll walk through how to build a renewal forecasting framework that not only works but also scales as your team and customer base grow.

Why Is Renewal Forecasting So Challenging?

Forecasting renewals is inherently difficult because it relies on both quantitative data (like product usage and health scores) and qualitative insights (like customer sentiment and executive buy-in).

CSMs often face challenges like:

• Incomplete Data: Health scores that don’t fully reflect the account’s relationship health.

• Subjective Inputs: Forecasts based on CSM intuition rather than consistent metrics.

• Communication Silos: Information not flowing between Sales, Customer Success, and Account Management.

• Changing Stakeholders: New decision-makers can shift priorities unexpectedly.

A structured framework addresses these pain points by providing consistent criteria, clear processes, and scalable practices.

Step 1: Identify Key Metrics to Track

The first step in building a reliable forecasting framework is to establish the metrics that matter. While every company may vary, some universal metrics include:

1. Product Usage Metrics:

• Daily Active Users (DAU) / Monthly Active Users (MAU)

• Feature Adoption Rate

• Time Spent Using Key Features

2. Customer Health Score:

A composite score that includes factors like:

• Usage Trends

• Support Ticket Volume

• NPS/CSAT Scores

• Account Engagement (meetings, QBRs)

3. Financial Metrics:

• Contract Value: High-value contracts deserve more nuanced forecasting.

• Contract Length: Longer contracts tend to have higher renewal likelihood.

• Payment Terms: Prepaid vs. postpaid can indicate commitment levels.

4. Relationship Metrics:

• Executive Sponsorship: Presence of an executive champion within the account. Another great metric to track is how high up you have a real advocate, is it at the VP level, Director level, manager or other.

• Multi-Threading: The number of key stakeholders actively engaged.

• Customer Feedback Sentiment: Trends from surveys and support interactions.

Step 2: Build Your Renewal Forecasting Model

Now that you have your metrics, it’s time to build a forecasting model that assigns a Renewal Probability Score to each account.

1. Use a Weighted Scoring System:

Assign weights to your metrics based on their historical impact on renewals. For example:

• Product Usage (30%)

• Customer Health Score (30%)

• Financial Metrics (20%)

• Relationship Metrics (20%)

2. Define Scoring Tiers:

• High Probability (80-100%): Low churn risk, high product adoption, positive feedback.

• Moderate Probability (50-79%): Moderate usage, mixed feedback, some engagement gaps.

• Low Probability (<50%): Declining usage, negative sentiment, disengaged stakeholders.

3. Automate Data Collection:

Integrate your CRM and product analytics tools to pull data into your forecasting model. Use automated reports to refresh scores on a monthly or quarterly basis.

Step 3: Validate and Calibrate Your Model

Your initial model will likely need refinement. Here’s how to test and improve its accuracy:

• Backtesting: Compare predicted renewal rates with actual outcomes over the last year.

• CSM Feedback: Involve your team to identify discrepancies between forecasts and on-the-ground realities.

• Executive Review: Align your model with business objectives and get leadership buy-in.

• Continuous Iteration: Update your model as new data or trends emerge (e.g., new product features or pricing changes).

Step 4: Integrate Forecasting into Your CS Workflow

Building the model is only half the battle, you need your team to use it.

1. Train Your CSMs:

Educate your team on why renewal forecasting is crucial and how to input data accurately. Emphasize consistency and transparency in data collection.

2. Standardize Forecasting Cadence:

Decide whether forecasts will be updated monthly or quarterly. A consistent cadence helps track progress and course-correct proactively.

Meet weekly to review your renewals. Look at the whole picture, the current health, relationships, is this a commit or not and next steps to move the deal forward. 

3. Create a Reporting Dashboard:

Use visualization tools within your CRM or BI tools like Tableau or Power BI to create a dashboard that shows:

• Accounts by renewal probability

• Projected revenue retention

• Top accounts at risk

There are also many powerful Conversation Intelligence tools that can pull in your CRM data, Conversation Insights and email intelligence all into one view. Tools like Avoma and Gong can create great visibility into your renewals.

4. Make It Part of Your QBRs:

Include forecasted renewal likelihood in your quarterly business reviews to give customers visibility and encourage proactive conversations.

Step 5: Act on the Data

The ultimate goal of a renewal forecasting framework is actionable insights. Don’t just predict risk, mitigate it.

• Proactive Outreach: Set automated triggers when an account’s score drops.

• Strategic Interventions: Assign account escalation when the renewal probability falls below a set threshold.

• CSM Accountability: Incorporate forecast accuracy into performance metrics.

Renewal forecasting is not just about predicting churn, it’s about maximizing revenue predictability. An accurate, scalable forecasting framework positions your CS team as a strategic partner, not just a reactive problem solver.

With the right data, clear processes, and consistent execution, your team can not only forecast renewals but actively influence them, turning risk into opportunity.

Want more insights on implementing renewal forecasting in your team? Reach out or subscribe to our newsletter for the latest strategies.