How to Secure Budget for Customer Retention Initiatives

If your business model involves recurring revenue or subscriptions of any kind, you’ve likely considered or even championed an effort to invest in existing customers.

To marketers, it may seem like a no-brainer to dedicate resources to retaining subscribers or customers: you’ve already invested in finding and converting them once. It’s much cheaper to hold on to them than to replace them with new customers! Cancelations and attrition need to be kept in check. Everyone wants to avoid attrition. Obviously, right?

Why wouldn’t every CFO sign off on your customer retention project? Are they insane?

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Two Sets of Priorities

CMOs are oriented toward strategy and execution. What keeps them up at night are questions like: Will my department meet its goals? Will my department meet its goals within budget? CMOs are solely responsible for one department.

CFOs see the world through the lens of risk and reward. What keeps them up at night are questions like: Will the company have cash at the right time in the right place to accomplish its goals? Will the company be around tomorrow? CFOs need to consider all departments within the organization. This is not to say CFOs are more important than anyone else—it’s simply the reality.

Overall, this tension is healthy. But it can cause some frustration, especially if you need to convince your CFO to approve a budget, and you keep getting “no” for an answer.

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A Vicious Cycle

How can you get your CFO to say yes?

Let’s reframe the scenario: Your son wants $1,000. Would you give it to him or put it in his college fund? I’m the parent of a teenager. He asks for money on a regular basis. If I give him $1,000 for a new gaming system, there’s an opportunity cost. It’s $1,000 I can’t use for something else. It’s $1,000 that won’t be there if we need it for something more important, like a college prep course.

The same decision-making process happens in the mind of a CFO. If one project is funded, there’s an opportunity cost. You are competing for scarce resources and it’s the CFO’s job to allocate funds responsibly.

To turn your CFO’s “no” into a “yes” by giving them what they need to make a responsible decision.

4 Principles for Reframing Your Retention Initiative Pitch

Bring Data, Not Dreams

If you paint a picture for your CFO of what you want to do with your retention initiatives, all you will be demonstrating is that you have a beautiful imagination. The only way to make your case effectively is to use hard, cold data.

Show your CFO that the money for client retention has a higher chance of producing returns than other options. Your CFO wants historical data showing why your chosen path will work better than other possible paths.

Bring Painkillers, Not Vitamins

CFOs are all about mitigating the risk of debilitating failure. They are much more likely to invest in projects that solve a problem, rather than make incremental improvements. If you were on a desert island with chest pains, would you prefer to have Aspirin to stop a heart attack, or a multivitamin to make your whole system a teeny bit healthier? (Aspirin, please!)

Frame your client retention budget in terms of solving a problem, rather than seeking an incremental improvement. This is a critical lesson for understanding the mind of a CFO: sometimes it is all about choosing the right problem and offering the best solution to solve it.

Know Your Numbers

CFOs are data experts. They often have accounting backgrounds, and accounting is all about structuring data so others can review it.

Get ahead of your CFO by looking at data in all the meaningful ways, not just in the ways you do now. Create some pivot tables and play around. Create new cohorts of customers based on common attributes. Look for leverage points, trends, and opportunities to fix a problem. Let the data do the talking.

Ask for Input

Finally, ask for your CFO’s input. You share a common goal: to grow the business. Come to the table as a partner and listen for mutual concerns that you can solve together. You are, in fact, not your CFO’s teenaged child. (Or, if you are, that’s an entirely different blog post.)

Let the Data Tell the Story

Consider these two versions of a proposal for an increase in a client retention budget.

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Your CFO will only hear the highlighted words!

Reframe the request with data that points to a problem: e.g. one acquisition source has increased in cost, and allocating even more funds now through an alternate channel would increase the ROI.

The following two charts are based on the same exact data set, but only one tells a story:

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Version A: No story. No problem to solve. Version B: Story. Specific problem to solve.

A CFO’s Guide to Building a Retention Budget

Here’s how to dig up the right data. First, evaluate your customer base by segmenting and analyzing cohorts. The goal of a cohort analysis is to find something that’s not working but is fixable.

Tip: Don’t let a lack of a BI system get in your way. Export your customer data into a spreadsheet and create pivot tables to look at key metrics by acquisition source, year, region, demographics, and more. Keep pivoting.

You have the right cohort analysis when it tells you where the problem is. Then build a budget to address that problem.

Don’t simply raise an overall average. Your CFO won’t be moved by that. Fix a cohort that’s broken and guess what? The average will naturally rise!

Finally, be clear about how you will measure success. If the project fails, be transparent about why and adjust future plans accordingly. With a proven track record of success (and learning from failures), you won’t have to fight as hard in future budget cycles.

Dos, Don’ts, and Key Takeaways


  • Do solve for data-driven problems

  • Do tackle an indisputable problem

  • Do solve problems that is best solved by you


  • Don’t try to increase overall retention by a certain percent

  • Don’t do the same thing, but better

  • Don’t forget to tie the budget to absolute success or failure

To make a compelling business case for your customer engagement or subscriber retention programs, bring the data, solve a problem, know your numbers backward and forward, and work in partnership with your CFO.