Creating a good customer experience is the key to sustainable growth and a winning business model. Positive experiences pay high dividends, in the form of customer loyalty and new user acquisition — which is why companies must take a more strategic, customer-focused approach to CX.
What is customer-led growth?
Customer-led growth (CLG) is a business growth strategy that leverages customer insights and feedback to provide the best customer experience. It differs from the PLG strategy, or product-led growth strategy, which relies on the product itself to bring in new users and retain customers. Sales-led growth, a.k.a. SLG, is another popular growth strategy utilized by SaaS businesses that depends on an enterprise selling framework and a sales team to drive revenue.
What are the main elements of customer-led growth?
Customer-led growth first requires an easy way to collect feedback and customer insights. A robust feedback system empowers you to listen to your audience, find actionable insights, and strengthen your customer relationships. Direct access to consumers with the ability to ask questions and immediately get responses is paramount to a successful CLG strategy.
Customer-led companies tap into their audiences to drive their business initiatives. Rather than relying on assumptions or historical data to drive their decisions, they focus on real customer data and approach their choices consciously.
Another key trait of customer-led growth companies is a shared understanding of the customer across different teams. The appetite for insights and the desire to make user-centered decisions isn’t limited to researchers and marketers. In fact, in these companies all departments seek better customer insight, whether it’s the sales team, product managers, UX designers, or customer success specialists.
Cross-functional collaboration around customer research that meets the entire organization's needs is an essential component of customer-led growth.
What are the main benefits of customer-led growth?
Adopting a customer-led growth strategy benefits companies of all types and sizes. Everyone wins when customers are kept at the center of the business.
When properly applied, a customer-led growth model results in a better customer experience and increased customer value, making your audience the real winner. Sharing their feedback results in a better end product for them. At the end of the day, if your product can better meet and service their specific needs, the customer is happier and more successful.
For your organization, prioritizing user feedback and integrating it into business decisions facilitates organic growth and efficiencies across the full sales funnel. An improved customer experience removes roadblocks in the sales process and makes it easier to expand your customer base with new paying customers, driving revenue growth. The customer-led approach can also improve customer retention and customer success, which in turn fosters customer loyalty and opens the door to upsell opportunities.
How to implement a customer-led growth strategy in SaaS?
Implementing a customer-led strategy at a software company typically involves bringing together product-led growth and sales-led growth strategy.
The buying process is quite different in a B2B setting compared to B2C. Sales cycles are much longer and more complex for B2B customers, with a decision-making process that is more involved. Therefore, it is crucial for a SaaS company to connect with their audiences throughout the entire buyer journey, from customer acquisition and the onboarding process to product adoption and customer retention. Consistently connecting with your customers at every touchpoint is necessary to get the most accurate understanding of their experience.
Customer data and insights on user behavior should be used at different stages of the product development process. For example, customer feedback during the ideation phase helps you understand your audience's pain points, ensure product market fit, and create an effective go-to-market strategy. Post-launch, increase customer retention by using research insights to guide product improvements.
The main customer-led growth dos and don’ts
- Don't play the guessing game. Instead of making decisions based on gut feeling or assumptions, take the customer-led growth approach for every decision and action you take.
- Do talk to your customers regularly. Getting frequent input on a consistent basis is necessary to get the most comprehensive view of the customer experience at each step.
- Don't build products without first understanding who your customers are. Customer-led and product-led growth strategies go hand in hand. Create better products from the get-go with early-stage input from your customers and then optimize product offerings based on their feedback.
- Do share insights and learnings across internal teams. The capabilities of research get more powerful when you bring teams together who contribute different perspectives and questions. The internal democratization of customer research and insights will help provide a single unified view of the customer that is exponentially stronger.
As appetite for consumer insights and user-centered decision making grows, companies must continue to put customers in the driver’s seat and adopt a customer-led growth strategy. Being a truly customer-centric organization requires putting your audience at the core of your growth strategy, guiding everything you do.
Ready to let your customers lead you to success? Start gathering customer feedback today.