How to Calculate Deal-Based Renewal Rate on a Cohort Basis

How to Calculate Deal-Based Renewal Rate on a Cohort Basis
September 18, 2018
Deal-based renewal rate, calculated on a cohort basis, measures the percentage of opportunities renewed 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, calculated on a cohort basis, measures the percentage of opportunities renewed out of the total number that were up for renewal in a period.  

To measure deal-based renewal rate on a cohort basis, you take your total number of expiring subscriptions in a period, and measure how many of them got renewed, and divide the number of renewals by the number of expirations.  

For example, if you had 400 deals up for renewal in Q2, and 350 of them were renewed, then your deal-based renewal rate on a cohort basis would be 350 / 400 = 87.5%.

To measure deal-based renewal rate on a cohort basis with Salesforce data,

first count the number of closed won opportunities that had a subscription end date in that period.  Then calculate how many renewal opportunities you won, from that set of expirations. Divide the number of renewals by the number of expiring opps to get your renewal rate.

To measure deal-based renewal rate on a cohort basis with HubSpot CRM data,

first count the number of closed won deals that had a subscription end date in that period.  Then calculate how many renewal opportunities you won, from that set of expirations. Divide the number of renewals by the number of expiring deals to get your renewal rate.

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.

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