How does customer-led growth work?

A “customer-led growth” (CLG) business strategy is based on the idea that customer feedback should drive business growth. With this method, the customer is at the center of all business decisions, from making new products to planning how to sell them.

CLG is increasingly used in the B2B sector, especially in software sales. It focuses on knowing and meeting the needs of modern buyers who want quick results and the freedom to make their own choices. They often do more than half of the decision-making process before contacting a supplier.

In real life, a CLG method in SaaS looks like this:

• Making a map of the whole customer journey
• Getting information from welcome waves and short surveys
• Tracking how much feature usage
• Putting an end to the feedback loop by acting on the input they get

How to use the customer’s voice in your marketing and sales

Businesses can be sure that their choices are based on customer data instead of guesswork when using the customer-led method. This makes the whole company focus more on the users. And it helps you learn more about your customers and what they want.

Word for

• CLG

What It Means to Put the Customer First

“Customer-led” means making all choices with the customer in mind when running a business.

It has a few essential parts:

• Knowing a lot about your customers’ wants, needs, actions, and reasons for doing things
• A steady flow of information about how people use the product through clickstream and polls
• Customized goods, services, and events that exactly meet what customers want
• A business culture that puts customer wants first
• Solid plans for marketing to and advocating for customers
• Being open to customer input while a product is being made
• making choices based on facts about customers instead of guesses or past examples
• Alignment of the sales, marketing, product, and customer success teams
• Iteration and learning happen all the time

Customer feedback is a big part of CLG strategies at every stage, from the beginning of development to making changes after the product or service has been released. This makes sure that the goods and services are exactly what customers want. Companies get product-market fit and build long-term customer relationships by becoming more aligned with their customer group.

Market-Led Growth vs. Customer-Led Growth in B2B

There are two ways for businesses to grow: customer-led growth (CLG) and product-led growth (PLG). Each has its strengths and weaknesses and can be helpful in different situations.

Growth Driven by Customers (CLG)

CLG is based on knowing what customers want and need and saying what they think. It means changing the sales process and products based on what you learn from talking to customers.

In CLG, the customer journey is carefully planned, considering the places where the customer has to choose and their tastes. Based on these insights, the sales and marketing activities are made to fit. Because of this, it works incredibly well in markets where customers’ wants are varied or change quickly.

Growth Based on Products (PLG)

The product is at the heart of PLG’s plan to grow. The product is made to get people to buy it, keep them buying it, and keep them interested. This method depends on the product’s features, usability, and inherent value to bring in new customers and grow the business.

Often, the product is self-service or has viral features that get more people to use it, like a recommendation program. In PLG, the object is usually the first thing that people who might buy something see. A free trial or freemium strategy is often used to get people to sign up.

PLG can increase because it uses its product to do so. This might mean you don’t need as many sales and marketing teams. When the product can speak for itself through how it works and how it feels to use, this method works well. The time it takes for a SaaS product to start making money is often very short.

What is the difference?

CLG and PLG are not the same in three main ways:

• CLG can better adapt to areas where customers have different needs and want a more personalized experience. When a product can meet many people’s wants with little customization, PLG does well in that market.
• The sales process for CLG is more traditional and based on relationships, while the sales process for PLG is based on the goods.
• In CLG, contact with the customer is essential throughout the sales and product lifecycle. In PLG, on the other hand, the product usually makes interaction with the customer easier.
• Most business-to-business (B2B) companies find combining CLG and PLG methods helpful. For example, use a product-led method for a go-to-market plan and customer-led processes for personalized growth and customer retention.

How Customer-Led Growth Deals with Changing Shopping Habits

Let’s look at some numbers to get a sense of how B2B buyers act right now:

• More than 45% of B2B buyers are between 25 and 34. This makes the younger group of business professionals the largest and most powerful.
• Before they talk to sales, most people are already up to 70% of the way through the buying process.
• 72% of buyers say they don’t want to deal with any reps during the buying process.
• It’s agreed upon by 80% of B2B buyers that they want the same amount of personalization as B2C buyers.
• There should be “real-time” interaction between businesses and four out of five people who buy from companies.
• It’s clear what B2B customers want today: customization, speed, and the ability to do things independently. They want businesses to give them the knowledge and tools to research, find information, and make intelligent choices. You must be there to wait when they are ready.

CLG deals with these significant changes head-on by:

• Getting used to buyers being independent means giving them resources and tools that let them look at goods and services at their own pace while still giving them support and information in a way that doesn’t get in the way.
• They are there for buyers when they are. Buyers may want a standard sales interaction or a self-directed model at different points in the sales funnel. CLG strategies are adaptable enough to meet the needs of all buyers.
• Using what customers say to improve product development and sales tactics will help meet customer needs better and make them more loyal.
• I am using customer interactions, preferences, and comments, as well as data and analytics, to improve the user experience.

Keeping customers interested over time helps build long-term ties.

The sales, marketing, and product departments must work together across functions and be in sync to carry out the overall CLG plan.

It all comes down to loving the customer. Not thinking about your customers all the time is a must if you want to adopt CLG successfully. To drive growth at every stage of the customer journey, you need to know what they want, need, and do and then use that information.

Why a customer-led growth marketing strategy is good

CLG wants to fill the gap these changing buyer needs have created by giving customers a more personalized and quick shopping experience.

The following are some of the benefits of this strategy:

More customers staying with you

CLG works on building relationships that last a long time. Because this approach is all about getting to know your customers and meeting their needs, you’ll be able to keep them longer because you’ll always try to make them happier.

Better engagement with customers

People will not only stay longer but also do more with your brand. Focusing on them in your material, product, and sales process makes it easier for them to get involved.

People will get more value from your goods if you keep them interested in your content. And they’ll be able to use it better in their business processes. To your business, this makes them more of an “active customer” and increases their chances of becoming an advocate.

Customer lifetime value (CLV) went up.

The customer’s lifetime value goes up just by keeping the customer. But if your customers are more interested in your product and marketing, they will promote your brand and use your product more in the long run.

That means they don’t just make the same amount of money every month. As their businesses grow, most will find new ways to make money, like adding more users or seats, upgrading their subscriptions, or finding goods that work well with their current ones.

Engaged customers will also be ready to tell others about their success. They’re the people who send you new business leads through recommendations, case study candidates, and reviewers. These clients become more like your partners when you use CLG.

It is less expensive to get new customers.

It’s about five times more profitable to keep and grow your current accounts than to get new ones.

Why?

The infrastructure for sales costs a lot. Creating content, designing sales methods, hiring, training, and equipping sales reps take time and money.

People who buy don’t trust salespeople. Referrals are more trusted than your business’s ads and marketing tools 92% of the time.

ROI is what everyone wants to see. Over three-quarters of buyers today look at three or more types of support before deciding to buy something.

The three basic principles of CLG are to give your customers the best experience possible, keep the lines of communication open, and use their comments as your best marketing tool. Doing these things will build a brand ambassador army that will bring you new business for years. They also make it easier for your sales team to close deals with new leads because they prove that your product works.

Better reputation for the brand

Social proof supports your claim that you are a trustworthy seller. You’re doing two things when you put the features and marketing materials your buyers want first:

• Making the most of the new social professionals you meet
• Keep telling yourself why you deserve it in the first place
• If you offer a great product and keep customers long, your sales team won’t have to start as many talks by asking, “Who are you guys?”

Better creation of products

There is no truth to the thought that new products are created by chance. People who buy your goods can tell you the most about what they should do. You can’t build a product around what the customer wants; it has to be the other way around.

CLG stresses that you should base your product roadmap on what users want. As soon as you release new features to the market, collecting data and comments will help you improve those features.

Less money spent on marketing

Customers spread the word about your marketing when you have customer-led growth. Reviews, case studies, testimonials, word-of-mouth, and social media are all free ways for customers to give you information. Their viewers see it, and you can use it for yours.

Adaptability to changes in the market

CLG tries to understand and meet the wants of its customers. This means you must change how you do things when the market changes. You’re not tied to a single sales or marketing platform; instead, you can quickly change direction based on how your customers respond.

Making decisions based on data

Keep an eye on what your customers are doing and always think to make significant choices based on facts. You don’t guess or make assumptions about what your customers want and need. Instead, you listen to what they say and act on that knowledge.

How to Put a Customer-Driven Growth Plan Into Action

If you want to use a customer-led growth plan, here are the steps you need to take:

1. Use the correct technology.

Getting the right tools before you can even think about using your customers for data, feedback, and word-of-mouth would be best.

In short, this includes:

• In other words, a customer relationship management (CRM) system
• A tool for customer data
• Software for web tracking (GA4, heat mapping tools)
• Tools for analyzing products, like Userpilot and Mixpanel
• A way to sell to and advocate for customers
• Software that automates marketing

For CLG, your CDP is the most important of these tools. It gives you a single source of truth about each customer by combining data from all sources and giving you the information you need to give customers focused personalized experiences. It also lets you set up automations that make their web and app experiences more personal.

