Written by: Tash Evans
What is a “gap”?
If you own or are targeted on a GRR or NRR number, you’ll know your target or your financial plan for the quarter and for the year. But do you know how far away you are from hitting it? And do you have a data-driven plan to get there?
We call the difference between your forecast and your target/financial plan your “gap”.
See this article on how to calculate your forecast through Hook and therefore calculate your “gap”.
Creating a Data-Driven Plan to Plug your “gap”
Once you know your “gap” you know exactly how many churn dollars you are away from hitting your target. Now we use Hook to hunt down those churn dollars that you want to find to hit target, in a few different ways:
Evaluating risk that could be mitigated
Review your Very Low and Low Engagement Level buckets in the Customer Distribution section - how much of that red renewing ARR do you think you could move up to yellow or green? How many dollars would you get back in your forecast?
Improving retention rates on healthy accounts
Review your High bucket. What’s the difference in renewal rate percentage from High to Very High? If you moved all High to Very High, how would that improve your forecast?
Re-deploying CS resources to your riskiest areas
Analyse your risk in the Customer Distribution by Segment, CS Tier, Geo and Renewal Quarter. Do you need to reallocate your CS resource more to specific segments, tiers or geographies based on where your risk sits? Which quarter has the most risk? How much risk sits in your business three or four quarters out, where you’ve got the most time to influence it?
Turning around your biggest swing accounts
Review your highest ARR customers in the Very Low and Low buckets. If you turn those into High or Very High, how many dollars would you get back in your forecast?
Use this analysis to create a data-driven plan on how you will hit your forecast.