George Colony - Chairman and CEO Kelley Hippler - Chief Sales Officer Michael Doyle - CFO.

Vincent Colicchio - Barrington Research Allen Klee - Sidoti & Company Tim McHugh - William Blair and Company.

Good afternoon. Thank you for joining today's call. With me today are George Colony, Forrester's Chairman of the Board and CEO; Kelley Hippler, Forrester's Chief Sales Officer; and Mike Doyle, Forrester's Chief Financial Officer. George will open the call. Kelley Hippler will follow George to discuss sales.

Mike Doyle will then follow Kelley Hippler to discuss our financials. We'll then open the call to Q&A. A replay of this call will be available until November 24th, 2017, and can be accessed by dialing 1-888-843-7419, or internationally 1-630-652-3042. Please reference the passcode 9333442#.

Before we begin, I'd like to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, believes, anticipates, intends, plans, estimates or similar expressions are intended to identify these forward-looking statements.

These statements are based on the Company's current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements.

Some of the important factors that could cause actual results to differ as discussed in our reports and filings with the Securities and Exchange Commission. The Company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise.

I'll now hand the call over to George Colony..

Welcome to Forrester's Q3 2017 Investor Call. I have several short updates on the business, then, I'm going to hand the call off to Kelley Hippler, the company's Chief Sales Officer. After Kelley's sales update, Mike Doyle, Forrester's CFO, will give a financial review of the quarter, and the three of us will then take questions.

In the quarter, the company's revenue was at the upper end of guidance, and its operating margin and earnings per share exceeded company projection. Strong revenue performance in our Connect business, reprints, advisory, and events were the primary drivers of the better-than-expected revenue.

Expenses were below targeted levels as we leveraged the customer engagement model to drive productivity in our selling organizations. On October 6, we announced that Forrester experienced a cybersecurity incident. The attack resulted in the theft of reports from a research database. Our systems were able to respond to the intrusion.

This is now a reality of doing business for all companies. The test is how firms will respond and communicate following an incident. Our security and risk analyst guided us as we followed our research playbook on mitigating the effects of an incident.

In addition, we continue to work with leading cyber technology providers, top forensic firms, and law enforcement to strength and protect the company assets. Turning back to the quarter, Kelley Hippler hit the ground running in Q3, and she continues to drive the new selling model forward. Almost all of the premier teams in the U.S.

are now stood up, and the core selling team is nearly at full force. We have moved into our permanent Nashville office with expansion room for additional sales and operations personnel to be added over the next two years, and Kelley is going to give more detail in a few moments. As you know, we are working to grow our base of user clients.

Several signals in the quarter demonstrated progress on that front. The user renewal rate for research was up 10% in the quarter. And year-to-date user renewal rates are up four points. We believe that the premier selling model which dedicates three executives to each account is the primary driver for these improvements.

In addition, the company is sharpening its research offerings for users. Cliff Condon and team are now rolling out a fully redesigned portfolio of vendor research artifacts. New Tech analyzes the emerging technologies, like AI. Now Tech addresses mature technologies like CRM.

We have launched New Wave, a ranking of emerging tech vendors guiding users to the best offering in nascent technology markets. In addition, we are introducing Waves that rank the offerings of user companies. And the first two will analyze online retail and online banking. And if you're at all interested, Home Depot is ranked as the leader in the U.S.

online retail Wave. Interestingly enough, Amazon was ranked at number seven. These Industry Waves signal to user companies how their business technology, the technology systems and processes to win, serve, and retain customers is being received in the market. The higher ranking on a wave indicates better BT.

Staying on the user business, the fastest growing product for Forrester in 2017 has been our Executive Program. And this is a one-on-one coaching relationship between a Forrester expert and CIOs and CMOs. We are currently sold out of this product for 2017, and we're making plans for expansion in 2018.

When this product deepens a relationship between companies in Forrester it cements our role as a trusted advisor. Turning to digital, in the fourth quarter Forrester will rollout digital front-ends for the entire line of data products.

