Renewal Center Analytics Calculations
Gainsight NXT
This article explains how various metrics are calculated in the Renewal Center module.
Overview
This article explains how Renewal Center calculates financial metrics available on the Analyze page. The Analyze page shows metrics based on data available in the GS Opportunity object.
Renewal Center Financial Metrics
The following list of financial metrics are available on the Analyze page.
- Renewals Due
- Renewal Forecast
- Gainsight Forecast
- Gross Renewal Rate
- Upsell Forecast
- Net Renewal Rate
- Renewal Actuals
- Churn Actuals
- Upsell Actuals
Renewals Due
Renewals Due shows the value of opportunities available for renewal.
- Renewals Due is calculated by taking renewal opportunities and summing the Target Amount.
- Only opportunities that have Due Dates in the selected period are included.
Renewal Forecast
Renewal Forecast shows the value of won and open renewals being forecasted. This forecast is net of any downsell or churn. This forecast excludes upsell. Only opportunities that have Due Dates in the selected period are included.
- Won renewals are summed using the Final Amount
- Open renewals are summed using the Forecast Amount
- Since this forecast excludes upsell, any value over the Target Amount is excluded.
Notes:
- The Renewal Forecast high/medium/low scenarios will include only records in the selected Forecast Categories as configured in Forecast Scenarios.
- The Renewal Forecast CRM Probability scenario includes records from all Forecast Categories and sums the Expected Forecast.
Gainsight Forecast
Gainsight Forecast is a data science derived renewal forecast. This is calculated by taking renewal opportunities and summing the DS Forecast Amount. Like the DS Likelihood Score, the same customer health and engagement data is used.
- DS Forecast Amount: The DS forecast amount is calculated in an identical manner as DS Likelihood score. However, the historic revenue conversion rates are considered instead of renewal close rates.
- Only opportunities that have Due Dates in the selected period are included.
For more information on DS Forecast and DS Likelihood Score, refer to the Data Science Scores in Renewal Center article.
Gross Renewal Rate
Gross Renewal Rate (GRR) is the percentage of renewed dollars compared to the total renewal due. This number doesn’t include cross-sell or upsell. This metric measures your success in retaining the existing value of your customer relationship.
- GRR = Renewal Forecast / Renewals Due
Upsell Forecast
Upsell Forecast summarizes the value of won and open upsell. Upsells can occur as a part of a renewal when the Forecast or Final Amount is greater than the Target Amount. Upsells can also occur independently of a renewal as its own separate opportunity. Since these mid-cycle upsells do not have a Due Date, the selected period is applied to the Close Date when it is a separate upsell opportunity.
- Won upsells are summed using the Final Amount field
- Open upsells are summed using the Forecast Amount field
- Since this is an upsell forecast, only the value above the Target Amount is included.
Notes:
- The Upsell Forecast high/medium/low scenarios will include only records in the selected Forecast Categories as configured in Forecast Scenarios.
- The Upsell Forecast CRM Probability scenario includes records from all Forecast Categories and sums the Expected Forecast.
Net Renewal Rate
Net Renewal Rate (NRR) is the rate at which customers are renewing and expanding. It differs from Gross Renewal Rate, which only shows the rate at which customers are renewing and does not take expansion into account.
- NRR = (Renewal Forecast + Upsell Forecast) / Renewals Due
Renewal Actuals
Renewal Actuals show the value of won renewals. This value is net of any downsell or churn. This value excludes upsell. Only opportunities that have Due Dates in the selected period are included. The count shown in the widget is based on the number of companies.
- Won renewals are summed using the Final Amount field
- Since this forecast excludes upsell, any value over the Target Amount is excluded
- Compared to Renewal Forecast, Renewal Actuals do not include open opportunities
Churn Actuals
Churn Actuals show the value of lost and downsold renewal opportunities. The count shown in the widget is based on the number of companies.
- Lost renewals are calculated using the Target Amount of Closed Lost renewal opportunities. Downsold renewals have a Final Amount that is less than the Target Amount. This is calculated by subtracting the Final Amount from the Target Amount. The selected Forecast Period is applied to the Due Date.
- Downsells can also occur independent of a renewal. When an opportunity is created to track downsell, we calculate using the Forecast Amount. The selected Forecast Period is applied to the Close Date since we would not expect a Due Date for downsells.
Upsell Actuals
Upsell Actuals show the won value of upsold renewal opportunities and upsells that occurred independent of a renewal. The count shown in the widget is based on the number of companies.
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Upsold renewals have a Final Amount that is more than the Target Amount. The upsold portion is calculated by subtracting the Target Amount from the Final Amount. For upsold renewal opportunities, the selected Forecast Period is applied to the Due Date.
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Upsells can also occur independent of a renewal. When an opportunity is created to track won upsells, we calculate using the Final Amount. The selected Forecast Period is applied to the Close Date since we would not expect a Due Date for upsells.
Points to Consider
When the results of these calculations are unexpected, consider the following:
- This is an analysis of opportunities. Finance derived metrics may use contracts, subscriptions, or other data sources, and can include manual adjustments. An opportunities based analysis helps teams that work on these opportunities to see their impact on Gross and Net Retention. If your opportunity data is not suitable, you can use the account-based forecasting option in Renewal Center.
- Are opportunities classified appropriately as Renewals, Upsells, and Downsells? The Booking Types configuration allows Renewal Center to determine which opportunities are Renewals, Upsells, and Downsells. You can confirm the results by looking at GS Booking Type. Renewal Center further determines whether a renewal has upsell or downsell by comparing the Forecast and Final Amounts with the Target Amount. The upsell/downsell value is stored in Change Value. The classification of the opportunity as Renewal with Upsell, and Renewal with Downsell is stored in Inferred Booking Type.
- Results are highly dependent on what opportunities are included for analysis. The opportunity data can include duplicate or test opportunities for example. These opportunities can be excluded by adjusting the Booking Types configuration. End user filters can also be adjusted, but users may not understand and remove them.
- Duplicate Target Amounts is a common data issue impacting Renewals Due. When an account has multiple opportunities, the Target Amounts must reflect the renewable value of the opportunity, and not the account.
- It is not possible to replicate most of these reports in Horizon Analytics. These reports combine both won and open opportunities. Won opportunities are summed using the Final Amount while open opportunities are summed using the Forecast Amount. The selected Forecast Period is applied to the Due Date for all Renewals (flat renewals, renewals w/ upsell, renewals w/ downsell). For upsell and downsells that are separate opportunities, the Close Date is used. If it is necessary to simplify calculations, consider making the Final Amount the same as Forecast Amount and Due Date the same as Close Date. Final Amount is intended for customers who have a process for auditing won deals and want to use an official amount that the opportunity closed. Due Date is intended for customers who want to determine if renewals are late.