Customer-led Growth – The New B2B Framework for Sustainable Growth and Advocacy
Gal Biran, Obsession Summit, June 2022
“Can you hear the sound of the stampede? What you’re hearing is the sound of the Customer-led Growth movement and its coming in fast!”
Customer Marketing has been the 3rd fastest growing position on LinkedIn in the past 5 years. Can you guess why? Because companies that leverage customer marketing outperform their competition.
Forrester Research said it best:
“Organizations that put the customer at the center of leadership, strategies and operations, outperform their non-customer-obsessed peers.”
The reason for this continuous boom is that Customer Marketing, and the overarching Customer-led Growth strategy, create a framework to influence a new paradigm of revenue-influencing metrics, at scale. It’s a framework that unlocks impact on upsell, expansion, loyalty, advocacy, onboarding, retention, and yes, you guessed it, GROWTH.
When a group of B2B CMOs were asked by Forrester Research what they would like to see in their dashboards, the answers were both surprising and interesting; They wanted to see influence on Upsell, Lifetime Value and Advocacy. These revenue-oriented metrics were at the top of their minds and their priorities. Not CAC or CPA as any B2B marketer would expect.
What does the fact that CMOs are now looking at these types of metrics tell us?
It tells us loud and clear: Things are changing. We are all amidst a big evolutionary step and its as exciting as it is fascinating to be a part of it.
If you’re looking for a sign, this is it!
- Companies that are customer-obsessed have 3X higher revenue growth.
- Companies that are customer-obsessed have 3X higher profitability
- Companies that are customer-obsessed have 3X higher retention
- Companies that are customer-obsessed have 2X employee engagement
Big impact, big challenges, right?
No transformation is complete without its challenges.
So, if Customer Marketing is so compelling, what’s the problem? Well, we’re all experienced enough to know that no real progress comes without its hurdles.
When companies were asked what their biggest challenges in demonstrating the value of customer marketing were, they pointed to:
- Connecting Customer Marketing activities to business impact. This is important because we know that customer marketing influences these metrics and that that’s also the biggest driver of its adoption. CMOs want to see these metrics but they can’t always make the connection.
- Making sense of overlapping roles and functions. The fast growth and adoption of these programs has left many baffled as to who does what. Who owns the various programs and functions that are gradually being rolled under Customer Marketing?
- Gaining leadership buy-in. Many leaders in our space have yet to be educated on the real impact and potential of Customer Marketing and Customer-led Growth. Sure, customer stories are important but how do they affect the bottom line? What’s new here?
Just like these strawberries, we are on a path to industry maturity.
It’s called Customer-led Growth, and it’s coming fast.
Although the concept of Advocacy has likely been around since biblical sheep buying times, it’s been evolving a lot over the past decade or so. It started with Advocacy managers and programs popping up all over the landscape. Now, with over fifteen thousand professionals holding Customer Marketing related titles on LinkedIn, it’s clear the industry is waking up to the many remarkable things you can accomplish with your customers.
We’re even seeing more recent iterations of some these titles like Customer Marketing Upsell manager, Customer Retention Marketing Lead, and more. This is extremely interesting because it’s a testament to where we are really heading, and that’s Customer-led Growth or CLG as we like to call it around here.
CLG is what ties customer advocacy and customer marketing to the growth aspect we’ve been looking at. And it’s an evolutionary process, so today we’re seeing Customer Marketing teams act as a sort of an internal bridge between cross-functional teams (Sales, CS, Product, Education, Community) and the customer. They run Customer Marketing programs in the service of these internal teams and support their KPIs.
In HubSpot for example, they have a function called Customer Success Marketing and guess where that function lives? Customer Marketing. Then externally they’re also building new bridges. Customer marketing is now evolving into functions like community marketing, and partner marketing, and marketing to customers at large – not just to an elite group of advocates.
Every big change starts with a mindset.
Being truly customer obsessed requires a change in mindset. We need to think beyond advocacy about multiple programs that can be run with all sorts of customers throughout their lifecycle. We need to think not just of the number of advocates we’re recruiting, but of the revenue we are influencing. We need to think of internally serving not just sales, but the entire organization and its business goals – through customers.