As part of this effort version 2 of the Digital Customer Experience Index will be released increasing the analytical capabilities of that product. As an example, the new version includes a return on investment simulator which estimates the impact of experience improvements on revenue growth.

It also includes a holistic view of experience metrics correlating CX Index with Net Promoter Scoring and CSAT, customer satisfaction scores. While I'm on digital, you may have noted that Forrester launched an app called Tap, that's T-A-P, a few weeks ago.

This is an experimental free product for consumers that enables them to give real-time continuous feedback on locations like Starbucks, and brands like Amazon. We are currently working with a number of clients on delivering real-time customer experience data. The ability for companies to hear and respond to immediate feedback generated from Tap.

Forrester believes that as customer empowerment increases and the war for customer experience intensifies companies must have the ability to improve experience in hours or minutes to show that they have the agility, will and obsession to deliver immediate improvements to their experience.

Now Tap is a foray into developing real-time customer experience data for corporations. And you can download Tap for free on iOS and Android. Just search for Forrester Tap on the App Store or on Google Play.

If you want to see Tap in action, search on the Marriott Marquis in San Francisco under locations in the app, and you're going to find a bunch of Taps, several Tap Mobs, and one of the Mobs that has been responded to by the Head of Customer Experience at Marriott. Again, the app is experimental, and we are still developing the business of Tap.

There has been no monetization of this product to date. And finally, you may be wondering, why are you doing this. Forrester has always been in the forefront of how customer experience changes the destiny of companies. And we believe that real-time is the next phase. So thanks for being on the call.

And now I'd like to hand it over to Kelley Hippler, Forrester's Chief Sales Officer.

Kelley?.

Thank you, George. Q3 was an exciting quarter for the Forrester sales organization. We continued standing up teams in our customer engagement model, which has two selling motions Premier and Core.

As a reminder, Core consists of our smaller clients who buy a limited set of the Forrester portfolio and are largely sold to and serviced by our inside sales team based in Nashville. In addition, we are maintaining a hub presence in both Cambridge and San Francisco for local clients.

The Core segment continues to deliver strong results, and the team is very excited to be in our permanent office space in Nashville. Premier is comprised of our largest clients who deploy the more complex solutions that Forrester has to offer. We stood up our final four North American premier user teams in the customer engagement model this quarter.

Now all North American premier user teams are operating with client executives who are driving the overall account strategy, customer success managers who are responsible for engaging our clients and ensuring that they are receiving value for their existing Forrester relationship, and solution partners who work with our client executives to drive enrichment across the Forrester portfolio.

Three roles are working in concert, which is enabling us to deliver on our vision of helping business and technology leaders develop customer-obsessed strategies that drive growth. We are also seeing synergies across these roles that will lead to greater efficiencies in how we manage our territories.

In addition, we had our first European user team enter the model, and based on the initial results and positive customer feedback, we're also piloting this model with two of our U.S-based premier vendor teams.

We continue to be encouraged by the results on the engagement front when comparing the Q3 performance of the teams in the model as of April 1, versus prior year, we saw an increase in renewal rates of 10.2%, and a 3.6% increase in share of wallet.

Underpinning the customer engagement model is the Ideal Client Profile or ICP that defines which industries we focus on, we are leveraging this information to optimize territory design and resource deployment, for example moving forward our new business teams will only sell to ICP targets as we know that these accounts will bring a higher lifetime value to Forrester than those that fall outside the ICP.

As we work to finish the year out on a strong note, we are fine-tuning key processes and targeted headcount levels that will support our efforts to deliver consistent, predictable results in 2018 and beyond. With that, I will turn the call over to Mike Doyle to review our Q3 financial results..

Thanks, Kelley. I'll now begin my review of Forrester's financial performance for the third quarter of 2017, including a look at our financial results, the balance sheet at September 30, our third quarter metrics and the outlook for the fourth quarter and full year 2017.

Please note that the income statement numbers I'm reporting are pro forma and exclude the following items, stock based compensation expense, amortization of intangibles, reorganization costs and net gains and losses from investments.

Also for 2017, we continue to utilize an effective tax rate of 40% for pro forma purposes, for the third quarter of 2017, Forrester delivered revenue near the top end of our revenue guidance and exceeded pro-forma margin and earnings per share guidance.

We experienced solid revenue growth in our content marketing, reprints, events and connect offerings. Our operating margin benefited mainly from lower than targeted headcount. We continue to exceed our targeted financial performance while we're working on significant initiatives within the company.

Kelley updated you on the progress of our CEM initiatives, which is tracking ahead of our original schedule. We are beginning to see the benefits of our customer engagement model in our client retention rates.

We continue to invest in product innovation with enhancements to our data products scheduled to roll out in the fourth quarter, in addition George spoke about our tap product and we have a number of digital improvements in the works for other products which we will have in the market in 2018.

Now, let me turn to a more detailed review of third quarter results. Forrester's third quarter revenue increased by 4% to $80.4 million from $77.4 million in the third quarter of 2016 and increased 3% on a currency adjusted basis.

Third quarter research services revenue increased by 3% to $54.2 million from $52.7 million last year, on a constant currency basis research revenue increased 2% and represented 67% of total revenue for the quarter.

Third quarter advisory services and events revenue increased by 6% to $26.1 million, and $24.7 million in the third quarter of 2016, and by 5% with constant currency, and represented 33% of total revenue for the quarter.

Our international revenue mix was 24% compared to 23% in the third quarter of 2016 and remain unchanged at 23% on a constant currency basis. I would now like to take you through the product activity behind our revenue starting with Forrester Research.

Forrester's publish research and decision tools enable clients to better anticipate and capitalize on the disruptive forces affecting their businesses and organizations, we believe Forrester Research provides insights and frameworks to drive growth in a complex and dynamic market.

In the third quarter of 2017, Forrester's Research Library included 57 play books, the addition of 341 new documents and we hosted 35 webinars for our clients. As of September 30, 2017 the top three research roles with CIO with 7339 members, application development and delivery with 4621 members and analyst relations with 4326 members.

Onto our Forrester Connect offerings which encompass our leadership boards and executive programs. Forrester Connect offerings are designed to help clients connect with peers and Forrester's products and professionals and to coach executives to lead far reaching change within their organizations.

As of September 30, 2017 Forrester Connect had a total of 1433 members down 1% compared to last year and flat to the second quarter of 2017. Leadership boards declined slightly for the quarter due to shutting down one council and migrating members to our BT strategy Council.

George mentioned executive programs had strong growth for the quarter and year-to-date performance is strong as well. Our data products and services are designed to provide fact based customer insights to our clients. Clients can leverage our data products and services or choose to have us conduct custom data analysis on their behalf.

But the third quarter revenue increased by 4% driven by our CX index and consumer technocratic offerings. Forrester consulting which includes our advisory and consulting business, so our total revenue for the third quarter increased 2% driven by content marketing and advisory delivery.

We mentioned on last quarter's call that we anticipated a slowdown in strategy consulting backlog production and this resulted in a decline in revenue in that segment of our business in the third quarter.

We also expect residual effects in the fourth quarter as we work to fine tune our sales motion and consulting value proposition aligned to return growth to this segment Forrester had three events in the third quarter of 2017. In Asia Pacific we held our customer experience form in Singapore. In the U.S., we held two events in Washington D.C.

our customer experience form and our new form on privacy and security. Events revenue increased by 158% year-over-years we're pleased to see balance and consistent improvement in both attendance and sponsorship in this segment. We'll now highlight the expense and income portions of the income statement.

Operating expenses for the third quarter increased by 5% as reported and on a currency adjusted basis and were $71.2 million compared to $67.7 million the prior year.

Cost of services and fulfillment increased by 9% as reported and with constant currency due to higher headcount increased outsource expenses and a higher form expense related to the additional US for in this year. Selling and marketing expenses increased by 6% and increased by 5% with constant currency driven by higher headcount and merit increases.

General and administrative costs decreased by 3% and increase by 4% with constant currency due to lower professional services costs. Overall headcount increased by 3% compared to the third quarter of 2016 and decrease 1% compared to the second quarter of 2017.

