Table of Contents
What is Experience-led Growth?
Experience-led growth (ELG) is a business strategy to increase an organization’s customer base, revenue and profitability. This approach focuses on providing an exceptional customer experience that increases customer loyalty and retention. It is built on the understanding that happy customers are more likely to become repeat customers, recommend the company to others, and be willing to pay premium prices for products and services.
An experience-led growth strategy that measures and optimizes customer experience at every touchpoint. By analyzing customer feedback, companies can quickly identify areas for improvement and opportunities for innovation. Additionally, ELG enables companies to determine what elements of the customer journey are working well, which allows them to continue improving the overall experience.
At its heart, experience-led growth is about creating an experience that customers will enjoy and remember. It requires a deep understanding of user behavior and customer data analytics to create experiences that make customers feel heard, understood, and valued. This includes personalizing each customer’s journey with tailored recommendations or messaging based on their interests and past interactions.
Experience-led growth aims to build trust between businesses and their customers by designing effective products, services, and experiences that align with their needs. Companies must strive to understand their customers’ needs to provide them with a positive experience whenever they interact. This could include offering helpful support when they have questions or issues, allowing customers to access their products or services more easily, or even offering rewards for frequent purchases or subscriptions.
By recognizing what matters most to customers and delivering an experience tailored around those needs, companies can ensure long-term success through increased loyalty, satisfaction, brand advocacy, and revenue growth.
- customer-led growth
- customer experience-led growth
Why is Experience-Led Growth Important?
Customer experience is one of the primary differentiators between brands, driving sustained profitability. Retaining customers enables companies to earn greater value from their existing customer base and thus grow revenue. Analysis by McKinsey shows a “strong correlation between companies’ CX ratings and their revenue growth.” McKinsey reports that leaders in customer experience grew revenue at greater than 2x the rate of those lagging in customer experience.
Delighting current customers improves customer satisfaction ratings and decreases churn rates. According to the Forrester Analytics Customer Experiences Index Online Survey, companies see a high ROI from investing in CX transformation. Their research shows that customers are 2.4 times more likely to stay with a company that solves their problems more quickly and are 2.7 times more likely to spend more when companies communicate clearly.
Benefits of an Experience-Led Growth Strategy
An experience-led growth strategy can provide various benefits for businesses willing to take the necessary steps to create and implement such strategies. This approach centers around providing customers with consistent, reliable, value-added experiences that improve customer retention and increase profitability.
Increases Customer Loyalty
When focusing on an experience-led growth strategy, companies can create a deeper connection with their customers beyond just selling them products or services. Customers will be more likely to return if they feel their experience was worthwhile, as it gives them an emotional connection to the company. This sense of connection can also result in increased spending, higher ratings/reviews, better word-of-mouth marketing, and, ultimately, greater sales growth and increased customer lifetime value.
Positively Impacts Product Development
In addition, an experience-led growth strategy also helps businesses create better products and services. By delivering unique customer experiences, companies can better understand their target audience’s wants and needs, allowing them to improve their offerings continuously. Furthermore, creating innovative experiences allows companies to differentiate themselves from the competition by standing out in the market and driving more sales.
Matches or Exceeds Customer Expectations
Customers today are increasingly expecting personalized experiences tailored to their individual needs. An ELG strategy enables companies to meet or exceed these expectations by allowing for greater customization of products and services. Additionally, companies can leverage data from customers’ interactions with their brands across multiple channels to deliver personalized content that resonates with consumers. This customized approach helps build customer trust and leads to higher retention rates.
Improves Operational Efficiency
An experience-led growth strategy uses technologies to improve operational efficiency at reduced costs. For example, companies can use analytics tools such as AI and machine learning to analyze real-time customer behavior patterns to identify areas for improvement. This insight allows companies to optimize their processes for maximum efficiency while maintaining high customer service quality.
Removes Data Silos
An experience-led growth strategy facilitates better collaboration between departments and a consistent customer experience by providing team members with quick access to actionable insights from in one unified data source. By allowing all departments to access the same analytics and insights, teams can collaborate on projects and strategies based on aggregated customer data, enabling them to make better decisions that will help improve customer experiences.
