Forecast Models

There are two ways to model traffic or pipeline volume in revenue streams - Forecast Models and Conversion Rules.

  • Forecast Model directly creates new customers for the customer contracts of its revenue stream using different forecast drivers and targets, e.g. a volume of New Paying Customers is created when Sales Teams - having a monthly "New Customer" Target - achieve their target or a volume of New Signups is created after Marketing Budget has been spent.
  • Conversion Rule connects two customer contracts (within the same or in 2 different revenue streams) and simulates upselling/downselling logic, e.g. additional volume of Paying Customers is created when 10% of signups convert into Paying Customers on a monthly basis.

Forecast Models - Drivers and Targets

A Forecast Model allows to define how many new customers of each customer type are signed up as leads or contracted as buyers every period. Forecasts create the volume required to grow and scale your business, e,g. traffic volume (new leads), pipeline volume (new opportunities) or customer volume (new customers). Select the Forecast Model which best suits your go-to-market approach. How do you scale your business over time? By the number of New Customers (e.g. if you directly sell to customers online), by the number of New Sales Teams (e.g. if you follow an inside or outside sales model), by the number of New Sales Partners (e.g. Distributors or Point-of-Sales),  by the revenue target set for your company, sales teams or sales partners or by the marketing budget available?

Note: How best to define a 'Customer' depends on the revenue stream which you are modelling as part of your Customer Licefycle. These might be Leads, Signups, Opportunities, Trials, Buyers, …
Which Forecast Model to pick?

Each Forecast Models combines a Forecast Driver and a Forecast Target.

  • the Forecast Driver describes your Go-To-Market approach - how to scale your business over time, e.g. by the number of "New Customer" or "New Sales Teams" or by "Revenue Targets" or "Marketing Budgets"
  • the Forecast Target defines the target metric for each forecast driver, e.g. how many new customers  a or sales teams sign up or what the size of the Revenue Target or Marketing Budget  is

If you click the Tab icon next to the metrics, you can use the the Lean-Case Spreadsheet widget to adjust the data series for drivers and targets over time, e.g. to define the exact points in time when you hire a new Sales Team or to define how the target of the new Sales Team ramps up.


List of Forecast Models

The table below lists the available Forecast Models - when you can apply them and describing revenue drivers and revenue targets 

New Customers

... if you sign up leads or users via direct mechanisms (e.g. ads)

-

Define "New Customer" Target incl Ramp-up for the business

New Customers per Sales Team

... if you follow an inside or outside sales model

Define Hiring Plan for "New Sales Teams"

Define "New Customer" Target incl Ramp-up for each Sales Team

New Customers per Sales Partner

... if you follow an indirect partner sales model

Define Hiring Plan for "New Sales Partners"

Define "New Customer" Target incl Ramp-up for each Sales Partner

New MRR

... if you sign up paying subscribers directly with a revenue target for "New MRR" (New Monthly Recurring Revenues) 

-

Define "New MRR" Target incl Ramp-up for the business

New MRR per Sales Team

... if you sign up paying subscribers  following a direct sales model

Define Hiring Plan for "New Sales Teams"

Define "New MRR" Target incl Ramp-up for each Sales Team

New MRR per Sales Partner

... if you sign up paying subscribers  following an indirect sales model

Define Hiring Plan for "New Sales Partners"

Define "New MRR" Target incl Ramp-up for each Sales Partner

Marketing Budget

... if you sign up customers via marketing and know your cost of leads

-

Define available "Marketing Budget" incl Ramp-up over time

Account-based Forecast

... if you want to forecast specific customer accounts using customer contracts

.

Target automatically set so that customer contracts are simply added up

Cost-Benefit Analysis

... if you want to forecast benefits and related cost using customer contract logic

.