At the end of the third quarter we had a total staff of 1,374 including a research and consulting staff of 510 and the total sales force of 530. Research and consulting headcount increased by 5% compared to the third quarter of 2016 and decreased by 2% compared to the second quarter of 2017.

Total sales force increased by 3% compared to the third quarter of 2016 and decreased by 1% compared to the second quarter of 2017. Operating income was $9.1 million or 11.4% of revenue compared with $9.7 million or 12.6% of revenue in the third quarter of 2016. This is a decrease of 6% year-over-year.

Other income for the quarter was 146,000 compared to 229,000 in the third quarter of 2016.

Net income for the quarter was $5.6 million and earnings per share was $0.31 on diluted weighted average shares outstanding $18.1 million compared with net income of $6 million and earnings per share of $0.32 and $18.4 million diluted weighted average shares outstanding in the third quarter of 2016.

And now reinforces third quarter metrics provide more perspective on the operating results for the quarter. Agreement value this represents the total value of all contracts for research and advisory services in place without regard to the amount of revenue that has already been recognized.

As of September 30, 2017, agreement value was $237.8 million down 1% from the third quarter of 2016 and flat on a constant currency basis. As of September 30, 2017 our total for client companies was 2,393 down 4% compared to last year and down 1% compared to last quarter.

Client count unlike our retention and enrichment metrics is a point in time metric at the end of each quarter. Forrester's retention rate for client companies was 76% as of September 30, up one point compared to last quarter and flat compared to last year.

Our dollar retention rate was 88% up 1 point compared to last quarter and flat compared to last year. Our enrichment rate was 94% for the period ending September 30, 2017, flat compared to last quarter, and down 1% compared to last year.

We calculate client and dollar retention rates and enrichment rates on a rolling 12-month basis due to the fluctuations which can occur between quarters with deals that close early or slip into the next quarter. The rolling 12-month methodology captures the appropriate trend information. Now, I'd like to review the balance sheet.

Our total cash and marketable securities at September 30, 2017, was $134 million, which is a decrease of $4.1 million from a $138.1 million at year-end 2016. Cash from operations was $10 million for the quarter as compared to $6.9 million in the third quarter of last year.

We received $9 million in cash from options exercised for the quarter as compared to $5.8 million in the third quarter of last year. We repurchased $3.5 million of stock during the third quarter, and we also paid a dividend of $3.4 million, or $0.19 per share during the quarter.

Accounts receivable at September 30, 2017 was $39.5 million compared to $36 million as of September 30, 2016. Our day sales outstanding at September 30, 2017 was 45 days compared to 43 days at September 30, 2016. The accounts receivable over 90 days was 6% at September 30, 2017, compared to 8% at September 30, 2016.

Deferred revenue at September 30, 2017 was $132.9 million, an increase of 5% compared to September 30, 2016. In closing, we had a really good quarter, finishing at the upper end of revenue guidance, and exceeding operating margin and earnings per share guidance.

Our financial performance for the first nine months of 2017 has consistently run ahead of our expectations, which is a credit to the Forrester team for achieving this while executing against a number of significant initiatives. Kelley provided insight in her first 90 days as CSO, which has been productive.

The CEM rollout continues at a good pace, and we're beginning to see tangible benefits in our customer retention metrics. We continue to refine and improve our selling motion as we stand up new sales teams, and are confident this will have a meaningful impact on growth in 2018.

We continue to pursue an ambitious agenda to digitize our products and innovate where we see opportunity. We believe the changes we are making and the new products we will be introducing to the marketplace will enable us to grow our business at a faster rate moving forward.

Based on our performance in the first three quarters of 2017, we've adjusted our full-year revenue and EPS guidance upward. Now let me take you though the specifics of our guidance for the fourth quarter and full-year 2017.

As a reminder, our guidance excludes the following, amortization of intangible assets, which we expect to be approximately $200,000 for the fourth quarter and approximately $800,000 for the full-year 2017, stock-based compensation expense of $2 million to $2.2 million for the fourth quarter, and $8.4 million to $8.6 million for the full-year 2017, and any investment gains and losses.

