Experience-Led Growth: What Is It and How to Implement It?

Do you really need another growth strategy?

Possibly. Our article will help you decide.

It explains what experience-led growth is and how it’s different from other growth strategies. It also covers its main benefits and drawbacks and shows how to implement it in your SaaS.

Let’s dive in!

TL;DR

• Experience-led growth (ELG) is a business strategy prioritizing outstanding customer experience as the main driver of growth.
• Just like product-led and marketing-led growth, it recognizes the importance of retaining customers to achieve sustainable growth.
• Focusing on delivering a delightful experience helps companies increase user satisfaction, which results in increased customer loyalty and retention.
• It also allows them to achieve the desired financial outcome through account expansion and increased customer lifetime value (CLV).
• Most companies that embrace the ELG strategy are also able to reduce the strain on customer support teams.
• However, the shift to ELG requires a change in corporate culture which may meet resistance. Moreover, companies often fail to track and analyze customer experience data effectively.
• To implement ELG in your SaaS, start by personalizing user onboarding to help users quickly discover relevant features.
• With modern product analytics tools, it’s easy to identify friction in the user journey. You can then tackle it by simplifying the experience and providing in-app guidance.
• To introduce new or more advanced features, trigger contextualized UI patterns, like modals and tooltips.
• In-app surveys are an effective and efficient way to collect customer feedback on how to improve the experience further.
• Predictive analytics can help you identify user behavior patterns leading to customer dissatisfaction and churn so that you can address them proactively.
• One measure that can help you prevent churn is in-app support through a resource center.
• Want to see how Userpilot can help you go ELG? Book the demo!

What is experience-led growth?

Experience-led growth (ELG) is a business strategy that prioritizes delivering exceptional and memorable customer experiences as a means to increase customer loyalty and retention.

It’s based on a simple premise:

Customers delighted with the product experience are more likely to keep paying subscription fees, upgrade to premium plans, and promote the product to their mates.

Experience-led growth vs. other growth strategies

The main difference between all the growth strategies is their main growth driver:

• In product-led growth (PLG), it’s the product that drives customer acquisition and account expansion. Users who experience the product value through a free trial or freemium convert to paying customers and its advocates.
• Sales-led growth (SLG) is an approach that relies on the sales processes to acquire customers. The sales team nurtures leads and eventually closes deals.
• Marketing-led growth (MLG) organizations leverage marketing efforts to reach wider audiences, create demand for the product, and retain existing customers.
• In ELG, the customer experience drives growth. The strategy focuses on satisfying existing customers as much as acquiring new ones.

Why is there a need for experience-led growth?

Acquiring new customers is expensive so to ensure sustainable growth, SaaS companies need to retain customers effectively. This is particularly important in highly competitive and saturated markets.

One way to do it is through ELG. By delivering excellent customer experience, companies establish a stronger connection with customers, which increases their loyalty and retention.

There’s more:

By eliminating experience gaps and delighting users at all stages of the customer journey, businesses can differentiate themselves from competitors who offer similar products or services.

The benefits of implementing ELG in your company

How can the experience-led growth strategy benefit your SaaS?

Here’s a quick overview of the main benefits.

Enhances customer satisfaction

How satisfied would you be with a buggy product that has a poorly designed UI that requires a Ph.D. in computing to use?

Exactly.

Excellent customer experience and customer satisfaction go hand in hand. It’s difficult to imagine a highly-rated product that doesn’t deliver an outstanding experience.

Increases customer retention and loyalty

Imagine you have an important event to celebrate, like a promotion. Which restaurant will you choose: one where you’ve previously received quality service and served heavenly dishes or a new one that you haven’t tried yet?

Most people will go to the first one.

The same applies to SaaS products.

Products that deliver quality experience retain customers better because people are creatures of habit and once they find something that works for them, they need to have a good reason to switch to a competitor.

High customer retention comes with significant financial benefits.

Assuming ELG is the only factor influencing retention, the longer customers stay with you, the higher their customer lifetime value, which drives sustainable revenue growth.

Reduces burden on customer support teams

ELG helps organizations to reduce the strain on their customer success and customer support teams.

How so?

The strategy promotes intuitive and user-friendly solutions that make it easy for customers to achieve their goals.

And when issues appear, easily accessible self-serve support resources allow them to deal with them whenever it suits them without contacting live agents.

Fosters a customer-centric culture

Adopting the ELF philosophy forces organizations to look at the product from the customer’s perspective.

By empathizing with their customers better, ELG companies can build products that satisfy users and address their unique pain points effectively.

