How to Calculate Deal-Based Renewal Rate

How to Calculate Deal-Based Renewal Rate
September 18, 2018
Deal-based renewal rate measures the percentage of renewal deals won out of the total number that were up for renewal in a period.

This blog post was originally published by Rekener, now a Brainshark company.

Deal-based renewal rate measures the percentage of renewal deals won out of the total number that were up for renewal in a period.  To measure deal-based renewal rate, you take your total number of renewal deals in a given period, and divide by the number of deals that expired in that same period.  

For example, if you had 380 renewal deals in Q2, and 400 deals that were up for renewal in Q2, then your deal-based renewal rate would be 380 / 400 = 95%.

To measure deal-based renewal rate with Salesforce data,

first count the number of closed won opportunities with a type of “renewal” with a close date in the period you are measuring.  Then count the number of opportunities that had a subscription end date in that same period. Then divide the closed won renewal opps by expired opps.

To measure deal-based renewal rate with HubSpot CRM data,

first count the number of closed won deals with a type of “renewal” with a close date in the period you are measuring.  Then count the number of deals that had a subscription end date in that same period. Then divide the closed won renewal deals by expired deals.

Sales scorecards can calculate deal-based renewal rate automatically,

and can measure it by sales rep, by account, industry, or any other breakdown.  Check out our sales scorecards solution to see how you can calculate deal-based renewal rate automatically.

Deal-based renewal rates can sometimes be misleading if you are renewing a lot of deals early.  To overcome this, you might want to look at deal-based renewal rate on a cohort basis.

Looking for more sales metrics know-how? Our comprehensive Sales Metrics Glossary will show you how to calculate 30 critical KPIs using CRM data.