Challenges to Developing Experience-Led Growth
Organizations face many challenges when developing an ELG strategy. From complicated buying processes to outdated technology and siloed data, companies overcome many issues to create extraordinary customer experiences. Below are a few of the most common challenges in implementing experience-led growth.
Complicated Buying Processes
A complicated buying process can have a significant impact on the customer experience. An overly complex shopping process contributes to customer frustration and confusion, leading to fewer completed purchases. Additionally, customers may be deterred from returning if they perceive the purchasing process as too cumbersome. Order tracking errors and delivery issues can also degrade customer trust and prevent repeat purchases.
Inconsistent Messaging Across Channels
Inconsistency in branding across channels can lead to confusion among customers and hinder experience-led growth strategies. Customers expect consistent messaging across all platforms – social media accounts, websites, and other digital channels – so businesses must ensure that their branding remains cohesive throughout all touchpoints with their customers. This means using consistent language throughout all channels when referring to products or services offered by the company and maintaining cohesive visual elements like logos or colors across all platforms used.
Delivering Personalized Experiences at Scale
Delivering personalized omnichannel experiences at scale is difficult for most companies to achieve. Customers want to be treated as individuals yet enjoy a consistent, continuous experience with a brand. Doing so requires unified data and technology to deliver contextually informed experiences which may be difficult for some companies to execute successfully.
Insufficient or outdated technology can also hamper experience-led growth. With the explosion of mobile devices and apps today, customers expect a seamless digital experience. If businesses don’t keep up with the latest trends in technology, they may struggle to meet customers’ expectations or, worse yet, create poor user experiences that could negatively affect the company’s reputation. To ensure success, companies must invest in modern technologies such as cloud computing and analytics tools to provide customers with convenient digital experiences.
Lack of data analysis is another issue preventing experience-led growth for many organizations. Without proper data analysis tools, it’s difficult for companies to measure performance and make informed decisions about their customers’ needs and behaviors. Companies must use data analytics solutions such as segmentation, clustering algorithms, and predictive analytics to identify customer segments or understand purchase patterns to deliver better experiences tailored to individual customers’ needs.
How to Implement an Experience-Led Growth Strategy
The modern business landscape is highly competitive, and companies must constantly look for ways to increase their customer base and drive growth. An ELG strategy is an effective way to achieve this. It involves identifying and responding to the needs and wants of customers by creating a customer-centric business model and personalized customer journey that will help them stay engaged with the brand.
To implement an experience-led growth strategy, organizations must first discover customer needs and then design solutions that add value. Creating a roadmap to deliver customer-centric experiences across all brand touchpoints and channels will help build a consistent experience.
To build the roadmap for a customer-focused business model, the company must first decide on the desired financial outcome and relevant customer-focused KPIs (wallet share, cross-sell rates, and retention rates) and prioritize customer experiences that impact those KPIs.
Develop Customer-Focused Business Models
A customer-focused business model is integral to an experience-led growth strategy. It is designed to put the customer’s needs and wants first, create loyalty, and ensure their experiences are positive from start to finish. As Anil Chakravarthy, president of Digital Experience Business at Adobe, states, “It requires connecting the complete customer experience — from acquisition to engagement and retention.”
To create customer-focused business models, companies use research, surveys, interviews, and focus groups to uncover insights about their customers. They then use this knowledge to design products, services, and experiences tailored to meet those needs. The ultimate goal is for customers to feel valued and that their preferences are taken into consideration when it comes to making decisions.
For a company to successfully implement a customer-focused business model, it must have strong leadership that puts the customer first. This means having team members who are willing to go above and beyond to provide excellent service. It also means investing in training programs and technology for better customer communication and quicker resolution of issues or problems.
The benefits of having such a model in place can be seen in increased sales numbers due to improved customer satisfaction levels and increased loyalty among customers who recognize how much companies value them.
Redesign the Customer Journey
When implementing an experience-led growth strategy, an organization may need to redesign its customer journey to better align with customer needs and connect the various touchpoints involved. Doing so will create a consistently positive experience.
