How to report, measure and forecast added revenue? (AMRR)

[FrederikLindum]

Hi

In our company we do alot om M&As. Here the strategy is to move customers from their legacy system, that we've aquired through the M&A, to our system. We move customers from on prem to the cloud. 

Let's do an example:

• Customer A pays $ 1000 per month today for their legacy on prem system
• Customer A decides to order our new cloud system and the new MRR is $ 1 500

The amount on the Deal in Hubspot (the MRR) says $ 1 500, but that doesn't mean that we as a company has secured $ 1 500 in new revenue. Instead we've secured $ 500 in new revenue and it's only the $ 500 that is relevant. So how do we measure this? 

How do we do it today?

On the Company and Deal object we've created fields for Current MRR (text field). This means that when we close a Deal we insert the customers current MRR on that Deal, so that we can do a report in excel an manually calculate the AMRR by subtracting the current MRR with the amount (MRR) on the won Deal in Hubspot. 

What challenges does this give us?

First, you are not able to see the added revenue sold in Hubspot. When looking at all closed Deals for a month it could be $20 000, but this says nothing about AMRR. With won Deals we are, as explained above, able to do this manually, but it is not only with won Deals that we wish to look at AMRR, we also want to only forecast AMRR. So how do we do that? 

The goals inserted into Hubspot are also AMRR. Therefore, we are not able to see if we are on or off target, due to the fact that the goal is AMRR and won Deals are shown as regular MRR.  

How I think (hope) we can solve it

My assumption is that it should be possible to set up Hubspot to automatically subtract the amount inserted into the Current MRR field on the Deal with the amount (MRR) on the Deal and then setup all reports (won Deals, A vs B, Forecast, lost Deals, etc.) to use that number instead. 

Hope that anyone has an easy-to-implement-solution to this.

If you need to me to elaborate further don't hesitate to ask. 

Thanks in advance! 

[Mike_Eastwood · Accepted solution]

Hi @FrederikLindum 

This is more fun than I thought (yes, I need to get out more).

What if you used Calculated Properties (available on Enterprise) AND then used a Worflow to update your deal amounts?

If you can draw what you want to achieve I'd be happy to take a look and see how to build it.

Mike

[FrederikLindum]

Hi @Mike_Eastwood 

This is exactly what I hoped existed. I'll look into this. From the looks of it, this solves our problem. Thank you very much. I'll update you on the outcome after our BI team get a chance to look more into this. 

[FrederikLindum]

Hi @Mike_Eastwood 

Thanks for replaying. 

A good suggestion! A few comments though:

1. We start forecasting from the very first stage in Hubspot. This often means that the Items change during the lifetime of the Deal, meaning that the Revenue Increase would also change accordingly to the change in Items. With this solution we would need to manually calculate the change in Revenue Increase each time we change an Item. This is not scalable for our department because each sales rep at any given time works with 25 - 50 Deals. 
2. If we do this anyway, would we then be able to create a forecast using the native fields for Probability, and Close date, and then create a new Forecast Amount field that automacially calculated the weighed amount based on Revenue Increase, Forecast Probability and Close Date?

As an solution for Closed Won Deals (maybe also Closed Lost Deals) this is definately something that could work - didn't think about that, but I don't see it as a great solution for Forecasting due to many manual calculations during the lifespan of the Deal.  

[Mike_Eastwood]

Hi @FrederikLindum 

What if you add a couple of Custom Properties to your Deal, specifically:

- Legacy Revenue (e.g. $1,000 using your example)

- Revenue Increase (e.g. $500 using your example)

Then you could keep the Deal Amount for the the Total Sales (so you can take advantage of all the default reporting) and you can then create a new Custom Report to pull out the revenue increase.

Also, if you can, I'd look at using Products and Line Items to improve your reporting.

Happy to discuss – send me a message.

Have fun

Mike

[TiphaineCuisset]

Hi @FrederikLindum 

Thank you for reaching out and for the detailed use case!

I want to tag some of our experts on this - @Josh @Bryantworks @NicoleSengers @danmoyle do you have any thoughts or suggestions for @FrederikLindum on this? 

Thank you!

Best

Tiphaine

[FrederikLindum]

Hi @tip 

Thanks for your answer. 

Not sure why I didn't notice your answer sooner. Anyway, would love if any of the experts have any suggestions? This should be a fun one to crack I would imagine 😀 

[TiphaineCuisset]

Hi @FrederikLindum 

No worries! I'll tag some more people to see if someone has any thoughts - @karstenkoehler @Mike_Eastwood @GeorgeBThomas do you have anything to share with @FrederikLindum on this? 

Thank you!

Best

Tiphaine