Customer-Led Growth Strategy Importance & How to Get Started
The evolving marketing arena sees the adoption of new growth techniques or strategies.
Motive?
To lure the target audience toward products or services and to boost overall business revenue. As the saying goes, "There is only one boss: the customer." Therefore, companies now primarily focus on a customer-led growth strategy, as opposed to traditional methods based on sales or products.
Thanks to its growing awareness and success rate, an increasing number of brands are now embracing customer-led marketing in their business operations. The dynamic shift has enabled businesses to achieve new milestones and write inspirational success stories within their target market. Moreover, it also helps them build a strong customer base, which contributes to their growth and saves costs on many fronts.
But what exactly is this CLG strategy?
What does it take to implement it?
These questions and a few more (apart from these) might have already crossed your minds by now.
Don't worry! We have addressed all these queries and provided additional helpful explanations in this blog post. Let's discuss it in detail now…
What is a Customer-Led Growth Strategy?
Customer-led growth mainly focuses on customers' feedback, insights, reviews, and experiences. Regardless of a business's size, its ultimate goal is to generate more revenue and establish a robust customer base.
And it only depends on one question: "How is your customers' experience after using your product or service?"
To achieve an "Excellent" rating, companies must consider several key points when developing their growth strategy. Here are these:
- Ensuring top-class customer support
- Getting customer feedback and insights about products/services to explore the scope of improvement.
- Identifying "High-Value Customers" and retaining them for the future.
Importance of Customer-Led Marketing Strategy
Many businesses focus on gathering new customers by implementing traditional strategies, such as product-based and sales-based growth strategies. It is indeed essential to maintain a good customer base, but it's also equally vital to retain existing customers (your most valuable asset!)
A simple means to retain your current customers is by enhancing their overall customer experience. It would lead to improved customer retention & satisfaction, increased revenue, and growth due to referrals.
Failure to do it would result in:
- Poor customer experience and the tendency to switch to new brands.
- Bad word of mouth and difficulty in gathering new customers.
- Decline in overall profit due to poor retention rate.
Hence, you can't afford to ignore customer-based marketing strategies in today's evolving marketing space. Most brands adopt a customer-oriented approach to enhance the overall customer experience and build long-term relationships with them.
Real-World Example of a Customer-Led Growth Strategy in Action
Many brands employ this method to expand their customer base. Here, we have provided a notable example of Slack's implementation of this technique. Let's dive in!
Studying Slack's customer-centric product strategy reveals that it prioritized customers from the outset of its product development. Their customer-oriented product teams would take customer feedback, reviews, and inputs, along with utilizing available customer data, while prioritizing new features in the product.
Slack's team created various channels, such as "#feedback", "#love tweets", and "#beef tweets", to understand what their target customers desire. It helped them resolve the impending challenges the workforce would experience while using the messaging app.
Result? Businesses worldwide had widely welcomed the release of a superb workplace messaging app. That's the power of a customer-led marketing strategy by any brand.
Is CLG Strategy the Right Fit for My Business?
Every business can adopt the CLG strategy to enhance customer loyalty and achieve its growth objectives. However, before you dive into implementing this approach abruptly, it is wise to consider some notable factors. Let's discuss it!
Your Business's Customer-Centric Approach
If your business already prioritizes exceptional customer experience by regularly knowing their feedback and communicating with them, then the adoption of CLG could work in your favor. Moreover, you wouldn't have to feel the burden of incorporating it into your business strategies.
Product/Service You Offer
Consider implementing a customer-led growth strategy if you offer high-value products or services. In this case, it would be a beneficial move, contributing to the maintenance of the customer base and attracting new clients through brand advocacy.
Your Current Customer Base
If your business has satisfied and happy customers who bring more consumers through referrals, the CLG strategy is the right fit for you. It would help you scale up your efforts to satisfy more customers and boost your revenue through retention.
Your Team's Potential
Intensifying customer engagement and satisfaction requires considerable effort. Therefore, you must be clear about your team's actual capacity and resources to determine whether you can effectively manage new customer success programs.
Customer-Lifetime Value (CLV)
Keep in mind your customers' lifetime value. If it's high, then a customer-led strategy would be effective for you, as you would benefit from generating more revenue through your referrals.