Target automatically set so that benefits are simply added up

Direct and Indirect Forecasting

Each of the forecast models calculates the number of New Customers for its revenue streams - directly or indirectly:

  • direct forecasting - if the  forecast target is a "New Customer" number, then the volume of new customers which are generated through the forecast can be directly calculated. 
  • indirect forecasting -  if the  forecast target is not a "New Customer" number, but is based on a revenue target or marketing budget, then the volume of new customers which are generated through the forecast can only be calculated indirectly
  • direct forecasting - if the  forecast target is a "New Customer" number, then the volume of new customers which are generated through the forecast can be directly calculated. 
  • indirect forecasting -  if the  forecast target is not a "New Customer" number, but is based on a revenue target or marketing budget, then the volume of new customers which are generated through the forecast can only be calculated indirectly
  • for revenue targets - to calculate the number of new customers to be created via a revenue target, the revenue target is divided by the average revenue which is generated through a customer based on its contract
  • for marketing budgets targets - to calculate the number of new customers to be created via a marketing budget, the marketing is divided by the average cost of leads which are defined in the Cost of Leads Model

Forecast: Number of New Customers

New Customers - grow by directly adding new customers to this revenue stream (e.g. Sign up 10 new customers or leads per month)

Forecast and Timing

What do you want to call the Forecast Model?

Enter a name for your Forecast Model (e.g. Online Sales, Saleforce, ..)

When do you start building volume in your business?

According to your Forecast Model, pick the first month to add new traffic, pipeline, customers or resources like sales teams, .. to your customer lifecycle.

Until when do you continue to build volume?

Pick the last month to add volume to your customer lifecycle. We recommend to start with the same start and end date, i.e. you build volume only for 1 month (for 1 customer cohort) and add a later end-date afterwards. Creating only 1 month of volume, makes it easier and more transparent to build up a customer lifecycle model.

Forecast Driver and Target

How many new customers are you acquiring per month?

Enter how many new customers are you signing up per month. You can enter a flat number or vary the number over time to reflect growth, seasonality, added resources, … via the 

 icon How many ‘New Customers’ are you adding per month?


Forecast New Customers per Sales Team/Partner


New Customers per Sales Team/Partner - grow by adding new Sales Teams/Partner which all have a target to sign up New Customers on a monthly basis (e.g. Hire a new Sales Team per quarter or hire Sales Partner per year. Each Sales Team/Partner has a target to sign up 10 new customers per month).


Forecast and Timing


What do you want to call the Forecast Model?

Enter a name for your Forecast Model (e.g. Online Sales, Saleforce, ..)


When do you start building volume in your business?

According to your Forecast Model, pick the first month to add new traffic, pipeline, customers or resources like sales teams, .. to your customer lifecycle.


Until when do you continue to build volume?

Pick the last month to add volume to your customer lifecycle. We recommend to start with the same start and end date, i.e. you build volume only for 1 month (for 1 customer cohort) and add a later end-date afterwards. Creating only 1 month of volume, makes it easier and more transparent to build up a customer lifecycle model.


Forecast Driver and Target


How many new Sales Teams/Partners are you adding per month?

Enter how many new sales teams/partners you are hiring per month. You can enter a flat number or edit the number over time to reflect growth, seasonality, added resources, …  via the <UPW> icon.

How many New Sales Teams/Partners are you adding per month?


How many new customers does a Sales Team/Partner have to sign up monthly to meet its target?

Enter how many new customer a Sales Team/Partner has to sign up per month to achieve its target. You can enter a flat number or vary the number over time to reflect ramp up, growth, … via the <UPW> icon. How many new customers does one Sales Team/Partner acquire per month?

Note: How best to define a 'Customer' depends on the revenue stream which you are modelling as part of your Customer Licefycle. These might be Leads, Signups, Opportunities, Trials, Buyers, …


Forecast New MRR (Monthly Recurring Revenues)


New MRR Quota (Monthly Recurring Revenue) - grow by achieving a New MRR Quota for your entire business (e.g. your Subscription Business has a "New MRR Quota" of 15k per month. With an average subscription of 1k per customer this translates into 15 new customers per month).


Forecast and Timing


What do you want to call the Forecast Model?

Enter a name for your Forecast Model (e.g. Online Sales, Saleforce, ..)


When do you start building volume in your business?

According to your Forecast Model, pick the first month to add new traffic, pipeline, customers or resources like sales teams, .. to your customer lifecycle.


Until when do you continue to build volume?

Pick the last month to add volume to your customer lifecycle. We recommend to start with the same start and end date, i.e. you build volume only for 1 month (for 1 customer cohort) and add a later end-date afterwards. Creating only 1 month of volume, makes it easier and more transparent to build up a customer lifecycle model.


Forecast Driver and Target


What is the ‘New MRR for your business per month?


Enter how much ‘New MRR’ you are targeting for your business each month. You can enter a flat number or vary the number over time to reflect growth, seasonality, added resources, … via the <UPW> icon. How much ‘New MRR’ are you targeting per month?


Note: If the company signs up 5 new customers in one month each with 1k MRR (Monthly Recurring Revenue), then the company generates 5k of ‘New MRR’. Signing up 5 new customers every month in a year, adds up to 60k MRR. 60k of MRR at the end of the year translate into 720k of ARR (Annual Recurring Revenue).


Forecast New MRR per Sales Team/Partner


New MRR Quota per Sales Team/Partner - grow by achieving a New MRR Quota per Sales Team/Partner (e.g. each Sales Team/Partner in your Subscription Business has a "New MRR Quota" of 5k per month. With an average subscription of 1k per customer this translates into 5 new customers per month).


Forecast and Timing


What do you want to call the Forecast Model?

Enter a name for your Forecast Model (e.g. Online Sales, Saleforce, ..)


When do you start building volume in your business?

According to your Forecast Model, pick the first month to add new traffic, pipeline, customers or resources like sales teams, .. to your customer lifecycle.


Until when do you continue to build volume?

Pick the last month to add volume to your customer lifecycle. We recommend to start with the same start and end date, i.e. you build volume only for 1 month (for 1 customer cohort) and add a later end-date afterwards. Creating only 1 month of volume, makes it easier and more transparent to build up a customer lifecycle model.


Forecast Driver and Target


How many new Sales Teams/Partners are you adding per month?

Enter how many new sales teams/partners you are hiring per month. You can enter a flat number or edit the number over time to reflect growth, seasonality, added resources, …  via the <UPW> icon.

How many New Sales Teams/Partners are you adding per month?


What is the ‘New MRR’ Target for each Sales Team/Partner per month?

Enter how much ‘New MRR’ each Sales Team/Partner has to target in each month. You can enter a flat number or edit the number over time to reflect ramp-up, growth,   … via the <UPW> icon. How much ‘New MRR’ are you targeting per month and Sales Team/Partner?

 

Note: If a Sales Team/Partner signs up 5 new customers in one month each with 1k MRR (Monthly Recurring Revenue), then Sales Team/Partner generates 5k of ‘New MRR’. Signing up 5 new customers every month in a year, adds up to 60k MRR. 60k of MRR at the end of the year translate into 720k of ARR (Annual Recurring Revenue).


Forecast Cross-Selling


Cross-Selling - grow by cross-selling to a existing customers in another revenue stream (e.g. cross sell your Integration Services to 60% of Subscription Customers with a time delay of 1 months).


Forecast and Timing


What do you want to call the Forecast Model?

Enter a name for your Forecast Model (e.g. Online Sales, Saleforce, ..)


When do you start building volume in your business?

According to your Forecast Model, pick the first month to add new traffic, pipeline, customers or resources like sales teams, .. to your customer lifecycle.


Until when do you continue to build volume?

Pick the last month to add volume to your customer lifecycle. We recommend to start with the same start and end date, i.e. you build volume only for 1 month (for 1 customer cohort) and add a later end-date afterwards. Creating only 1 month of volume, makes it easier and more transparent to build up a customer lifecycle model.


Forecast Driver and Target


To how many customers of a different revenue stream are you cross selling?

Select to which customers you cross sell by selecting the revenue stream and the respective contract type. Then enter how many of these customers in % you can cross sell to and what the time delay in months is.


