Annual Planning: Become Besties with Budgeting

By Sabina M. Pons and Emilia D’Anzica

Budget season is around the corner! You’ve worked hard to get to a leadership role and influencing fiscal spending is an exciting part of being a customer success leader right? Not exactly. Most customer success leaders dread annual budgeting for three reasons:

1. Knowing where to start is overwhelming
2. Relationships with the finance team may be weak, or non-existent 
3. Data to defend the budget may be lacking

Using the Growth Molecules™ B.U.D.G.E.T. Framework below, you will get your budget ready on time without fear, and more importantly, get it approved without multiple revisions and frustration.

B – Be Clear. 

Clearly articulate the strategy behind the budget request in an organized spreadsheet:

• List all of your requests in one column. 
• In the next column, justification for the ask supported by data and empirical evidence 
• In the third column, explain the expected outcomes, or the Return on Investment (ROI). This last part is the hardest and we go deeper on the topic in the next section.

U – Understand ROI of the Ask(s). 

We recommend breaking down the requests into three sections:

1.People

• How many people do you want to hire? 
• Why is it a good investment versus buying a technology that can automate some of the work? 
• What is the benefit of these hires after one year?

• What processes will improve efficiency, the customer experiences, and help scale?
• Do we have enough people dedicated to work on building the processes? Maybe we need outside consultants to help with the mapping and playbooks.
• If we do hire consultants to implement processes, what are the expected outcomes in 30 days vs. us doing it ourselves (when we are already short-staffed and/or may not be qualified to do this?) 

3.  Systems

• Are the systems that we already have sufficient for our growth? If so, do we need to account for additional licenses, services packages, or other add-on functionality to help us run more efficiently? 
• Do we need to procure a replacement or a net-new application to support our changing business needs? 
• Do we have the domain expertise and internal capacity to implement these adjustments effectively, or do we need to temporarily augment our team with a short-term contractor? 

D – Data Sophistication 

Do you have the data to correlate key customer behaviors relative to revenue recognition? For example:

• Are customers more likely to renew if certain activities occur during the customer journey? 
• Does a certain number of accounts managed per CSM yield differentiated outputs? 
• Can you accurately predict retention and expansion rates six months from now? Twelve months from now?

By having the qualitative data to substantiate the funding for your customer success programs, you’re more likely to get the attention, and approval, that you need.

G – Get Comfortable Presenting to Stakeholders

Succinctly provide a compelling narrative about your initiative to win the budget allocation that you’re seeking. That sounds simple enough, right? For most, developing a persuasive statement is doable, but far fewer people have the confidence to present one’s great ideas to a group of C-suite executives. 

To get comfortable – prepare and practice, repeatedly. Literally stand in your living room, record yourself, and rehearse out loud to your significant other (or pet, or plant!). It feels awkward and silly, but it works! Playback your recording, and fine-tune your delivery. 

E – Expectation Setting

Once you have the budget mapped out and approved, it is just as important to set proper expectations about the next steps. There are three parties to keep apprised of deliverables:

1. Executive Leadership: Set expectations with executive leadership about when you will draw from budgetary line items and by when they can expect to see impactful business outcomes. This helps them support you and also space out the fiscal impact of your initiatives relative to another cross-functional spending.
2. Your Team: It is okay to share the accomplishment of securing monetary approval for the new customer success platform (CSP) or additional hiring – in fact, it’s encouraged. By doing so, you can boost team morale (“The company believes in Customer Success…. We matter.”), you can obtain volunteers to assist with executing new initiatives, and you can even use communication as a learning opportunity for those seeking to have a career managing a team someday. By illustrating how strategic planning and budgeting are crucial functions of business leadership, you’re helping your team grow in their careers. 
3. Yourself: Set appropriate expectations for yourself as well. Be realistic about what you’re seeking, recognizing that every other departmental leader is going through the same budget planning and approval request process. Walking away with approval for over 70% of what you sought is a win! Also, even though you’ve been working for weeks or months on your budget and strategic plan, the tactical execution may take some time. Be patient while nurturing the plan along. 

T – Track ROI

Is the allocation of the budgetary spend being applied as your program was designed? Are your formulated hypotheses about the company’s Customer Success investment coming to fruition? Be sure to establish baseline metrics at the onset of your programs and measure them throughout execution. Proactively providing status updates to the executive team about business outcomes is a smart move as well. Once you’ve successfully allocated your budget and reported the ROI of the corresponding programs, you should feel proud. You’ve now gained confidence and built rapport for the next budget-seeking conversation. 

Ready to get started on your budget using the tips that we shared above? We are here to help! Here is your complimentary downloadable budget [TEMPLATE] to get you started.

Budgeting shouldn’t be scary or hard. As a business leader, budget is part of the job and you must be confident with the process and the numbers. Customer Success deserves as much investment as other go-to-market functions but if you don’t do your homework up front, invest in learning, and putting data points that matter in your budget, it likely won’t get approved. Remember, it is often the case that the install base brings in more of the company’s revenue and therefore warrants proportionate investments. Let this sink in, more of the company’s revenue. Isn’t it time your company properly budgeted for customer success to scale?