Customer Success Budget: Best Practices for 2024

Investing in customer success to improve customer satisfaction and retention has become one of the main priorities in SaaS businesses. As customer demands in the ever-evolving SaaS environment grew by day, customer success teams needed to react proactively to create effective strategies to keep their customers satisfied. 

A well-planned strategic customer success budget ensures that the customer success team has all the resources they need to support customers in their endeavors by creating a CS framework that aligns with the business objectives.

Now, let’s dive deep and show you how to do CS budgeting and enhance customer retention and business growth.

Why is the Customer Success Budget Important?

A well-planned CS budget can bring your business numerous benefits that can improve overall business health. Let’s see some of them:

• Enhanced customer satisfaction and retention
  • The first impression means a great deal in SaaS. So, by creating effective onboarding processes that introduce the customers to the product properly, you are directly increasing the possibility of satisfaction and success.
  • Also, allocating resources for ongoing customer support helps resolve customer issues quickly, which leads to higher satisfaction and retention rates. 
• Reducing churn and driving revenue growth
  • CS budget planning allows you to always have proactive engagement and support for your customers, which reduces customer churn and helps you predict revenue streams. Also, when your customer success team is equipped with the right customer success software and education, they can identify upsell and cross-sell opportunities better and improve revenue growth.
• Building solid customer relationships
  • Personalized engagement enhances customer experience. Customer success teams can offer precisely that and expect loyalty and empowered customer relationships in return. 
  • Also, positive customer experience is directly related to customer advocacy. 
• Improving customer health
  • Investing in customer success software and analytics allows you to monitor customer health scores and intervene when necessary to prevent churn. By having adequate data analysis tools, a CS team can track metrics, refine CS strategies and make improvements backed up by precise data. 
• Better scalability
  • As a SaaS company grows, effective budgeting for customer success ensures that the given resources scale accordingly to maintain the highest levels of service for the expanding customer base. Learning how scaling customer success can help you deliver consistent and high value to all your customers, no matter the size of the customer base. 
• Improving your competitive advantage
  • Investing in CS and offering exceptional customer service will surely differentiate you from the rest of the market. 

Establish Your Funding Sources

If you manage to create and implement a smart and effective CS budget plan, there is no need to cut the budget from other departments in the process. Also, customer success is a major revenue driver, so investing in it can bring a greater budget for all departments real soon. 

Therefore, it is crucial to determine the exact founding sources for the budgeting of customer success. Some of the customer success manager’s tasks, like support and training, fall under the category of Costs of Goods Sold (direct costs for building and running SaaS services), and activities like upsells and renewals fall under sales and marketing, and tech improvements can be ensured by partnering with technology providers. So, where to look for the funds and how to adequately allocate resources? 

• Internal budgeting
  • A portion of the company’s overall operating budget can be allocated to CS whenever necessary. To improve customer onboarding and training programs in order to secure shared funding from product, sales and marketing departments.
• Use revenue from existing customers
  • Fund customer success initiatives by taking a portion of the revenue generated from renewals, upsells and cross-sells. 
• Direct investments
  • Seek capital investments for big initiatives like hiring staff, expanding to new markets, or tech upgrades. Use data and projections to present a convincing case to gain buy-in from executives and board directors.
• Use customer success metrics
  • Use key CS metrics like net promoter score, customer satisfaction scores, and customer lifetime value to determine the effectiveness of customer success efforts and justify the budget allocations. With customer success platforms like Akita, you can track and monitor all the crucial CS metrics, customer health scores, and trends to assess the effectiveness of your current CS strategies. 
• Strategic partnerships
  • You can partner with platforms that offer discount rates or cost-sharing opportunities for customer success software essential for CS. 
• External funding
  • Apply for various industry-specific grants for CS initiatives and explore government programs related to job creation, training and tech adoption. 
• Additional revenue streams
  • If your CS team is skilled and knowledgeable, they can charge for professional services like training and consulting. Also, by offering premium support packages for customers willing to pay for some extra service, you can use this revenue to invest in CS efforts. 

Setting Customer Success Goals

Customer success can be the bloodline of a SaaS company due to its power to drive success for the entire company. Before investing in CS, it is crucial to, once again, determine the customer success goals that align with the needs and objectives of your business. 

Reducing churn is certainly one of the most important goals, as it directly affects business health and sustainability. 

To enhance customer experience and satisfaction, it is crucial to improve and speed up time to value (TTV), which is the moment when your customer realizes that your product can help them achieve their goals. 

By having standardized CS processes, you can improve the whole customer journey by giving customers what they need at every step of the way. Automate as many CS processes as you can to save time and money. 

Expanding revenue is an ongoing desire and goal of any customer success manager, as it directly contributes to business growth. 

In the end, boosting customer sentiment by acting on their feedback and showing that you take them seriously is surely one of the most important CS goals. 

Customer Success Budget: Best Practices 

Now that you know more about benefits of customer success, funding and goals for your future customer success team, let’s see some of the best practices for budgeting this future team:

• Align budget
  • Align budget with business goals like revenue growth, market expansion, or customer retention
• Focus on critical areas 
  • Focus on areas like hiring and training skilled customer success managers and investing in a customer success software that can help you automate and streamline workflows to provide better customer experiences and get precise insights. 
• Fund onboarding plans
  • Create plans that are skillfully created to ensure new customers are on board from the very start. Invest in training materials and webinar development to empower customers with the necessary knowledge and best practices for your product’s utilization. By creating a solid customer success onboarding program, you are directly improving customer experience and satisfaction. 
• Create feedback programs and communities
  • Use surveys, user groups, and customer events to improve engagement and build a loyal customer community. 
• Motivate your customer success team
  • Encourage the CS team to keep up the good work by allocating funds for performance-based bonuses. 
• Track KPIss
  • This way you can make data-driven decisions. 
• Create a customer success budget template
  • This template can include all the costs for personnel, marketing and communication, operational, performance incentives, and others to get a comprehensive overview of the categories you should consider when creating a customer success budget. 

Conclusion

Creating a strategic customer success budget is important for achieving high levels of customer retention, satisfaction and growth in 2024 for SaaS companies. 

By making sure that the budget is aligned with business goals, focusing on key factors like customer engagement, software for customer success tasks, community building, and making data-driven decisions, you can ensure that your CS efforts are effective.

In the end, investing in customer success is not only a cost that you need to take into account, but also an essential investment in your company’s future.