Forrester is providing fourth quarter 2017 financial guidance as follows; total revenues of approximately $83 million to $86 million, pro forma operating margin of approximately 9.5% to 11.5%, pro forma effective tax rate of 40%, and pro forma diluted earnings per share of approximately $0.27 to $0.31.

Our full-year 2017 guidance is as follows; total revenues of approximately $330 million to $333 million, pro forma operating margin of approximately 10.5% to 11.5%, pro forma effective tax rate of 40%, pro forma diluted earnings per share of approximately $1.17 to $1.21.

We've provided guidance on a GAAP basis for the fourth quarter and full-year 2017 in our press release and 8-K filed today. Thanks very much. And I'm now going to turn the call back over to the operator for the Q&A portion of the call..

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Vincent Colicchio from Barrington Research. Please go ahead..

Yes, Kelley, I was wondering if you could talk a little bit about the regions you oversee in terms of ones that may have stood out or performed weakly versus expectations?.

Sure, Vince. Thank you for the great question. I actually had the pleasure of visiting five of our different offices as we stood teams up over the course of Q3. We had several regions that performed very well in the quarter. Our premier vendor in U.S. government team continues to perform very well, our core team as I mentioned.

And then what I would say is within some of our user teams we're seeing more sort of a bifurcation where those teams that have been in the model a little bit longer are outperforming those that have not, which leaves us very encouraged.

So while we're not all the way where we want to be with some of our user teams, we are seeing improvement in terms of distribution across those teams..

And then you mentioned that you've got the first team on the new model in Europe.

I'm wondering how that performance compares to what you've seen in the U.S.?.

Sure. So we just stood up our premier European team at the beginning of September, so we'll have much more information on that on our next call because it is early days there. What I will say is the team was very excited and has embraced the model.

And I think one of the things that we've seen as we've done these subsequent rollouts is by the time we get to a team at this point they've heard about the model, how it's working. And we're finding that teams are making that transition much more quickly. So I do expect to have some positive feedback on that when we get to our call after Q4..

And then, Mike, you'd mentioned that the consulting business continued to have some weak pieces and you'll see a residual effect.

Are you confident that the areas of weakness or the strategy will get ironed out and we'll see good growth, say, next year?.

Yes, I am, Vince. I think that we saw the backlog that was diminishing, and we highlighted in on the second quarter call. And I think it's a function of a couple of things. As we've moved into the new customer engagement model we have changed the way we sell our products and services; consulting is one of those.

So I think we're seeing growing pains there. And we are continuing to refine the consulting value proposition and trying to look at where we best fit. We have strength in a number of areas, and we have some of our consulting practices that are doing exceptionally well. So I think we're going to continue refine and improve that.

Yes, I do expect we'll see growth in that product next year..

Okay. I'll go in the queue. Thank you, guys..

And our next question comes from Allen Klee from Sidoti & Company. Please go ahead..

Yes, hi. So you talked that in as of April for the premier teams' renewals were up around 10%. Can you give us some perspective? I'm assuming not that many clients are renewing at this time of year.

Maybe an idea of how much renews towards the end of the year or the beginning, so how much we can think about how that could provide an impact to next year. And then on the retention rates, kind of what we can think about to get improvements in renewals, and wallet share and enrichments. Thank you..

Sure. I'll tackle this first, and then I think that Kelley can add color. So the 10% improvement of renewal rate was for those deals that were renewing in quarter. So that metric was, we saw a 10-point improvement in our core research renewal, so that's encouraging.

And I think overall, and Kelley can talk about it and give the color on improvement in retention of the team's in model. And on a year-to-date basis in our core user research, end-user research which was George referencing, we're up four points. So that's all good. Our biggest renewal quarter is still the fourth quarter.

So we are coming into sort of the quarter that defines how we roll into next year. That said, we have moved a lot, I think we've talked about, into Q1. But it still remains our biggest quarter. In terms of tackling -- so I think to finish the point on retention, our goal is to rollout the customer engagement model to all appropriate teams.