Select the Revenue Stream to which you cross sell your service / product.



Select if you cross-sell to all or only to customers with a specific customer contract.



What is your Cross-Selling Rate in %?

Enter to how many of the customers in the selected revenue stream you cross sell to. You can adapt the rate over time using the <UPW> icon.


What is the average delay in months for your cross-selling efforts?

Enter the average number of months it takes to cross sell


Forecast Marketing Budget


Marketing Budget - grow by marketing and acquiring traffic, pipeline and customer volume (e.g. with a marketing budget of 10k per month and cost-per-lead of $10 you can acquire 1000 new leads per month).


Forecast and Timing


What do you want to call the Forecast Model?

Enter a name for your Forecast Model (e.g. Online Sales, Saleforce, ..)


When do you start building volume in your business?

According to your Forecast Model, pick the first month to add new traffic, pipeline, customers or resources like sales teams, .. to your customer lifecycle.


Until when do you continue to build volume?

Pick the last month to add volume to your customer lifecycle. We recommend to start with the same start and end date, i.e. you build volume only for 1 month (for 1 customer cohort) and add a later end-date afterwards. Creating only 1 month of volume, makes it easier and more transparent to build up a customer lifecycle model.


Forecast Driver and Target


What is the ‘Marketing Budget’ for your business per month?

Enter how much ‘Marketing Budget’ you have available in your business each month. You can enter a flat number or vary the number over time to reflect growth, seasonality, … via the <UPW> icon.


Note: Using the Marketing Budget Forecast requires you to also define the Cost of Leads (e.g. with a marketing budget of 10k per month and cost-per-lead of $10 you can acquire 1000 new leads per month).


Forecast Account-Based


Forecast and Timing


What do you want to call the Forecast Model?

Enter a name for your Forecast Model (e.g. Online Sales, Saleforce, ..)


When do you start building volume in your business?

According to your Forecast Model, pick the first month to add new traffic, pipeline, customers or resources like sales teams, .. to your customer lifecycle.


Until when do you continue to build volume?

Pick the last month to add volume to your customer lifecycle. We recommend to start with the same start and end date, i.e. you build volume only for 1 month (for 1 customer cohort) and add a later end-date afterwards. Creating only 1 month of volume, makes it easier and more transparent to build up a customer lifecycle model.


Forecast Driver and Target

If you are using the Forecast “Account Based”, you can use each Contract Type of a Lean-Case Revenue Stream to forecast the revenues of specific customer account. Each contract type will be treated as one account.


Forecast Cost-Benefit


Forecast and Timing


What do you want to call the Forecast Model?

Enter a name for your Forecast Model (e.g. Online Sales, Saleforce, ..)


When do you start building volume in your business?

According to your Forecast Model, pick the first month to add new traffic, pipeline, customers or resources like sales teams, .. to your customer lifecycle.


Until when do you continue to build volume?

Pick the last month to add volume to your customer lifecycle. We recommend to start with the same start and end date, i.e. you build volume only for 1 month (for 1 customer cohort) and add a later end-date afterwards. Creating only 1 month of volume, makes it easier and more transparent to build up a customer lifecycle model.


Forecast Driver and Target

If you are using the Forecast “Cost-Benefit”, you can use each Contract Type of a Lean-Case Revenue Stream to forecast the benefits of a specific action or measurement to create benefits. Each contract type will be treated as the result of one additional benefit.








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Forecast Models

Forecast Models - Drivers and Targets

List of Forecast Models

Direct and Indirect Forecasting

Forecast: Number of New Customers

Forecast and Timing

Forecast Driver and Target

Forecast New Customers per Sales Team/Partner

Forecast New Customers per Sales Team/Partner

Forecast and Timing

Forecast and Timing

What do you want to call the Forecast Model?

Forecast Driver and Target

How many new Sales Teams/Partners are you adding per month?

How many new customers does a Sales Team/Partner have to sign up monthly to meet its target?

