Who's this for:
Read this article to learn 2 different ways you could set up a Gong forecast board to forecast renewals.
The recipe you want to follow is going to depend on the focus of your business:
Set up for total ARR forecasting to understand how much revenue you'll get from your existing customers.
Set up for net ARR forecasting to understand the impact of your renewals.
There are dozens of different ways to forecast renewals, but these are the two most common that we see. Our team would be happy to help you customize your renewals board based on your business needs, simply reach out to your CSM.
Also known as Net ACV (annual contract value) forecasting, this method helps a company understand how much money they’ll get from existing customers.
In this method, you forecast the renewal amount as a positive number.
For example, you have two deals that are up for renewal at the value of $100k renewal. Deal 1 is going to renew for $90k, and deal 2 is going to renew for $150k.
In total ARR forecasting, deal 1 should be forecast at $90, and deal 2 should be forecast at $150k.
Net ARR forecasting helps a company understand the company's ongoing financial stability and growth potential. It helps you understand the impact of your renewals.
In this method, you forecast the renewal amount by taking off the actual amount from the deal value.
For example, you have three deals that are up for renewal at the value of $100k renewal. Deal 1 is going to renew for $90k, deal 2 is going to renew for $150k, and deal 3 is not going to renew at all.
In net ARR forecasting, deal 1 (downgrade) should be forecast at -$10, deal 2 (upsell) should be forecast at $50k, and deal 3 (churn) should be forecast at -$100K.