If you’re still forecasting renewals and expansion based on lagging indicators, you’re flying blind.
Too many Customer Success teams rely on backward-looking metrics like NRR, GRR, and churn reports to tell them how they’re performing.
The problem? By the time those numbers hit the dashboard, the story’s already been written.
The deal is lost.
The customer’s disengaged.
The renewal’s already slipped.
The Problem with Backward-Looking Metrics
Metrics like NRR or Renewal Rate are critical, but they’re not predictive. They’re results, not inputs.
They tell you what happened, not what’s about to happen.
Imagine a sales leader trying to forecast next quarter’s revenue by only looking at closed-won deals from last quarter.
Absurd, right?
Yet, that’s exactly how most CS organizations operate.
We celebrate renewals after they happen, but we rarely have confidence in what’s coming next.
That’s why elite CS teams are shifting from reporting retention to forecasting retention, using forward-looking data to anticipate revenue outcomes before they’re locked in stone.
The Shift: From Retention Reporting → Revenue Forecasting
The best CS organizations treat forecasting the same way sales does. They build a forecast funnel, a structured view of upcoming renewals and expansion opportunities, categorized by probability and signal strength.
Instead of saying:
“We renewed 88% of accounts last quarter.”
They can say:
“We’re forecasting 92% renewal for next quarter with 5% at risk and 3% expansion upside, driven by engagement signals, exec alignment, and usage velocity.”
That’s the language revenue leaders understand.
Backward-Looking Metrics: What They Tell You
Metric | What It Shows | Why It’s Not Enough |
NRR (Net Revenue Retention) | Revenue growth or shrinkage across renewals & expansion | Only visible after renewals close |
GRR (Gross Revenue Retention) | Retention before expansion | Doesn’t predict upcoming risk |
Churn % | Lost ARR from churned accounts | Reactive and lagging |
CSAT/NPS | Customer sentiment snapshots | Often disconnected from business outcomes |
Forward-Looking Revenue Signals
Forecasting accuracy improves dramatically when CS leaders track revenue signals, leading indicators that correlate with future retention or expansion outcomes.
Here are the most powerful ones:
Category | Key Signals | Why It Matters |
Engagement Health | Logins, product usage velocity, seat utilization | Declining activity precedes churn; growth signals expansion |
Executive Alignment | Frequency of exec touchpoints, sponsor tenure | Losing exec visibility is a top churn predictor |
Outcome Progress | Progress toward success plan KPIs | If business outcomes aren’t being met, renewal confidence drops |
Financial Timing | Budget cycles, contract terms, fiscal year alignment | Anticipates timing of renewal discussions |
Sentiment Signals | Support tone, QBR feedback, stakeholder engagement | Adds qualitative texture to quantitative data |
When you layer these signals on top of your renewal pipeline, you start moving from gut feel to data-driven forecasting.
Building a Revenue Forecast Funnel
Borrow from sales, but tailor it for Customer Success.
Here’s a simple structure that can transform how your team forecasts renewal outcomes:
Forecast Stage | Definition | Probability | Typical Next Step |
Committed | High usage, active exec sponsor, outcomes achieved | 95–100% | Prep renewal paperwork |
Likely | Healthy adoption, positive sentiment, minor blockers | 75% | Exec alignment or value review |
At Risk | Declining usage, disengaged sponsor, low ROI proof | 50% | Escalate to recovery plan |
Critical | Key contact turnover, poor adoption, budget risk | <25% | Exec sponsor re-engagement |
Expansion Opportunity | Clear ROI, strong value proof, new use cases identified | +10–20% | Introduce expansion motion |
Tracking renewal ARR in these categories gives you visibility into forecast accuracy, and where your CSMs should focus weekly attention.
How to Operationalize Forward-Looking Forecasting
Implementing this shift doesn’t require new tools, it requires new discipline.
1. Standardize Renewal Health Criteria
Define what “Healthy,” “At Risk,” and “Critical” mean in quantifiable terms.
Tie each label to objective metrics, not just CSM opinion.
Example:
Healthy = 80%+ license utilization, exec sponsor met in last 45 days, success plan progress ≥70%
At Risk = usage drop >25% in 30 days, no exec contact in 90 days, sentiment flagged “neutral” or worse
2. Establish a Weekly Forecast Review
Run a Renewal Forecast Review just like a sales forecast call.
Review changes week over week
Identify revenue at risk and recovery plans
Track forecast accuracy by CSM
This simple rhythm aligns CS with the revenue org, and surfaces risk early.
3. Connect Signals to CRM
Integrate data like usage, sentiment, and success plan milestones into your CRM or CS platform.
Your goal: a unified “Revenue Signal Tracker” that rolls up to the forecast funnel automatically.
Speak in pipeline terms:
“Committed” renewals
“Upside” expansions
“At-risk” revenue
When you mirror sales language, you earn a seat at the revenue table.
The Payoff: Predictability, Not Surprises
Forward-looking forecasting isn’t about dashboards, it’s about confidence.
When you can anticipate which accounts will renew, expand, or churn months before contracts come due, you can:
Prioritize recovery and expansion motions early
Improve forecast accuracy and credibility with Finance
Build strategic playbooks around revenue risk
Backwards metrics tell you if you won or lost.
Forward metrics tell you why, and what to do before it’s too late.
Customer Success isn’t a cost center or a reactive support function.
It’s a revenue forecasting engine, if you give it the data and discipline to operate like one.
Backward-looking metrics celebrate the past.
Forward-looking forecasting shapes the future.
How accurate is your renewal forecast right now? If you are struggling with any of the above, reply to this email with your struggles and I’m happy to provide input.