Enter how many new customer a Sales Team/Partner has to sign up per month to achieve its target. You can

Forecast New MRR (Monthly Recurring Revenues)

Forecast New MRR (Monthly Recurring Revenues)

Forecast and Timing

What do you want to call the Forecast Model?

Forecast Driver and Target

What is the ‘New MRR for your business per month?

Forecast New MRR per Sales Team/Partner

New MRR Quota per Sales Team/Partner - grow by achieving a New MRR Quota per Sales Team/Partner (e.g. each Sales

Forecast and Timing

What do you want to call the Forecast Model?

Forecast Driver and Target

How many new Sales Teams/Partners are you adding per month?

What is the ‘New MRR’ Target for each Sales Team/Partner per month?

Enter how much ‘New MRR’ each Sales Team/Partner has to target in each month. You can enter a flat number

Forecast Cross-Selling

Cross-Selling - grow by cross-selling to a existing customers in another revenue stream (e.g. cross sell your Integration Services to

Forecast and Timing

What do you want to call the Forecast Model?

Forecast Driver and Target

To how many customers of a different revenue stream are you cross selling?

To how many customers of a different revenue stream are you cross selling?

Select to which customers you cross sell by selecting the revenue stream and the respective contract type. Then enter how

Select the Revenue Stream to which you cross sell your service / product.

Select if you cross-sell to all or only to customers with a specific customer contract.

Select if you cross-sell to all or only to customers with a specific customer contract.

What is your Cross-Selling Rate in %?

What is your Cross-Selling Rate in %?

Enter to how many of the customers in the selected revenue stream you cross sell to. You can adapt the

What is the average delay in months for your cross-selling efforts?

Enter the average number of months it takes to cross sell

Forecast Marketing Budget

Marketing Budget - grow by marketing and acquiring traffic, pipeline and customer volume (e.g. with a marketing budget of 10k

Forecast and Timing

What do you want to call the Forecast Model?

Forecast Driver and Target

What is the ‘Marketing Budget’ for your business per month?

What is the ‘Marketing Budget’ for your business per month?

Enter how much ‘Marketing Budget’ you have available in your business each month. You can enter a flat number or

Forecast Account-Based

Forecast and Timing

What do you want to call the Forecast Model?

Forecast Driver and Target

If you are using the Forecast “Account Based”, you can use each Contract Type of a Lean-Case Revenue Stream to

Forecast Cost-Benefit

Forecast and Timing

What do you want to call the Forecast Model?

Forecast Driver and Target

If you are using the Forecast “Cost-Benefit”, you can use each Contract Type of a Lean-Case Revenue Stream to forecast

  • Forecast Models
  • Forecast Models - Drivers and Targets
  • List of Forecast Models
  • Direct and Indirect Forecasting
  • Forecast: Number of New Customers
  • Forecast and Timing
  • Forecast Driver and Target
  • Forecast New Customers per Sales Team/Partner
  • Forecast and Timing
  • Forecast Driver and Target
  • How many new customers does a Sales Team/Partner have to sign up monthly to meet its target?
  • Forecast New MRR (Monthly Recurring Revenues)
  • Forecast and Timing
  • Forecast Driver and Target
  • Forecast New MRR per Sales Team/Partner
  • Forecast and Timing
  • Forecast Driver and Target
  • What is the ‘New MRR’ Target for each Sales Team/Partner per month?
  • Forecast Cross-Selling
  • Forecast and Timing
  • Forecast Driver and Target
  • To how many customers of a different revenue stream are you cross selling?
  • Select the Revenue Stream to which you cross sell your service / product.
  • Select if you cross-sell to all or only to customers with a specific customer contract.
  • What is your Cross-Selling Rate in %?
  • What is the average delay in months for your cross-selling efforts?
  • Forecast Marketing Budget
  • Forecast and Timing
  • Forecast Driver and Target
  • What is the ‘Marketing Budget’ for your business per month?
  • Forecast Account-Based
  • Forecast and Timing
  • Forecast Driver and Target
  • Forecast Cost-Benefit
  • Forecast and Timing
  • Forecast Driver and Target