Customer-Led Growth (CLG) is one of the latest marketing buzz words you may have heard McKinsey, Forrester and others talk about recently, with Forrester noting a noticeable ‘uptick’ in interest in the subject earlier this year. But what does it mean, and what does it mean for your business?
What is Customer-Led Growth (CLG)?
Customer-Led Growth means rethinking your marketing game to drive growth through customer-centricity. In other words putting your customers at the centre of everything you do, to achieve the best experience you can for your customers and then leveraging those same satisfied customers to drive growth. But it’s more than just that and means continuously involving your customers as valued partners in developing your products and roadmap.
Why should CLG matter?
According to McKinsey, an astonishing 80% of the value creation achieved by the world’s most successful growth companies came from unlocking new revenues from existing customers rather than endlessly chasing new customers. Furthermore, McKinsey stated “improving the experience of existing customers can deliver breakthrough growth for incumbent companies—often more than double that of their industry peers”. And that’s against a background where incumbent companies from airlines to insurers, telecoms, utilities and others are all struggling to achieve sustainable, profitable growth in a world in which their offerings are increasingly commoditized. Forrester says companies that crack CLG tend to grow 1.8 times faster than their competitors.
Hopefully that got your attention!
What does CLG mean?
McKinsey says it involves rethinking “corporate culture and operating models, to ramp up innovation and technology adoption, and to build new CX measurement and analytics capabilities”. Wow! That’s a lot of corporate-speak and jargon and you’d be forgiven for wondering what it means and even if there’s anything new in it at all (or even if there’s anything in it full stop!).
Forrester talks of CLG being a team game where sales, product, customer support and lifecycle marketing must work together to maximize customer satisfaction. And it involves “actively using customer data and feedback to inform business decisions”.
Thankfully McKinsey gives the example of an unnamed leading mobile telecom (although we think we know who that is :)) that instead of fighting a margin destroying race to bottom on pricing, decided to fix each customer pain point one by one leading them to leap up the customer satisfaction ratings and reduce churn by 75%. That was reflected by a huge increase in shareholder value.
So let’s leave the corporate consultant speak to one side and let’s look at what this really means for you:
So what are the principles to drive growth CLG?
It’s always good to start with principles, so here’s the basics that underpin CLG:
Listen to your customers
It can cost up to five times more to acquire new customers than keep existing ones. So pay attention to your current customers! They are your most valuable asset, so treat them like that and listen to them and get to understand them and understand what they want.
Invite them to join your team
By creating a team with your customers and communicating constantly back and forth you can get valuable customer input early into product design decisions and avoid wasteful expense and time creating something your customers don’t want. But it doesn’t stop there – they should be on your team for the long term!
Customers are your best product testers
Because your customers use your product day in and day out, they are your real product experts (in fact only their opinion really matters), so enlist them as part of your extended QA team to understand your product’s performance before launch, allowing them to input as early as possible from wireframes, to alpha and beta versions.
Get ongoing feedback on your tech
To deliver a world-class experience, your tech must be really top-notch and be seen as such by your customers – so constantly ask them for feedback as to how they perceive your tech and act on that feedback in a virtuous loop.
How CLG can be your Secret Weapon to drive growth:
Here’s how the outputs of CLG can help your marketing:
1: Build Trust: Peer reviews are more convincing than any sales pitches – so getting customer testimonies from happy customers boosts your marketing and conversion rates.
2: Prove Your Worth: Get your customers to describe the value that your product or service brings – you might even be surprised with what you learn.
3: Enrich Your Marketing With Real Customer Stories: People relate to stories more than facts or lists of features, so let your customers tell their own real stories. You couldn’t write better marketing copy.
4: Make Your Proposition Unbeatable: By building products that your customers want and that provide real value you have the keys to real customer loyalty, particularly if they’ve helped build that proposition.
Here’s our No-BS, 9-Step Guide to CLG:
Step 1: Learn to Listen
Ask your customers what they love or hate about you? And listen to the unfiltered truth, however painful.
Step 2: Create a dialogue
It’s not just about feedback from your customers, you should be giving them feedback on their feedback! If they’ve given you honest feedback, let them know that their opinion matters by showing how their suggestions were implemented or if not, why not. Or perhaps if you’ll just do it in the next release, then communicate that. A two way street will encourage more help and feedback from your customers.
Step 3: Social Proof
Gather social proof in every form possible: ratings, reviews, testimonies, case studies etc and use them all across your marketing. Customer testimonials are the most convincing marketing you can get.
Step 4: Share Your Roadmap
Share your product roadmap with customers and involve them in co-creating your journey.
Step 5: Make Engagement Fun.
Use gamification and provide special rewards for those who help you – making engaging with you fun, something your customers want to again and again. And remember, rewards don’t need to be monetary and can be status based like badges and titles.
Step 6: Referrals Turn Satisfaction into ROI
Make it easy for customers to refer you and provide great incentives and rewards to grease the wheels. Referrals are one clear way how you can show that customer satisfaction moved the needle for your business, especially given recent research that confirms that referred-in customers are more valuable than those acquired from other sources.
Step 7: Identify Your Brand Advocates
Keep track of your brand advocates or brand ambassadors, get to know them, make them feel appreciated and use them all across your marketing and sales processes by offering them things to give and share with their communities of friends, family, followers etc.
Step 8: Treat Your Loyalty Customers Like Royalty
Celebrate your loyal customers like VIPs with rewards (from gift cards to discounts to exclusive or early access to new collections), thank yous and lots of general appreciation.
Step 9: Use The Power of Customer Stories
Let your customers do the talking. Encourage them to share how they use your product or service and how it benefited them. And then use that across all marketing channels.
So there you have it. The low down on Customer-Led Growth. Now, it’s your turn. Are you in?