And we think that's going to have a really positive effect on retention as we move forward. As we get into enrichment, Allen, I think the bigger burden there falls to the product enhancements we're looking to do.

And that -- we're adding some, which George mentioned, in Data, we're sort of doubling down in basically all five of our data products will see major enhancements in this quarter. And we're on version 2 of enhancement to the CX Index. We're also looking at a number of product digitizations across our research products.

So we have a lot moving that way, and I think that's going to help us a lot to enriching the clients that we have. So I think that's going to be, as we progress through the years, steady improvement. And as a reminder, those metrics are rolling 12.

So even as Kelley makes improvements, and we saw good improvement in this quarter, the impact on retention rates on a rolling basis is modified and tempered a bit because it's a rolling 12-month metric. .

And just to add to that -- sorry. Our customer success management team has some predictive analytics. So they're working on leading indicators of things around engagement, around things like readership, enquiries, webinars, and event attendance. And month-over-month, we continue to see those metrics trending in the right direction.

And I think as long as those continue to trend positively we'll continue to see that filter into the renewal retention results as we move forward. So we've been focused on leading indicators with the CSMs, and we'll expect to continue to see that filter into our renewal retention rates, especially in Q4 which is still our biggest quarter..

Thank you.

And then strategies to sell more to your Chief Investment Officer type customers, could you comment on that?.

Allen, we still don't have a formal to go after that market. That said, we do have some investment banking houses who buy our research. But we haven't designed a product to go after that segment specifically. And we don't have plans to do that….

I apologize. I meant CIO type customers. Sorry..

All right, well, that's different..

Sorry..

There we have products..

So, Allen, George here. I talked about this vendor, the new portfolio vendor artifacts. We were covering what we now call Now Tech extensively, we have 80 waves.

But now we're extending the waves into what we call New Tech because as you see technologies accelerate companies have to move at very, very fast rates we're having to take risks on very, very new technologies and technology vendors. And so expanding the waves into the New Tech space we think is going to be a very, very big benefit for the CIOs.

This part of it was actually designed with CIOs. They actually work with us around how to actually build that artifact. And the biggest risk for them is these small vendors, are they going to be here two years from now, are they well-funded, are they well staffed, who's behind them.

So we think the vendor artifacts are really going to -- this is a very good new value for our CIO clients..

Okay. Thank you.

Can you talk about how adding the new board members you think is changing the way you're running your business?.

Yes, so we had a Board meeting yesterday. I think it's -- look we had a very good Board previously. But we're hearing new voices, I think new ides. They are younger. They're Silicon Valley. They're pushing the hell out of us around innovation, around speed. I mean they're just pushing hard on speed.

And I will tell you, Allen, that we're not finished on this Board changeover. We're considering several other Board members as well. So I think this has been a very, very good move for us.

Not only the Board meetings, but also in between Board meetings they're buddied up with members of the executive team, so they're -- new wisdom and new thinking is a new coaching from them. So that's my view.

I don't know if you have any views on this, Mike?.

I would say that I agree with you. I think that all of the Board members, that they've been nice addition. I agree the previous Board members were very good. I think this -- it's just a nice change. It's brining new and fresh thinking into our discussions. I agree their push for speed; I think they are challenging us more.

And I think, yes, people with different backgrounds and perspectives that are helping us sort of change our thinking a little bit. So I'm very encouraged by it, Allen..

Allen, there are also new connections in the world they're making for us. They're making many more connections back into the West Coast, into startups, into venture. And that's all, I think, very good for us..

Okay. Okay, thank you very much..

Thanks, Allen..

And our next question comes from Tim McHugh from William Blair and Company. Please go ahead..

Hi, thanks. Just kind of one question; I guess my other ones were asked, but the contrast I guess you talked possibly about retention, and I think it's rolling 12 months, but there's some improvement in that metric, yet client accounts were still weak.

So, is the difference to kind of the new sales still lagging, or can you kind of bridge that gap and talk about the dynamic?.