Why settle for a single Customer Advisory Board (CAB)? Why not have a CAB for the product team? For the Customer Success? For Enablement? For Onboarding? Let’s be customer led in everything we do. Remember Forrester’s quote up there about leadership, strategy, and operations? Why not infuse the customer into every department in the organization and into the way you work?
It’s time to evolve from a focus on just one group of advocates to a focus on the entire customer base, and what we can learn from them and for them. In other words, being customer obsessed means evolving from Customer Marketing to Customer-led Growth.
What does it take to become a CLG company?
We need to make some deep-rooted changes and adaptations that may not be easy at the onset. We need to change our values as a company and embed the customer at its core. We need to share these values and align with teams across the company on them. We need to adjust our expectations for impact. We need to look at a new set of outcomes and KPIs, which will be shared by everyone in the company. And lastly but not least-ly, we need to make changes to our organizational structure and set up teams for solving, problems horizontally, rather than vertically.
There are some great companies out there already making some very big waves this way:
- HubSpot is seeing 55% higher retention for customers in their advocacy and engagement program
- Gong has defined its Customer Marketing North Star in 3 pillars of Renewal & Adoption, Expansion & Growth, and Advocacy
- Sendoso (shoutout to the customer marketing powerhouse that is Leslie!) has seen 40% higher utilization (adoption) rate of in-program customers
- ProfitSolv has seen 48% conversion on referrals with 20X ROI
This is big.
Notice that all these KPIs/ metrics/ outcomes are different from the traditional look to number of recruited advocates or given reviews. This is not to say out with the old! Of course, these metrics are important for the understanding the vitality of the business and its operational health. But they aren’t helping to understand the impact of these activities on the bottom line. The newer metrics are what organizations really care about when building their futures.
One way to think about it is to see how CLG influences all 3 revenue pillars:
- Acquisition: The classic acquisition pipeline metric that is influenced through references, advocacy, reviews, customer stories and more.
- Upsell & Expansion: Metrics we address to support Customer Success goals. This isn’t about replacing it’s about a new level of collaboration that is unlocked with Customer marketing and advocacy.
- Loyalty & Retention – When companies are engaged in your program and they are constantly educated, listened to, supported, they are far more likely to retain.
And yet, most companies still aren’t doing enough in Customer marketing.
Most companies still have small budgets and small teams. Forrester estimates that most companies still allocate only 20% of their marketing budget to customer marketing. They estimate that this will go up to about 50 within the nest 3-5 years, and then shift to a bigger investment in lifecycle and customer marketing in relation to demand generation, over the next 10 years.
Half of Zendesk’s growth comes from its customer base. If half of your growth is coming from your customers, you need to market to them and not just to prospects. CMOs, CEOs, understand that they need to invest in lifecycle marketing because of this precisely.
How do you grow in Customer Marketing?
You start small… crawl, walk, run. Start with 1-3 programs with 2-3 KPIs that matter to the organization. For example, if it’s a reference program, be sure to show how that influenced revenue and sales, if it’s an adoption or onboarding program we want to show how it ties into overall satisfaction and retention.
We’ll leave you with these 5 guidelines for success to follow in your Customer Marketing journey, as you make your way towards a full-blown Customer-led growth company:
- Set customer marketing goals that align with company goals. Support what’s important for the organization, not just for your team.
- Coordinate customer engagement and lifecycle marketing internally. When various teams are reaching out to the customer without coordination, the experience is damaged.
- Measure outcomes, revenue influence and business KPIs. Know the numbers, whether it’s a tool or a spreadsheet you’re using, connect the dots and report on them.
- Create a cohesive experience for customers and internally. Be transparent about your efforts and goals and give teams confidence when accessing customers.
- Become (even more) data-driven, leverage automation. With so many systems collecting data from your customers, it should all be poured into making better decisions and improving engagement.
This is how you start building your customer marketing and CLG framework. Be Customer-led Growth minded when you plan your customer marketing and advocacy programs. Think about your internal clients and the customer experience across all touch-points. Engage with your customers where they are in their journey. Redesign the whole notion of customer engagement.
This what we are about at Base, and we have a great future of Customer-led Growth planned for us all.
Ready to know more? Watch the full session, have a look at our platform, and then reach out for a demo.