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Forrester Adopts New Methodology to Minimize Performance Decline

New calculation masks deterioration in key metric.

March 28, 2024

Forrester Research, Inc (FORR), a research and consulting firm, changed how it calculates a key metric to mask year-over-year (YoY) deterioration. Characterized as a minor modification, Forrester changed how it calculates customer Contract Value (CV).

Previously, Forrester annualized the ratable revenue portion of our CV subscription products, while the entitlements included in the subscriptions (representing approximately 10% of the subscription) have been included in CV at their total value, as all entitlements in the contract were available for use during an annual period.

The new calculation annualizes the entitlements for contracts greater than one year.

We suspect the change— which revised last year’s CV lower— was made to minimize the YoY decline in CV.

The new methodology reduced 2022 CV by $8 million, or 2.26%.

Lowering the YoY comparison allowed Forester to report a 3.8% CV decline in 2023.

Under the old methodology, Forrester would’ve reported a 6.02% YoY CV decline.

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