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Four Reasons to Adopt a Customer-Led Growth Strategy

Successful customer-led growth strategies must include data collection so the CS team can track patterns and discover prevalent trouble spots and successes that they can either fix or lean into for superb customer experiences.
February 23, 2023
Blog

Software as a service (SaaS) companies have many different strategies at their disposal for growing their brand: marketing-led, sales-led, and product-led, to name a few. There's rarely a one-size-fits-all approach to growth. All are great and have their place in the mix at different points in a company’s life cycle.

Four Reasons to Adopt a Customer-Led Growth Strategy

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Benefits of customer-led growth

Seeing through our customer success lens, we've found that customer-led growth is one of the best strategies for a start-up or young SaaS business. Most budding companies do well with this strategy as it optimizes funds because the focus is on gaining and retaining customers by giving them what they ask for. You and your product development team avoid wasting time and money on developing something the customer doesn’t care about.

Not only can you optimize spending by giving your customers exactly what they want, but a customer-led growth strategy also:

  1. Boosts positive customer reviews: As you interact with customers, learn what they like, and show your concern for their needs, you’ll enhance their perceptions, retain their business, and improve your products based on their feedback. The overall result is an unbeatable customer experience that creates happy customers who brag about you.
  2. Boosts innovation: Wouldn’t it be nice if you could see your product through the eyes of your customers and figure out exactly what they want and need? Customer-led growth allows you to do just that. As a result, product development comes together quicker because developers have insight into what customers crave.
  3. Boosts employee motivation: Employees are motivated when they feel empowered to make changes and see them through. Watching their ideas come to fruition and having a positive impact on everybody, from their customers to the product development crew, creates more driven and satisfied employees, which further benefits the customers and the company.
  4. Boosts customer success: Listening to your customers and using that knowledge to improve your products and their experiences will accomplish what every SaaS company hopes for–remarkable customer success.

Steps to creating a customer-led culture

Planning, collecting data, and communicating are essential ingredients for success and transitioning to this new strategy takes time and planning. Here are some steps to guide your team to the best results in a customer-led growth strategy.

Step 1: Discover the customer journey.

Chart your customer’s journey. Create a diagram of their different stages, indicating what they hope to achieve, common pain points, bottlenecks, and solutions.

Step 2: Acquire the right tools.

You'll need the proper CS tools to collect feedback and gain valuable insight into your customers' habits and values. Learn how they feel about the user interface (UI) and experience. With the right tech, you can begin collecting that kind of beneficial information from your client's very first interaction with your product. Look for technology that can help you segment customers and recognize commonalities to improve your product and their experiences.

Step 3: Complete the feedback loop.

Once you know what your customers need or value, keep them looped in on product updates and new, relevant features. This touchpoint can be easily automated with a customer success tool.

Organized customer-led growth

If the thought of having your customers driving changes makes you nervous, first of all, that’s understandable, and secondly, have no fear–it isn’t as chaotic and all-consuming as it might sound when implemented effectively. As you respond to customer needs, keep the following tips in mind to keep you on the path to business growth and customer success.

  1. Collect and analyze information to better understand your customers. Ask what they enjoy, what their challenges are, and what features of your product they found easy to use. Micro surveys and Voice of the Customer (VOC) sessions are a few great ways to accomplish this.
  2. Celebrate customer success achievements. Acknowledge customer milestones or company team accomplishments. It could be as simple as a brief congratulatory message or a more tangible reward.
  3. Avoid bending to the individual customer’s every whim, as this is a surefire path to burnout and prevents you from effectively reaching dozens to hundreds of other customers in need. Recognize that a customer’s suggestion may not be the most prudent regarding what’s best for the company, so use discretion and metrics to help you rank and prioritize requests. With the right CS software, you can segment your customers and group similar requests to find patterns and common pain points among groups of customers.

Customer-led aligns with product-led.

Product-led growth is a popular growth strategy in the SaaS industry. Customer-led growth closely aligns with it but is more holistic and all-encompassing. Customer-led growth also focuses on the product, but to the extent that customer needs and demands are considered when revising or adding new features.

Catering to the customer is effective with the right tools and methods. It has worked for well-known SaaS companies like Slack and Workday, and it can work for you. Successful customer-led growth strategies must include data collection so the CS team can track patterns and discover prevalent trouble spots and successes that they can either fix or lean into for superb customer experiences.

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