It’s the most wonderful time of the year.
You guessed it: year-end budget planning.
A time of possibility and excited (erm, dreaded) anticipation for what the new year (and budget approval process) will bring.
So, in the spirit of giving, I offer up this rendition of a festive classic:
“‘Twas the night before budget deadlines, when all thro’ the Slack,
Not a channel was stirring, not even an app.
The budget line items were filled in by CCOs with care,
In hopes that CS software approval soon would be there.”
*Please hold all applause until the end*
As much as I hope you enjoyed this poem, it’s time Customer Success leaders stop hoping for approval and watering down their budgetary needs for fear of rejection.
The best investment your company can make is in its customers – and that means investing in Customer Success.
But as a growing function, CCOs are still fighting for basic technology budget (unlike their more established counterparts). Teams are expected to understand and engage customers at a depth and scale that isn’t possible without the automation and usage insights of a modern Customer Success tool.
So, how can Customer Success go from barely getting by to exceeding their goals in the new year?
It comes down to knowing how to ask.
Because this is what your CFO and CEO hear when you request budget without a compelling case:
To which, their likely response will be:
So, we’re sharing three arguments you can use to convince your C-suite to invest in Customer Success technology and throw some well-deserved budget your way.
Note: This article was adapted from our video series, CCO Challenges, which features a discussion by ChurnZero’s CEO and CCO on how to win budget for Customer Success technology. Watch now.
1.) The ROI Argument
The first instinct of many Customer Success leaders is to pitch based on KPIs, such as reducing churn or increasing expansion dollars.
And for most CEOs, the ROI argument is the strongest approach. Because all investments should have a good return and tie back to the organization’s bottom line.
The problem is that since Customer Success is a newer function, Customer Success software is likely a first-time purchase for CEOs and a first-time pitch for CCOs.
When you pitch an unfamiliar purchase to your CEO, they’ll be skeptical, but you can overcome this.
The best way to reassure your CEO about your budget request is also the scariest: committing to KPI changes.
Now, I can feel the collective tightening of chests, pounding of hearts, and swelling of panic that’s ensuing from reading that – inciting our perpetual fear of the overpromise and underdeliver.
Because even after you’ve crunched the numbers and landed on what you feel is a reasonable expectation, you’re still worried it’s too much.
But here’s the thing: you have to commit.
Heed the advice of the internet’s favorite motivational screamer to muster up the gumption and “Do it. Just do it.” You have no other choice.
Because as our CEO You Mon Tsang forewarns, “If you come to me and ask for budget without a KPI change, you’re going to get no.”
But don’t worry, you can commit to KPIs while still giving yourself some wiggle room by providing a range.
When you offer up an allowable margin, you alleviate the anxiety of having to hit one specific number.
“If you want to be aggressive on your top range, you should. But you should have a low range, a higher range, and a target,” advises You Mon.
The good news is that generally for Customer Success software, the breakeven point is much more moderate than what most CCOs initially estimate. (See for yourself by using these ROI calculators.)
Lastly, remember to choose to KPIs that are meaningful to your company and not just Customer Success.
For instance, if the company’s goal is growth, your projects should track to growth KPIs. If the goal is increased cash flow and profitability, align your KPIs around savings and efficiencies.
2.) The Build vs. Buy Argument
You mostly hear the build vs. buy argument when software is early in its maturity or you have a CEO who likes to create technology. They may counter your request by asking: “Why would we take on a recurring investment when we could just build?” or “Can’t we create this with our CRM?” (By the way, the answer is no, a CRM is not enough.)
The complexity of Customer Success software is often grossly underestimated.
For instance, look at ChurnZero which provides big-data ingestion, advanced analytics, health scoring, large-scale workflows, native integrations, and campaign automation – not to mention the security, scalability, and interconnection of all that functionality.
Then there’s the maintenance, which typically accounts for 75% of the Total Cost of Ownership (TCO). You’ll also want to consider software innovation to stay competitive with Customer Success teams that are using the leading tools in this space.
So, make sure your CEO fully understands the cost to build and what you give up in return.
As another helpful tactic, we’ve also seen CCOs use mature departments as a comparison guide.
Marketing would never be asked to build their own automation tool, or sales a CRM. So why would you consider building a Customer Success platform – a product of equal complexity?
There’s also the situation where leadership may require an interim build as a proof of concept before investing in a more sophisticated product.
If this is the case, make sure it’s a time-bound initiative. You don’t want your bare-bones build to creep its way into becoming a permanent solution.
3.) The Emotional Argument
Aside from wanting to help SaaS companies grow their business through better retention, our CEO founded ChurnZero to eliminate what he hates most: surprises.
“There are few things more embarrassing than not knowing enough about your customers, so I started ChurnZero to help myself and others avoid it,” says You Mon.
Chances are your CEO loathes the (avoidable) unknown too.
Because the unknown leads to your Customer Success team missing churn signs and saying things like: “I really thought Company A would renew” – something leadership never wants to hear.
If you’re going to have a bad quarter, it’s better your CEO know upfront than you drop a bombshell of disappointment after it happens. That’s a surefire way to lose trust, fast.
By proactively communicating churn risk and churn intervention plays, you change the entire dynamic in your organization around churn and shift the perception of Customer Success.
You avoid missing churn curveballs by keeping your eyes on your customers. Of course, this becomes a formidable task at scale. But with the right Customer Success tools, you enhance your visibility to spot a curveball before its ever thrown and react in time so you never strike out.
Because you can’t expect to hit your numbers out of the park if you’re flying blind.
So, what’s it worth to your CEO to feel more confident in your forecast? For Customer Success to never miss an opportunity to save a disengaged customer or overlook the chance for expansion with a thriving account?
It’s a small price to pay for peace of mind and profit.
Always assume a no. (But don’t take it for an answer.)
The last piece of advice we wish to impart upon you is to plan for every potential objection that leadership may throw your way. You can never overprepare for budget conversations. Impress your CEO by addressing their every question and concern with substantiated and articulate answers that show you’ve done your research.
Grab our list of the most common leadership objections for investing in Customer Success software so you never have to give the uncomfortable and awkward reply of “I don’t know” and always have a well-supported response at the ready.
To get your “yes” to Customer Success software, check out these resources:
- Best Practices For Year-End Planning from Customer Success Experts
- How To Sell Customer Success Software to the C-Suite
- Customer Success Software RFP Template
- 3 Considerations Before Building Customer Success Software In-House
Customer Success Around the Web
- Building a Customer Success Health Plan for 365 Days a Year– Everyone pays attention during renewals or a customer complaint, but what about the other 360 days of the year?
- Four Customer-Centric Metrics to Drive B2B SaaS Retention – Track these top metrics to make sure your business isn’t just talking a big “customer-first” game.
- Don’t be a Gas Station: Creating Emotional Loyalty in Customer Success – Find out why building emotional loyalty doesn’t happen in silos and how you can create it.
Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero