Forrester Research, Inc. (NASDAQ:FORR) Q3 2023 Earnings Call Transcript

Anja Soderstrom : Yes. No. And in terms of the clients that have transitioned to Forrester Decisions, you’re talking about the wallet retention and retention rate is higher than the overall. Did you say to what magnitude that is?

Chris Finn: Yes, from a client retention standpoint, it’s approximately 12 points higher on FD than it is for the overall platform. The overall — sorry, overall business.

Anja Soderstrom : Okay. And then in terms of the AI addition to your platform, how much of an upsell is that?

Carrie Johnson : Actually, Anja, it’s Carrie. Izola will be included in the Forrester Decisions product line and not included in our heritage line.

George Colony : So again, more incentive to migrate.

Carrie Johnson : More incentive to migrate, correct.

Operator: And I show our next question comes from the line of Vince Colicchio from Barrington.

Vince Colicchio : Yes. Curious what caused the sequential decline in sales. Was that voluntary, involuntary? What does that look like?

Chris Finn: Sorry, you mean on sales headcount?

Vince Colicchio : Yes, yes. Sorry.

Chris Finn : Got it. It’s down slightly. I don’t know, Nate, you want to comment on that?

Nate Swan : Are you talking from Q2 to Q3 post reduction in force?

Vince Colicchio : Yes.

Nate Swan : Okay. Post production in force, we’ve had just slight declines. We’re in the process of actually adding back in headcount right now. So actually, opening up a lot to — for backfill. So we’re excited about that. We’re looking forward to continuing to grow our sales force. We need to invest in the right areas, and the right areas really are around new business development. That’s part of the reason Carter is here is getting focused on the end user opportunity that we see out here. We’re already very good capturing the midsized vendors. We’re going to get really focused on how do we capture more user clients. So we will be focused in that area and adding headcount in that area. So right now, we’re just down due to attrition, but we are bringing those back up. And we don’t anticipate going lower than what we are right now.

George Colony : And Vince, attrition is very low. It’s in the single digits.

Nate Swan : Single-digit attrition.

George Colony : So kind of historically low attrition.

Vince Colicchio : And Nate, how are you feeling about the important process of selling more to more senior people, clients and prospects? Is that progressing as you had expected?

Nate Swan : Yes, I think so. I mean, it’s a journey that we go through. There is — it’s a different model that we’re selling to events or different sets that we’re selling to. So that’s a change in skill set. But the sales force is reacting really well to that. They want to be where we’re going. They want to have more senior-level relationships. And they are enjoying doing the skill building to get there. We’re also doing this. We got great feedback back from our Board of clients that, that was the value that they see in working with Forrester is better alignment across their teams. These are some of the most senior executives at rather large organizations. And they specifically look to Forrester to understand what’s happening in their organization because we can connect that all together for them. So it’s not just that we think this is something that’s good. Our clients are telling us that this is good as well.

Vince Colicchio : And Chris, on the decline in clients, small clients is obviously the key driver there. How large is the small client base as a percentage of the total now?