Josh Abdulla on the Red Renewals Process at Asana
Written by Alex Raymond, founder of AMplify and author of The Growth Department.
Josh Abdulla is Chief Customer Officer at Asana, which serves about 170,000 customers. In his first quarter, the team was hit by very large churns nobody had forecast. He built Red Renewals, a process that flags enterprise renewals at risk nine to twelve months ahead and reviews every new one every two weeks. His verdict a year later: "Now I'm proud to say there are no surprises."
The surprise-churn quarter
Abdulla told the story on episode 54 of Account Management Secrets. "When I first came here 12 months ago, my first quarter, we were surprised by some very, very large churns that, you know, just we weren't forecasting, we weren't on top of it."
The reason is timing. In the enterprise, this quarter's churn is decided long before the quarter starts. A team can influence churn a quarter out, more so two quarters out, and most of all three and four quarters out. A product problem takes longer than that to fix. "You better darn well find out that there's a product issue 12 months in advance so you actually have an opportunity to do something about it."
How Red Renewals works
The goal is to find risk nine to twelve months before the renewal date, "and bonus points if you can do it more than nine to 12 months in advance." Asana uses four signals to decide when a renewal turns red:
- Utilization. If fewer than 70% of a customer's users log in at least once every three months, the renewal is flagged automatically.
- Account retention score. A red, yellow, or green rating built by Asana's data science team.
- Qualitative signals. Merger and acquisition activity, a departed champion, and similar changes.
- Support engagement. The volume of support tickets and what they are about.
Each red renewal becomes a task in Asana that brings in the whole account team, and every update lives there until the renewal closes. Abdulla reads the new ones every day. At any time, 300 to 700 red renewals are open across 5,000 to 8,000 enterprise customers.
The core of the process is the review. Every two weeks, Abdulla works with the Customer Success leaders and Customer Success Managers to "interrogate" each new red renewal. The questions repeat: Have you talked to the customer? When was the last QBR? When was the last onsite? When did you last talk to your champion?
Low usage is a symptom
Most red renewals arrive with the same reason code: low product utilization. The review exists to get past it. "Because product utilization being low is a symptom, not a cause in most cases."
The real cause tends to fall into one of two groups. Sometimes it is the team's own work, such as a lapsed QBR or a lost stakeholder. "More of it is behavior than I would like," Abdulla said. Those cases become coaching, done "not in an accusatory way, but in a coaching style," so the Customer Success Manager arrives at the next review with better answers.
Sometimes it is the product. Because hundreds of red renewals sit in one place, patterns show up, such as a single third-party integration issue tied to a known amount of at-risk revenue. That turns a feature request into a decision the product team can weigh in dollars. "I can't go fix the product," Abdulla said. "But what I can do is draw sunlight on those specific issues, take those issues to the right leaders, get their buy-in by showing them the data."
The standard: plus or minus 3%
Abdulla holds the forecast to a tight standard. "At the beginning of quarter, you should probably be within plus or minus 3% of accuracy, meaning if you say $100 is going to churn at the beginning of the quarter, by the end of the quarter, you should either be at $97 to $103." Red Renewals is how a team earns that number, because the surprises get caught quarters before they land.
What Red Renewals is in the Method
Red Renewals is the Bi-Weekly Risk Review, one of the seven meetings in the Cadence phase of the Growth Department Method. The list it works from is the Risk Register, the central artifact of the Commitment phase. Its purpose is the third job in Keep, Grow, No Surprises. When I described that standard to Abdulla on the show, his reply was: "I'm going to use that in my all hands next week."
A list without the meeting does not get a team there. One AMplify member who leads a Customer Success team described the halfway point: "We are tracking, you know, what is a red renewal, and I think that we've gotten a lot better at that." And yet, she added, "we still get the occasional surprise email." The list flags the risk, and the review every two weeks is where someone works it.
How to start your own
Pull every renewal due in the next nine to twelve months and write down the rules that turn one red. Put a review on the calendar every two weeks with the people who own those accounts, and ask the same questions about each new red renewal until you reach the real cause. Route product causes to the product team with the revenue attached. At the end of each quarter, compare the forecast to what happened. The renewals guide covers the rest of the renewal process.
Listen to the full conversation with Josh Abdulla on Account Management Secrets.
The Growth Department is the post-sale revenue operating standard for B2B companies. Take the ten-minute Post-Sale Stress Test to see where your function stands across Clarity, Commitment, and Cadence. Or download the free audiobook of The Growth Department and read the manifesto.
About the author Alex Raymond is the founder of AMplify and the author of The Growth Department, the operating standard for the function that delivers most of a company's revenue. He spent a decade building Account Management and Customer Success systems with B2B companies before founding AMplify, where he works with Post-Sale leaders on installing the Growth Department Method. He hosts the Account Management Secrets podcast.
