What is “customer-led growth?” Can you tell us what it is and how it’s different from other kinds of growth?

The last thing I wanted to do was throw yet another growth model into the abyss. Product-led growth has exploded in recent years, and I am a huge advocate for product-led growth. However, it’s possible to go too far in that direction. It’s also possible to go too far with a sales-led approach and a marketing-led approach.

As my business partner, Claire Suellentrop and I got to running Forget the Funnel together, we organically landed on the concept of customer-led growth. It’s something we always knew was true, but now we have a much more formalized way to help companies build a strategy based on it.

What’s your ideal customer like? Identifying those customers and then building a strategy based on what’s the most relevant experience for them really should be at the core of your marketing strategy and growth strategy. This needs to happen before you can decide, “I want to run a product-led company,” or, “We should be sales-led,” or, “We should be marketing led.” Customer-led growth is meant to come before you leverage product, sales, or marketing strategies.

How can a company implement such a customer-led growth strategy? What does it take to achieve this kind of mindset shift?

Sometimes, it’s a tough mindset shift for many founders. Marketers don’t need convincing, customer success people don’t need convincing. Even product people don’t need convincing. But it can happen where founders have this preconceived notion that “more leads means more revenue”. It’s a hard shift to make, especially when they’re thinking about growth and expansion through a product lens, but not through the lens of, “How can my customer-facing teams be strategic, help with growth, and deliver customer value in a scalable way?”

Honestly, the mindset shift really comes from the realization that you’re in the subscription business, not in a one-off purchase business. This is about retention. This is about lifetime value.

Every single month or year, your customer is making a decision whether or not they want to continue investing in your product, and you better be delivering value, or this whole subscription model that you decided to veer into, it’s just not going to cut it. If you can understand your customers and deliver a really relevant experience and then scale that, then you’re going to be successful. Offering value at scale is a beautiful thing.

How do you operationalize it?

Every company should be customer-centric and customer-led. Now, that’s hardly an innovative approach to take or philosophy to have, but in the context of customer-led growth, it’s about operationalizing it and doing what it takes — the research required to develop a hypothesis, to implement and build a customer experience on top of your product, embedded in your product, as part of your product. It’s important to build a customer experience that you can validate.

As the product grows and as your customer changes, you’ve got to be flexible enough to iterate and make sure that your customer experience is reflective of what you offer. You have to have the infrastructure and process in place so that, as your product innovates, your customer experience can innovate along with it.

What are the right metrics to measure customer-led growth?

That’s my favorite question! I’m quite anti-MQL, SQL, credit card entered, etc. I always refer to those as transactional moments. They’re lagging indicators and are not necessarily an indication of somebody getting value. Part of the reason why we’re so addicted to these life-cycle, transactional metrics is because we use marketing and email automation software and these tools push us in that direction. They’re also easier to measure, and there’s a lot of pressure to prove acquisition growth even when it’s void of meaning. The leading and lagging indicator way of thinking about it is really helpful.

We’re huge fans of the ‘Jobs to be done’ framework. So, when we work with a company to identify their biggest, top-priority customer job, we will always start with one customer job and map their experience through things like “thinking, feeling and doing”, which are classic lenses to look at how the relationship with the customer can evolve.

But, we unpack the motivations and objectives behind them — Where are they going? What actions are they taking? What actions are they not taking? What conversations are they having with us? What conversations are they having without us? We try to identify their leaps of faith in their relationship with the company.

Where are the critical milestones? This starts with them experiencing the problem, before the company is even on their radar. Most marketing automation software or life-cycles don’t account for the problem stage. They go from purchase onwards, or they go from, “they landed on our website” onwards. We believe it’s really important to understand the customer experience from experiencing the problem that they have all the way to solving their job to be done, and in a subscription business, evolving further from that customer job.

So, what happens next, once they’ve solved that customer job? What’s their next job? If we can map out those milestones, and we have all this rich customer data, then we can come up with, “What does the activated product look like? What does a healthy, engaged customer in our product act like?”, etc. Identifying and often defining new KPIs is a big part of what we do.