Designing a successful customer journey requires an in-depth understanding of the user’s goals and how they intend to achieve them. Additionally, it requires considering their motivations, behaviors, preferences, and expectations throughout the entire experience. This approach allows for more tailored interactions that align with customer wants and needs and provide value throughout the journey. By creating thoughtful customer journeys rooted in individualized experiences, businesses can drive loyalty levels and increase rates of repeat purchases.
Further, when new customers come through your door, these personalized experiences foster an environment conducive to increased trust between them and the brand—ultimately leading to better relationships. In addition to increasing trust between buyers and brands, designing strategic customer journeys also improves conversions by giving users clear paths toward completing a desired action or purchase goal.
Create Personalized Experiences
Developing personalized experiences is essential to experience-led growth. It begins with market research, surveys defining consumer behavior, and analytics tracking customer usage data. Once the ideal customer profile has been determined, the organization can develop a plan of action that focuses on delivering great experiences tailored to their needs. This could include offering discounts or exclusive promotions, providing personalized recommendations, or customizing products and services based on preferences. In addition to offering tailored experiences, businesses must focus on creating strong customer relationships. This can be done by building loyalty programs that reward customers for their repeat visits, maintaining consistent communication through email or SMS campaigns, or simply responding directly when customers ask questions or feedback.
Predictive analytics can help deliver the right communications to the customers at the right time in their customer journey. Personalization based on language, geographical location, audience segment, and other customer data can help further refine communications in a way that is more engaging and impactful. Personalization at this level goes a long way to increase customer engagement and retention.
Create Value Along the Customer Lifecycle
Creating value at each customer lifecycle stage is vital to achieving experience-led growth. Creating value includes providing exceptional customer onboarding and support post-purchase, cross-selling based on customer data, upselling based on customer behavior, and sharing special customized offers for current customers.
According to McKinsey’s analysis of research on growing through customer experience, “successful experience-led growth strategies—those that increase customer satisfaction by at least 20 percent—can deliver a range of significant financial benefits. In particular, they can increase cross-sell rates by 15 to 25 percent, boost companies’ share of wallet by 5 to 10 percent, increase cross-sell rates, and improve customer satisfaction and engagement by 20 to 30 percent.”
Implement Sales and Billing Technology
Companies can ensure they provide consistent and reliable customer experiences through the sales and billing process by implementing integrated CRM, CPQ, and billing software that put the customer at the forefront. Customer Relationship Management (CRM) systems helps businesses gain insights into customer behavior, allowing them to make decisions that will improve overall customer experience. With CRM, organizations can track customer interactions and provide personalized service based on individual preferences and needs. This enables companies to tailor their approach to each customer, fostering stronger relationships and driving more sales.
CRM platforms also allow businesses to automate specific tasks, such as follow-ups with customers or surveys to understand the overall experience better. This allows companies to quickly pinpoint areas of improvement where the customer experience can be optimized. Furthermore, by integrating data from other systems, such as analytics or marketing automation, organizations gain a holistic view of the customer experience, which can be used to create targeted campaigns and optimize the entire journey.
Configure-Price-Quote (CPQ) software is another essential tool in optimizing the B2B customer experience and driving ELG. CPQ solutions are software tools that help businesses automate their quoting and ordering processes. CPQ software helps companies align sales operations with experience-led growth strategies by creating positive customer experiences during the product configuration, pricing, and quote generation process. Guided selling within CPQ enables sales teams to focus on customer needs while selecting the right products or product bundles to order. CPQ also streamlines time-consuming tasks such as contract generation, pricing and discount calculations, approvals, and more to enable sales teams to respond more quickly to customers’ requests for price quotes. By automating these processes, CPQ solutions allow businesses to focus more of their staff resources on creating positive customer experiences that drive loyalty and long-term revenue growth. CPQ solutions also provide the data analysis tools necessary for effective ELG strategies.
Billing is another area of operations that companies digitally transform to provide better customer experiences. Billing platforms are now used to propel businesses toward experience-led growth by streamlining the payment process. They provide a secure and reliable way for customers to make payments online or via mobile devices. This helps reduce paperwork and increases efficiency so businesses can focus more on creating memorable experiences, such as interactive customer service or personalized product recommendations.