2. Know who your customers are.

If you’ve made and sold a product, you’ve already started doing this. It’s time to move on. You can use your CRM and CDP to look at your data, divide your customers into groups, and learn about their habits, likes, and needs.

3. Ask customers what they think.

To get feedback, you need to talk to three types of customers: new customers, high-value customers, and customers who have already left.

New customers are the best people to ask about the onboarding and implementation methods. As you recently closed them, they can also teach you much about improving your sales and marketing.

Your ideal customers are high-value customers, also known as “evangelists,” “power users,” or anything else you want to call them. It would be best to find out what makes these groups of people different from your regular buyers.

Customers who leave quickly are taught a lesson. Why did they go? There must have been something you could have done to stop it.

Voice of the Customer (VoC) programs that work well will use in-app polls and feedback forms to get quantitative information. It will also collect qualitative data from usage patterns, help desk talks, and support emails. This is the same kind of data that your CDP and product analytics tools gather.

4. Make your mindset focused on the customer.

Everything starts inside. To be customer-led, you need a mindset that puts customers first, even if your tech stack is integrated and data constantly flows. These are some essential things you can do:

• Your marketing, customer service, and sales teams should be trained to talk to buyers better.
• Encourage people from different departments to work together by holding talks and discussions between them.
• Set up a way for employees to give you comments on what customers want.
• Make Slack groups to share ideas and hold meetings where everyone can discuss what they hear and talk about with customers. And let everyone know about your successes, like getting good comments or winning a customer.

5. Customize the experiences of your customers.

And it has to happen in many different ways if you want to make a growth plan that is genuinely customer-led.

Customize how you use websites and apps. This one is pretty clear. Because you know what each customer does and wants, you can make their web-based and in-app interactions more relevant to them, when you can, set up automation, like guided product tours based on how the product has been used.

Make marketing statements more personal. Your CDP can be linked to other tools, like marketing automation software, so that you can send people personalized messages based on their data and behavior.

Make focused upsells with your CDP. This will help you figure out what kinds of users are most likely to buy certain features or goods.

6. Always get better.

Once everything is up and running, you’ll need to keep an eye on work and activity. This includes large-scale data (like retention and conversion rates) and small-scale data (like clicks on in-product ads and levels of involvement).

7. Set up programs for customer success and support.

The real benefit of customer-led growth comes when you have a lot of feedback: the customer gets a better product, and you can use their good feedback and word-of-mouth to get more leads and sales.

Make a program called “customer success,” whose primary goal is to help customers reach their goals with your product.

Set up an advocacy program that pushes people to give you reviews, testimonials, case studies, and referrals.

Use what customers say as marketing material. User-generated content can help your marketing ideas get across better. You can write better copy if you know your customers’ struggles.

8. Reward customers who stay loyal.

Customer support programs don’t work 99% of the time because they don’t give customers enough to gain from them. It takes too much time and work for people to help you if you don’t make it worth their while.

The reward could come in the form of…

• Adding game elements like badges, points, and savings
• Get beta versions of your goods or access to new features before anyone else
• Savings on future purchases or subscriptions
• Only you can see events, webinars, or content
• gift cards to shops or vendors that you like

Also, it would be best if you stopped getting comments from customers. When someone gives you specific feedback about a product or feature, and you follow their advice, it’s easy to send an in-app message that says something like

“You asked, and we paid attention!” We added {Feature X}, {Feature Y}, and {Feature Z} based on your suggestions. Thanks for making our product better.

“Tell me how it works.”

This is a simple way to show your customers that you’re paying attention to them and make the experience more personal.

9. Keep an eye on key performance indicators (KPIs).

There are two key KPIs you should look at when it comes to customer success:

• Keep an eye on customer satisfaction (CSAT) numbers. What percentage of your users are pleased with your product?
• The Net Promoter Score (NPS) tells you how many customers would tell a friend or coworker about your product.
• You can use these two KPIs to see how well your customer-led growth plan is working and find places where it could be better.

10. Repeat your program and make it bigger.

You are ready to scale your program and keep iterating as you grow now that you have the right tools and have reduced your internal processes. This is where your information comes in handy. It will help you find patterns and trends, make intelligent choices, and improve your customer-led growth plan.