Customer-Led Growth: What Is It and How To Implement a Customer-Led Strategy in SaaS?
Why should you adopt a customer-led growth strategy in your SaaS? Is it possible to increase user engagement by focusing on a customer-led growth strategy and hit the metrics you are hoping for?
In this article, we’ll be discussing the customer-led growth strategy, why it is so effective, and how you can implement it in SaaS companies.
Specifically, we’ll consider:
- Three reasons why the customer-led growth approach is the best go-to-market strategy
- Five steps to implementing the customer-led strategy in SaaS companies
- Four dos and don’ts of becoming a customer-led company, and
- Three examples of sturdy customer-led SaaS companies
Let’s begin!
What is customer-led growth?
A customer-led growth is a strategic approach that focuses on the customer, collects customer insights, and optimizes their experience.
In customer-led organizations, the customer’s feedback on the product experience is always the top priority. The goal is to satisfy and retain customers by providing them with the best possible experience.
What are the benefits of customer-led growth?
Making your customer the center of your growth strategy will only expedite your business growth. Some benefits of the customer-led growth model include:
Improve customer experience
Collecting and paying attention to user feedback allows you to understand your customer’s pain points and issues. This, in turn, makes it possible for you to fix those issues and improve the customer experience.
Simplify the onboarding process
As customer-led growth prioritizes the customer’s tasks and outcomes, it simplifies the onboarding process, making it faster and smoother for new customers. Providing a friction-free onboarding process will help your customers understand your product’s core value more quickly.
Boost customer loyalty
It is critical for companies to pay attention to customer feedback so that they know their opinions matter. By doing so, they feel like they’re a part of the business and are more likely to be loyal customers. The backbone of SaaS businesses is these power users.
Customer-led Growth vs. Product-led Growth vs. Sales-led Growth vs. Marketing-led Growth
SaaS companies are not limited to customer-led growth. There are also other growth strategies available. These include:
- The customer-led growth strategy leverages customer insights to provide customers with the value they desire and improve the customer experience.
- The product-led growth strategy places the product at the core of the customer experience. This approach counts on the product’s features, performance, and virality to lead its marketing efforts. This marketing approach was popularized by PLG businesses like Calendly, Airtable, and Dropbox.
- The sales-led growth strategy is a more traditional growth strategy that depends on a salesperson as the primary driver for customer acquisition. A sales-led company’s success is dependent on the sales team’s performance.
- Similar to the sales-led approach, the marketing-led growth strategy is driven by marketing efforts rather than product/customer experience. This approach focuses more on marketing channels like blogs, vlogs, and ebooks to shape the narrative around the brand and push its product.
How to implement a customer-led strategy in SaaS?
Customer-led growth in your SaaS company is determined by your customers and how they define value.
To be sure you’re doing it right, follow this 5-step approach:
Map out the entire customer journey and all touchpoints
The customer journey map is a diagram depicting the different stages a customer goes through.
The ideal customer journey map indicates all of the touchpoints (customer pain points and solutions) that lead to customer success (i.e. what customers hope to achieve using your product).
Be sure to integrate customer experience analytics into your SaaS products. It will help you identify and deal with bottlenecks in the customer journey when they arise.
Ultimately, the customer insights gleaned from your journey map will enable you to design better onboarding experiences that satisfy the user’s needs at every point in their journey.
Collect customer insight with a welcome flow
Begin collecting customer insights from the first moment they interact with your product. Such insights will help you better understand your customers and learn what they hope to achieve with your product.
Likewise, knowing what your customers desire from your product will enable you to create personalized in-app experiences that drastically improve the customer experience, leading to greater customer loyalty and retention.
Postfity achieves this goal by building a microsurvey for collecting customer data on its welcome screen.
You can also create welcome screens and add microsurveys to segment your customers code-free. Book a demo with Userpilot and see how you can do it.
Track feature engagement and determine what creates customer value
Which product features bring your customers the most value? Tracking users’ in-app behavior enables you to see how they interact with your product, the features they use the most (the features that bring them the most value), and the interactions that lead to higher or lower NPS scores.
With a tool like Userpilot, tracking your users’ in-app behavior doesn’t have to be too complex.
Userpilot’s advanced segmentation options allow you to keep track of feature adoption levels and general user behavior. You can create unique user cohorts to capture the behavior clusters you identify and filter your users accordingly.
Use microsurveys to collect and analyze customer feedback regularly
In addition to tracking in-app behavior, you can conduct microsurveys to get direct feedback from your existing customers. A survey may include the following questions:
- What do you enjoy about the product?
- What challenges are you facing?
- Do you find this feature easy to use?
Customer satisfaction surveys at various customer touchpoints enable you to weigh customer insights, identify friction points on the customer journey, and eliminate these.
Userpilot lets you create different types of microsurveys to measure customer success milestones and keep track of customer satisfaction at different user stages.
Step 5: Close the customer feedback loop
What use is the collection of user feedback if customers don’t get the sense that you’re acting on their feedback?
Once you’ve fixed a bug, made any changes to iron out friction points, or introduced a new feature, be sure to communicate this to the user. By communicating with your users about changes, you’ll show them that you care.
Let’s have a look at this example.
Postfity, a social media scheduling app, once had a lot of user feedback requesting direct Instagram publishing on the platform.
Once they implemented this feature, they sent out a personalized message using an in-app slide to announce it to users.
Customer-led growth Dos and Don’ts
Now let’s take a look at some dos and don’ts when implementing a customer-led growth strategy.
Ready to explore more?
Do: Regularly conduct “Voice of the customer” sessions
Voice of the Customer (VoC) is a term that describes your customer’s feedback about their experiences and expectations of your product.
The VoC program is more granular than classic feedback collection systems, which aggregate data for all users. By focusing on the individual’s voice rather than the collective’s, you will build better relationships with your customers. As a result, you can improve your product with personalized feedback.
When you conduct regular VoC sessions, you learn exactly what your users desire from your product, increasing your chances of providing customer value.
Do: Celebrate major customer success milestones
Celebrating your customer’s successes helps you create a positive relationship with them. Celebration may come in the form of a simple personalized congratulatory message. You may also offer rewards to users who achieve certain milestones.
Likewise, customer success milestones may be anything from completing a task on your product, successfully using a feature… or anything that helps customers do more with your product. Celebrating these milestones makes customers feel appreciated and builds brand loyalty.
Asana does this brilliantly using its in-app celebratory unicorns:
Don’t: Do exactly what your customers say
Although customers may be well aware of their problems, they’re not always accurate judges of solutions. Recognize the limits of customer feedback and avoid becoming over-reliant on it.
Customers will always request a new feature or a tweak to an existing product/feature. Be sure to design a system for prioritizing and ranking requests. Pursuing every new user request may ultimately prevent you from working on your vision for the product.
Also, note that the customer-led strategy is more about building what your users genuinely value and less about pursuing customer feedback. Although chasing feedback and suggestions may increase engagement or even reduce churn, its value is usually only short-terministic.
Don’t: Prioritize product roadmap based on customer feedback
Be sure to segment feedback as you do your customers. Note that the suggestions from customers may vary depending on the customer group.
For instance, your highest paying customers may have very different requests from freemium users. Users’ requests may also differ by location or market. How about churned users and their requests?
Viewing requests from the lens of user groups rather than as a single body of data can provide you with more actionable insights for your product decisions.
Customer-led growth examples
The increased awareness around the importance of the customer to the business led to a focus on customer experience in SaaS products.
But some companies have taken this even further, evolving into fully customer-centric entities in all they do. The success of these companies serves as proof of the efficacy of the customer-led model.
Amongst the notable examples of modern-day customer-led software companies are:
Workday
Scoring 98% in a customer satisfaction survey, Workday is a company built for the provision of absolute customer value. The company encourages employees to try new things and take risks to help them better serve customers.
Workday encourages a culture of innovation, constantly listening to user feedback and adjusting its products accordingly. Interestingly, not only does this make for a better product for customers, but it also makes for a better-motivated workforce.
Slack
Slack is one of the most successful SaaS companies with no sales teams. Instead, they set about uniting their engineering team with the company’s customer service team. Both teams work together to track customer concerns and adjust the product to better satisfy customer needs.
Slack’s openness to feedback has been a company-wide policy since its inception. By paying attention to the needs of its users, Slack has continued to advance, improving existing features and adding new features to its base messaging product, such as a voice chat feature, calendar integrations, and project management integrations.
Asana
Discussing its approach to growth in 2013, Asana focused on the quality of its product and its value to its customers as the superlative concern. From its inception, the use of a sales team was considered secondary to organic growth driven by rapid product adoption.
Powered by this viewpoint, Asana has gone on to develop a highly efficient project management tool that’s super easy to adopt for new users. Using tooltips, guides, and gamification, they ensure that users have the best possible customer experience with the product.
Conclusion
The customer-led growth (CLG) model expands upon the basic ideas of product-led design, with its hyper-focus on customer needs. Customer understanding and satisfaction ensure the sustainable success of this growth model.
With customers at its center, the CLG model drives both customer acquisition and retention, as well as customer loyalty.
Want to build a more customer-centric product, and collect invaluable insights with Userpilot? Book a demo today to get started!