By optimizing billing processes, billing platforms can also help create improved customer loyalty and retention. For example, they may offer subscription and payment plans that allow customers to pay in flexible installments or one-time payments — which will, in turn, increase their trust in the business while ensuring recurring revenue streams. Additionally, billing platforms may provide real-time analytics so enterprises can better understand their customer’s behavior and preferences — allowing them to tailor experiences accordingly.
Effective CX Measurement
Collecting meaningful customer data is one of the most critical aspects of implementing an effective ELG strategy. Feedback can be gathered through surveys, focus groups, interviews, or other research methods. However, it’s important to remember that traditional methods of collecting feedback are often unreliable as they don’t accurately reflect a company’s actual performance. Therefore, employing more advanced techniques, such as sentiment analysis and voice analytics, is essential when collecting customer feedback.
Another key component of effective customer experience (CX) measurement is leveraging data analytics tools such as heatmaps and NPS (Net Promoter Score) scores. Heatmaps visually represent user behavior patterns across different pages on a website or application by tracking mouse movements and clicks. On the other hand, NPS scores measure customer loyalty by asking customers if they are likely or unlikely to recommend a product or service on a scale from 1 – 10. By analyzing these metrics over time, businesses can identify areas where improvements are needed and potential opportunities for new products or services based on user needs.
Finally, successful implementation of effective CX measurement requires businesses to evaluate their performance against industry standards and best practices constantly. Companies need to set clear objectives before beginning any ELG initiatives so they can continuously monitor their progress toward those goals over time. Additionally, businesses should strive to use relevant KPIs when comparing their current levels of performance against those benchmarks so they can adequately measure success.
People Also Ask
What is an experience-led business?
An experience-led business focuses on providing customers with an enjoyable and memorable experience from the moment they enter their premises to the end of their purchase. This type of business seeks to create a unique customer journey to increase customer retention.
An experience-led business creates an environment where customers feel special, appreciated, and understood. This type of business provides personalized customer service, comprehensive product information, and valuable promotions. In addition, it often focuses on creating an emotional connection with its customers by offering activities or events that cater to their interests.
By creating a customer-centric environment, an experience-led business can foster customer loyalty. Not only do these businesses offer higher quality products and services than competitors, but they also aim to build a strong relationship with each customer. As a result, these businesses typically have higher ROI as customers are more likely to return for future purchases.
Furthermore, an experience-led business typically seeks to provide an easy way for customers to interact with them digitally and in person. This includes having an efficient and user-friendly website so customers can easily navigate through it without feeling overwhelmed or frustrated. Social media plays a vital role in this strategy by allowing the business to engage directly with customers through different channels, such as reviews and comments.
What is the difference between product-led and customer-led growth?
Product-led growth and customer-led growth are two distinct approaches to driving the success of a business. Product-led growth focuses on creating a product that is easy to use and highly attractive to customers. In contrast, customer-led growth focuses on understanding customer needs and developing strategic solutions to meet those needs.
The primary difference between the two strategies is that product-led growth emphasizes the product experience, while customer-led growth emphasizes the customer experience. Product-led companies tend to focus on product features, usability, and design; meanwhile, customer-led companies focus more on providing an appropriate level of service, meeting customer expectations, and providing education around their products.
Customer-led companies also tend to have a deeper understanding of their target customers and use this insight to create better experiences for them. For example, they prioritize market research to identify customer preferences and then use that feedback to improve or adjust existing products or services. This approach results in increased loyalty from existing customers and new prospects.
On the other hand, product-led companies tend to rely more heavily on data analytics and user testing during development cycles to optimize their offerings for maximum effectiveness. They also focus more heavily on product marketing than customer service, often leveraging digital channels like social media or online advertising campaigns to reach larger audiences quickly.
Ultimately, both strategies are effective when appropriately executed; however, businesses must determine which approach best suits their needs before committing resources. Companies should consider the goals they want to achieve (e.g., increase usage/engagement or contract renewals) and whether their target users prefer an intuitive self-service interface over personalized support when determining which strategy will best meet their objectives.