Yes, Tim, I think that what we -- there's an interesting phenomenon, I think this is the result of when Kelly came in, and I think she's taken an approach to a number of our smaller clients where we -- and by small I mean their dollar value with us not necessarily the size of client, which I plot.

I think it was the right move where we're looking at their business is low engagement business and it cause -- it causes a lot of churn and we've made a conscious decision there like Kelley describe what she's done.

That it's going to create a little bit of noise in client count over the next couple of quarters, but in terms of the long-term benefit in value to the business I think it's absolutely the right move. So, I'm to turn over to Kelly and let her tackle that one..

Thanks, Mike, and just to add to that this really is where the ITP strategy comes into play. We feel as though we can add a lot more value two clients that are within those key verticals that we serve and want to focus much more on deepening those relationships.

And we're doing that in some cases at the expense of some of the smaller relationships we had with companies that were not a great fit for Forrester.

We probably weren't adding a lot of value for them which was reflected in the low investment rate so, it really is about focusing our sellers time which is one of the most precious resources we have on those accounts where Forrester can do the most to help those companies..

And as we look at the data so 90 days in when Kelly made the decision what we saw Tim is that the amount of non renewals for clients that were less than 25K in terms of their dollar relationship with us drove a lot of that activity and we're okay with that going away and that's a conscious decision on Kelly's part.

And makes she wants her team focused on where they can add the greatest value focusing on those verticals that we think have the greatest benefit to Forrester, so I think it's the right move for us.

It's a more targeted and focused move from a sales perspective that I think is going to reap rewards forces we go as we work out over the next 12 months..

Okay, thanks..

And it looks like we have Allen Klee back on with a question. Please go ahead..

Yes, hi.

Can you expand on your comment of how you better leverage the expenses during the quarter?.

Yes, I mean, it primarily came in headcount Allen versus what we what we had targeted for the quarter so well it's up year-over-year if you look at key headcount in research and in sales we're down quarter-over-quarter.

Some of that is very much by design and I think Kelly's been in 90 days shaken a hard look at it and I think her focus around aligning territories and reps to basically enhance rep productivity caused her to hit the pause button appropriately on one bringing a new headcount and let her describe what she's doing but I think this is a very good move for us.

So, we reap the benefit in terms of expense I mean ideally where we're hoping to go what this is and where Kelly wants to go with it is better alignment and tighter territories reach which will yield greater productivity..

Great.

And great question, Allen, and just to build on that, there are sort of two aspects to this; one of the things that we have discovered as we've moved into the model, quite frankly, it's how much time our sellers are actually spending servicing accounts and with more of their time freed up from the day-to-day because we now have the customer success managers taking care of that.

We're finding that we're able to expand their portfolio and still and drive productivity at the same time. Another thing that we haven't really talked about but has been essential to this entire migration is we have an ongoing technology track internally here at Forrester that is designed towards sort of taking the stand out of the gears.

Identifying those tasks and those activities that take a lot of time but aren't value add and we've been working to knock those down increase the automation for our sellers and those folks who engage our clients so, we are expecting that over time we are going to be able to drive up the productivity of the heads we have here moving forward and that's where we're going to focus first and that's why you might not see those numbers at the same rate that you've seen historically..

Okay.

And lastly, so do I imply from this that the original target of 7% to 10% growth in sales force should be thought to be tempered back?.

Yes, I think that's a fair assumption. I think that -- you know, I don't think we -- I think we will have more color certainly as it relates to next year on the February call, because Kelley is getting her arms around this right now and figuring out how she wants to best move forward to drive productivity and top line growth.

And I think her view is that just continuing to add sales headcounts isn't necessarily the best formula for us to drive growth. At finish, we won't add sales headcount, but I think she is going to be measured in her approach.

So, yes, for this year I think it's safe to say that we are not -- you're not going to see a big fourth quarter blitz to add headcount. That's not going to happen for us..

Thank you very much..

You are welcome..

Thanks, Allen..

And it looks like we have no further questions..

Okay, great. Thanks everyone for joining the call. We look forward to seeing folks in route on the road, and looking forward to very good fourth quarter. Thank you..

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect..