@@ -63,6 +63,125 @@ Our management philosophy regarding the expectations of booking renewals is simp
## Compensation
## Churn and Contraction – Order Type Guide for Renewals
### Purpose
This section explains how Contraction and Churn are represented in Order Type, specifically for Renewals Managers, and how to interpret common scenarios in Salesforce.
---
### Order Type values relevant to Renewals
From a Renewals perspective, the key Order Type values are:
- Growth – Renewal or add-on that maintains or increases ARR.
- Contraction – Renewal or add-on that reduces ARR but the customer is still active.
- Churn - Partial – Final outcome when some subscriptions in the Account Family churn but others remain.
- Churn - Final – Final outcome when all subscriptions in the Account Family churn (no remaining active subs).
- PS / Other – Non-recurring or technical transactions that typically do not impact ARR (for example, certain credits or one-time services).
(See the Sales Terms Glossary for full Order Type definitions.)
---
### How Renewal opportunities flow through Order Type
For Renewal opportunities:
1. While open or Closed Won with negative Net ARR
- Order Type = Contraction.
- This indicates a downsell: lower ARR than the prior term, but the customer is still present.
2. When moved to Closed Lost with negative Net ARR
- Order Type transitions from Contraction to:
- Churn - Final if the Account Family has no remaining active subscriptions after the associated subscription end date.
- Churn - Partial if the Account Family still has one or more active subscriptions (for example, one entity or product line churns while others remain).
3. Positive or flat Net ARR renewals
- Positive Net ARR → Growth (renewal upsell).
- Net ARR = 0 but recurring amount remains > 0 → Growth (flat renewal).
4. Non-standard / PS-only renewals
- Some technical or non-recurring renewals (for example, PS-only corrections) may be classified as PS / Other.
---
### Common Renewal scenarios
Scenario 1 – Standard positive renewal (upsell)
- Renewal opp with Net ARR > 0 compared to prior term.
- Expected Order Type: Growth.
Scenario 2 – Flat renewal
- Renewal opp with Net ARR = 0, but recurring amount remains > 0.
- Expected Order Type: Growth (flat renewal).
Scenario 3 – Downsell but still a customer
- Renewal opp with Net ARR < 0 (for example, seat reduction or downgrade).
- While open or Closed Won:
- Expected Order Type: Contraction.
- The customer is still active; this is not full churn.
Scenario 4 – Full churn
- Renewal opp with Net ARR < 0, moved to Closed Lost, and there are no remaining active subscriptions under the UPA after the subscription end date.
- Expected Order Type: Churn - Final.
Scenario 5 – Partial churn
- Renewal opp with Net ARR < 0, moved to Closed Lost, but there are still active subscriptions under the UPA.
- Expected Order Type: Churn - Partial.
---
### How Renewals Managers should use Order Type
Use Order Type to:
- Distinguish:
- Healthy / expanding renewals (Growth),
- At-risk / downsell renewals (Contraction),
- True churn (Churn - Partial / Churn - Final).
- Understand:
- Where churn is driven by a single subscription vs the entire hierarchy.
- Where Renewal outcomes may require follow-up with Sales Ops or Sales Commissions (for churn exceptions, etc.).
Order Type is not the only input to compensation; for churn exceptions, follow the Sales Commissions process.
---
### If Order Type looks wrong on a Renewal
1. Check core renewal fields
- Type (Subscription Type) – Confirm the opportunity is a Renewal, not mis-labeled as New Business or Add-On.
- Net ARR – Confirm Net ARR is correct relative to the prior term.
- Opportunity Category – Confirm it is a standard Renewal category (not Decommission, Credit, etc.).
2. Check the customer state
- Are there still active subscriptions after this renewal’s end date?
- If yes and the renewal is Closed Lost with negative Net ARR → expect Churn - Partial.
- If no and the renewal is Closed Lost with negative Net ARR → expect Churn - Final.
3. Check timing
- If the opportunity’s status or related subscriptions changed very recently, allow up to 24 hours for nightly jobs to update account-level rollups that influence churn classification.
4. When and how to escalate
- If, after the above checks, Order Type still looks incorrect:
- Open a Sales Operations case using the Request Support process in Salesforce:
- From the Renewal Opportunity, click Request Support.
- Select Sales Operations as the team.
- Choose the appropriate Request Type (for example “Order Type” or “Opportunity Data Review”).
- In the description, include:
- Prior term ARR and new ARR,
- What you believe the correct Order Type should be,
- Subscription details (for example, which subs are still active).
This follows the Requesting Internal Support in Salesforce workflow and the Go To Market RoE guidance that Order Type changes should be requested via Request Support → Sales Ops on the opportunity.
## Churn Exceptions
- Churn exceptions are possible, but not guaranteed. Each circumstance will be considered independetly. Some common scenarios considered for churn exceptions are:
