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How and why should you build a Customer Success Budget?

5 January, 2023 3 min read
How and why should you build a Customer Success Budget?

Creating a budget is an important activity for the overall success of any business. It enables you to oversee and comprehend the short-term and long-term expenses and tightly manage the financial performance. Working on the budget is one of the most crucial tasks businesses have at the end of every year. However, when it comes to Customer Success, budgets are often overlooked, especially in small-scale companies.

To become a successful CSM, you need to always be aware of the financial implications of your decisions and plan the budgets accordingly. This can be a great way to allocate resources towards specific projects and initiatives, plan out your customer success activities, and set task priorities.

After working on multiple budgets, I have developed my own guideline to set things in motion. Read on to discover the steps that I follow for planning the budget ahead:

Step 1: Set Goals/Targets

This is the 101 step for budgeting. A budget should be designed keeping in mind the organization’s overall goals and mission for the subsequent year. It’s important to align them together well in advance.

Step 2: Identify your Income and Expenses

As a team, you need to look at what is going to be your revenue contribution and what you need to spend to make that happen.

Step 3: Distinctive Needs and Wants

Every team has a requirement that is a must and would impact the business immediately. Then again, some requirements are futuristic and long-term. Always keep them separate while working on the budget.

Step 4: Design Your Budget

Create a template for the budget so you can track the performance for each allocation, and know exactly when you would need capital.

Step 5: Put Your Plan Into Action

As soon as the year starts, put the plan into action and try to stay as close to ensure that your finance is managed well.

Here’s how being prepared with a budget helps in streamlining CS ops:

After conversing with numerous finance professionals from tech start-ups, I discovered that they’re most interested in the overall human resource budget, sales and marketing budget, product development and R&D budget, and other general expenses. Given that these departments consume a majority of the budget, to some degree, I can understand this prioritization.

However, with SaaS driving the tech start-up economy, it’s also essential to dedicate finances to the customer funnel. Without setting up an ideal budget at the end of a fiscal year, you can’t expect your management to fund your projects and help you with your vision for customer success. Additionally, it will aid in the proper planning and implementation of the respective projects. Planned spending will result in a reduction in cost, and will allow easy comparison of projected and actual results and performance evaluation.

Bonus Tip for CS Teams: Keep this checklist handy while working on the budget

  • Payroll cost (for new and old employees)
  • Internal Training (domain-specific training and/or role-specific training)
  • Customer Training (Feature-specific training or overall product re-training)
  • Attending conferences (it’s important to see what others are doing)
  • Software implementation (CS platforms, content creation tools, live chat tools, onboarding tools, etc)
  • Travel costs for customer visits (travel is back again so budget for it)
  • Marcom costs for QBR templates, renewal decks/leave-behinds, HTML emails
  • End-of-the-year customer gifts/cards
  • New initiatives (always keep budget for your ‘Wants’)
  • Team building (to function like a team, you need to bond together)
  • Incentives and bonuses (monetary motivation is simple and powerful)
  • Team awards and recognition

This is by no means an exhaustive list, but it can be a starting point for anyone trying to design a budget for Customer Success. You can take this list and modify it to fit your needs by adding or removing headers as you see fit.

Hope this article helped you get the ball rolling for your next CS budget.


Author profile image
Wilson Lobo

Wilson is an experienced marketer with a demonstrated history of working in marketing and advertising space across 17 countries. He specializes in B2B brand building.

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