Competitive Landscape & Market Scenario
Consider the competition and market conditions in which your business operates. If it's highly competitive, consider adopting the CLG strategy to differentiate yourself from other companies.
Long-Term Business Goals
If you genuinely want to adopt a customer-centric growth approach for your target audience, consider this approach in your business activities. However, you must realize it demands constant adaptation to the changing business needs and market trends to produce fruitful results.
Top Strategies for Implementing Customer-Led Growth
It takes great precision and strategic efforts to implement your customer-led growth strategy effectively. You need to consider a few pointers to make this strategy work properly. Here are a few things that you can incorporate into it:
- Know Your Customers By Collecting Useful Data
Effectively forming a customer-oriented strategy begins with understanding your customers' needs and preferences. If you're clueless about their needs, preferences, and dislikes, how could you start to lure them in the first place? The best way to do it is by gathering customer feedback, surveys, and other types of data about them.
Once you collect customer data, segment them appropriately based on whether they're new, loyal, or churned customers. It will help you gain a deeper understanding of their buying patterns and behaviors. - Create Channels for Improved Customer Service
The next step is to create separate channels for your customer base. It will help your team frame customized strategies and offer customer service with a personalized touch. Additionally, you must identify areas for improvement to enhance your overall customer service. - Offer Personalized Experience
If you make your customers feel special, they will reward you in many ways. An effective way to execute customer-led marketing is by offering a personalized experience. You could offer them customized services and present them with offers specific to their needs. - Build Long-Term Relationships
Out of all factors, establishing a strong & lasting relationship with customers would work in your favor. How to do it? Simply, by communicating with them regularly and involving them by taking their point of view or feedback while launching new products/features. - Reward Loyal Customers
As part of your customer-led strategy, one way to boost revenue is by rewarding your loyal customers. When customers refer your products or services to new people, it contributes to your overall business growth.
Therefore, you must reward them with lucrative offers on future purchases or discounts on subscription renewals. Utilizing referral marketing platforms, such as Referral Program Pros, can help you streamline your campaign effectively. - Identify the Scope of Improvement
Every product or service has pitfalls that customers dislike. Thoroughly study the available consumer data and take the necessary steps to improve areas where you are lagging.
How to Measure CLG?
Truth be told, there are no specific or generic parameters to measure the effectiveness of a customer-centric marketing strategy.
Nonetheless, you can consider specific key performance indicators (KPIs) that could help you analyze and interpret your CLG framework. Here are these:
- Customer satisfaction (CSAT) scores
- Net Promoter Scores (NPS)
- Customer churn rates
- Customer retention rates
- Repeat purchase rates
- Average cart sizes
- Customer lifetime value (LTV)
Customer-based growth centers on retention, expansion, and referrals. However, it isn't easy to track these accurately on your own.
Conclusion
In summary, CLG is a trend in the business world and is the undisputed future. Keep in mind one thing: a customer-led strategy doesn't negate or replace your sales and marketing strategies, but it complements them significantly.
Adopting the CLG strategy enhances customer involvement with your brand and opens doors to more business growth. Remember, selling to your customers won't suffice in today's era; you also need to align your products and services with consumers to achieve sustainable growth.
FAQs:
How is Customer-led growth different from product-led growth and sales-led growth?
Customer-led growth involves listening to customer feedback and experiences to make adjustments during the product development phase and market efforts. Product-led growth and sales-led growth models focus on the product experience and the efforts of the sales team.
What are the common customer-led business examples?
Popular brands, such as Amazon, Spotify, and Slack, employ the customer-led business growth model. They focus on gathering client feedback and insights, driving significant revenue growth in a relatively short period.
Why is customer-led growth important for today’s businesses?
A customer-led growth strategy plays a vital role in understanding customers’ needs and preferences. Therefore, businesses utilize this real data to make changes to their products, ensuring customer satisfaction and outperforming their competitors.
What are the criteria to measure customer-led growth?
Monitoring key metrics is crucial for measuring customer-led growth. Standard metrics include customer satisfaction scores, customer churn rates, customer retention, average cart sizes, repeat purchase rates, and Net Promoter Scores (NPS).
