5 Steps to Secure the Right Budget for a Well-Resourced Customer Success Team Image

5 Steps to Secure the Right Budget for a Well-Resourced Customer Success Team

The value of customer success cannot be overstated. A highly focused, strategic, and well-supported Customer Success team can affect everything from your product to Net Revenue Retention (NRR).

Unfortunately, as a relatively new addition to most organizations (compared to Marketing or Product), CS is often a lower priority during budgeting season. It’s a mistake that we’ve seen made consistently over the last 10 years. Part of it is an effort to maximize the bottom line, which makes sense for any business. However, a common yet dangerous reason an adequate budget isn’t allocated for CS Operations is that companies and organizations don’t fully understand the value — particularly when it comes to the impact it has on revenue optimization.

Today, it’s imperative to prioritize the proper budget for Customer Success. As a CS leader you comprehend the essential value of CS, but how do you get executive leadership to agree and buy in? Here are some steps to ensure you get everything you need to build a well-resourced Customer Success team.

1. Identify the Impact of Your Team

Customer success drives revenue growth in ways that other functional teams simply cannot. We know it contributes significantly to the retention and expansion of your current customer base. But, perhaps, more importantly, it does so at a much more cost-effective rate.

For example, SaaS companies invest a huge amount of money in their Marketing and Sales to acquire new customer logos every year. The money spent on those efforts usually takes more than a year to earn back. Your company waits more than a year to see a return on that spend. 

Customer success impacts your NRR in a much shorter period of time. Plus, it does so without requiring as much upfront costs to your company. Every dollar invested in CS goes further than those invested in Sales and Marketing. 

The first step of securing the right budget for your Customer Success team is to identify your specific impact on your company’s NRR. Don’t get too caught up focusing on churn metrics, retention numbers, and other standard metrics. instead, center your attention on NRR. It will reveal the true performance of your company.  Be ready to answer questions like, “What did your team do to impact the NRR of last year? What did it cost? What growth is possible with your proposed budget?” 

Compelling answers to these questions, along with the data to support your proposal, will help illustrate the ROI your organization can expect. Provide this information, and it will be easier to advocate for and receive the budget you need to create a fully resourced CS team. 

2. Decide on Your CS Operations Goals 

To imagine what is possible for your coming fiscal year, the most obvious step is to arm yourself with performance and revenue metrics from the previous. While some organizations may push for a simple percentage of growth for the next year, try to think about growth in a more nuanced way. The details keep your team focused on the exact efforts, and provide guides for how much budget you’ll need and why. 

Let’s go back to the metrics you outlined in the previous section. The budget you need for metrics such as reducing churn, improving customer sentiment, and scaling your CS efforts is pretty straightforward. But that’s only a small portion of the impact of customer success. Consider Time To Value (TTV). Improving TTV requires a combination of operational strategy, comprehensive tools, and relationship-building from your CSMs. The way you approach TTV for each customer will be different. As a result, the budget required won’t be as simple to calculate. 

Historically, CS budgets are underfunded. As you calculate what you’ll need to achieve your annual goals, remember to consider the complex nature of your team’s work to drive each new goal. Contemplate the extra strategic hours for CS Ops, standardizing processes, and scaling. Make sure to budget accordingly and don’t risk leaving your team underfunded, particularly if you’re after aggressive new goals.

3. Think About Your Team Members

Gainsight is a human-first organization. To us, that means supporting each and every team member as much as possible. Of course, that includes salaries, but it also means investing in operational support and teammate success. The truth is that customer success will not thrive or add to NRR without healthy, educated, and engaged employees. Teammate success is a human-first philosophy that has to exist throughout the organization. 

Your budget should include a percentage increase for salaries, incentives, and other items to foster your team morale. However, if you don’t have money allocated for developing CS Operations this year, add it immediately. Your CSMs need an internal strategic partner who can see their efforts as a big picture and find opportunities to iterate and improve systems. In terms of your budget, it may mean months of surge spending for recruiting and onboarding new talent. You may also need money for scaling operational efforts to meet the goals you’ve identified. 

Try creating a business case for your CFO that outlines what ROI to expect with the extra allocated budget to operationalize your CS practices. Show the difference in NRR if your team remains the same and what is possible with the addition of a CS Ops manager. The compounding growth that occurs with the suitable investments in CS Ops personnel is unmatched in other departments, and your team should see that.

4. Pick the Right Tools

When creating your budget, the final piece to consider is the tools your CS team needs to carry out these goals. As your team grows and the customer base expands, their demands grow more complex. This will require tools that will scale with you. 

For example, digital-led customer journeys are essential for streamlining the efforts of your team. They also drive expansion and product adoption automatically. Digital-led engagement models reveal critical behavioral data that your team can leverage to improve your TTV metrics and NRR. There are endless reasons to incorporate digital-first CS models. However, you will want the best tools to execute them most reliably. 

Make a list of the functions you need to reach your goals and match each to your existing suite of tools. Look for critical holes in your capabilities. What are your CSMs missing from their toolkit to reach your goals for next year? Map the costs of acquiring those tools with the ROI and figure out what is essential to include in your budget. Much like Marketing and Sales costs, these are ones that may take extra time to show a return, but they are necessary for the growth of your organization.

5. Present Your Budget

The final step is to use a budget calculator to fill out your budget template with each line item and present it to your executive leadership. Luckily, CS efforts have evolved from the nebulous concepts of 10 years ago to concrete growth drivers for your business. Your budget will show the direct connection from your operations to increased NRR and thus, prove the need for more resources.

If you want to learn more about creating the best budget for your CS team, register for our webinar. A panel of CS experts will help you align your business goals to your budget, plus offer tips to create a compelling proposal and winning presentation. Click here to register for free.