Drawbacks of following an experience-led growth approach

While the experience-led growth approach has numerous benefits, there can be some challenges as well.

Firstly, implementing ELG often involves a significant shift in corporate culture and operating models, which can be challenging to manage and can potentially lead to resistance within the organization.

Secondly, no matter how much you prioritize customer experience, there’s still a risk of not meeting customer expectations, especially if you cater to a very wide user base with diverse and ever-changing needs.

Finally, to successfully execute ELG, organizations need a robust system for measuring and evaluating customer experience. Most companies struggle with gathering and analyzing data effectively, and this can hinder the optimization of customer experiences.

How to execute experience-led growth strategies in your company?

You’re still reading so ELG might sound like something for your SaaS. Here’s how you can embed experience-led practices in your organization.

Use personalization to increase customer satisfaction ratings

One way to offer a great customer experience and boost satisfaction is through personalization.

Here’s how it works:

If your product has many user personas with numerous use cases, customize the experience for each of them.

Start by collecting information about their needs and goals with a welcome survey. Make it as painless as possible by keeping the survey short and asking only for essential info.

Next, use the information to trigger an onboarding flow which helps them discover features relevant to their use cases. And only those.

Don’t overload them with info they don’t need because it’s tiring and may make them wonder if they’ve chosen the right product.

Optimize the customer journeys to remove friction

Nothing kills the mood more than unnecessary friction. You don’t want your users to get stuck at every single touchpoint. You want them to slide smoothly through the product and experience nothing but thrill and delight.

How do you do it?

Start by analyzing the user journey for friction points. Run a funnel analysis to analyze conversions at key touchpoints. This will show you where users slow down or drop off altogether.

Follow it up with path analysis to identify all the actions users take between the major milestones. This might reveal not only the causes of the friction but also successful behaviors other users could emulate.

Still haven’t found the friction cause?

Try session recordings and heatmaps for granular analysis of the user interactions with your UI.

Once you pinpoint what causes bottlenecks in the user journey, use UI patterns to guide users through. A tooltip or a hotspot is sometimes all it takes to show users how to move on.

Contextually introduce new features to boost customer engagement

UI patterns are also great for secondary onboarding. That’s when you introduce new or more advanced features.

This serves two purposes.

It enables users to realize the full value of the product and keeps them engaged.

The best way to introduce features with UI patterns is by triggering them contextually. In this way, users get to know the feature when they really need it.

For example, imagine you’ve just developed a social media scheduling functionality for your content management system.

To introduce the feature, you can create a modal that triggers when the user hovers over the ‘Post’ button. After that, another pattern, say a native tooltip, could remind them of the functionality until they try it out. Genius!

Collect customer experience feedback through surveys

UI patterns aren’t the only thing you can trigger in-app to improve customer satisfaction.

Surveys are another.

In-app surveys are an effective way to collect customer feedback at scale. That’s how you can identify ways to improve the customer experience and give your customers even more joy.

For example, customers may help you discover areas where they experience friction or request new features.

To get the best out of your surveys, combine close-ended questions with open-ended ones to gather both quantitative and qualitative insights.

For example, after asking, ‘How would you rate your overall experience with Userpilot?’, you could ask ‘How can we make the experience even better?’.

Use predictive analytics to spot at-risk customers and reengage them

Predictive analytics uses historical user behavior data to forecast their future actions.

For example, you could identify patterns characterizing the behavior of users at risk of churning.

The next step would be bundling them up in a custom event. Tracking the event will help you identify the users that might be about to churn.

You can go one step further. Use the custom event to trigger UI patterns that would re-engage such users and prevent them from leaving or a survey to collect feedback on how you can improve the product for them.

Provide proactive support to meet customer expectations

Another way to prevent user churn and help users realize the full value of the product is through customer support.

The catch is that you can’t wait for users to get to the point where they think of leaving. When they start calling or messaging your customer support team, it’s too late, there’s no return. Even worse, they could leave silently if they were fed up with the experience.

What’s the solution?

Proactive customer support in the form of a knowledge base or resource center. With tools like Userpilot, you can provide engaging and valuable resources to help them deal with their challenges independently, 24/7.

Conclusion

Experience-led growth recognizes that to ensure sustainable and profitable growth, SaaS companies must prioritize customer retention by delivering excellent customer experiences.

You can do it by personalizing the product experience for your customers, removing friction from customer journeys, providing self-help resources, and regularly collecting user feedback.

If you want to see how Userpilot can help you with that, book the demo!