Consistent experiences and personalised marketing at scale have been the gold standard in CXM (customer experience management) for quite a while.
At first, it was only large, well-funded marketing teams with the latitude to invest in the tools, resources and time required to roll out these sophisticated engagement strategies. But now the playing field is fairly level. Challenger brands have caught up and customer loyalty is more of a battleground than ever.
As a result, we’re seeing an evolution in the winning CXM strategy. Experience-led growth is emerging as the future of CXM, not just at the operational level but also in strategic planning initiatives.
As the name suggests, experience-led growth prioritises high-quality experiences to improve customer satisfaction and retain loyal customers.
The key characteristics of experience-led growth are:
Organisations refocus on experience-led growth to build long-term value. There’s a strong economic argument for retention over acquisition.
As often happens when CXM strategy evolves, we’re starting to see a codified difference between leaders and laggers in experience-led growth.
Credit where it’s due: these definitions were inspired by Spiceworks’ recent article about the future of experience-led growth strategies.
“E”xperience-led growth means customer experiences are part of the organisation’s mission and vision, whereas “e”xperience-led growth delivers activities that contribute to KPIs.
It’s a handy distinction, but don’t get too caught up in the semantics. The key takeaway – especially for CMOs and senior marketers – is that experience-led growth is an organisational strategy, not a marketing tactic.
Experience-led growth is based on a significant acknowledgment that customers hold all the power.
In the good ol’ days of product-led growth, a shiny new thing sold itself and acquisition was everything. Experience-led growth values existing customers over new ones and prioritises satisfaction over expansion.
“Experience-led growth means that both the brand and its customers derive continuing value from the entire experience journey.” (Adobe)
McKinsey uses the example of a telco that tried to lock in customers with restrictive contracts. Ultimately (and unsurprisingly), the strategy backfired. Customers defected to competitors promising better coverage and more affordable contracts.
The telco responded with discounts for new customers but excluded existing subscribers, which compounded the problem.
It was only when the company reinvented its approach to service by putting customer needs ahead of features that things started to turn around.
As the CEO said: “It’s amazing the things you can do when you shut up and listen to your customers.”
Our work with the Guardian tells a similar story. Facing revenue dilution, data siloes and waning reader loyalty, the Guardian revolutionised its operating model for customer centricity.
The experience-led strategy resulted in what the BBC called “one of the most significant turnarounds in recent British media history.”
TUI Travel underwent a similar overhaul, this time breaking down data siloes to centralise customer data from 12 countries into a “Centre of Excellence”. Our work with TUI shows that experience-led CXM strategies pay off, not just once and not just for the business.
Experience-led growth works because customers and brands benefit alike. Customers get the seamless experience they’re asking for, and brands benefit from higher per-customer value over a longer lifespan.
In all 3 examples above, experience led the conversation. The brands shut up and listened to their customers, then implemented tactics to deliver what the customers wanted and needed.
The future of experience-led growth – arguably the future of marketing, at least to some degree – is the harmonisation of strategy, people, process and technology.
For some organisations, building a foundation for experience-led growth means readjusting. For others, it means rebuilding. In either case, it’s a process.
At the centre of the process is (you guessed it) the customer. In our experience, this is often the first stumbling block.
There’s a good chance that growing brands have multiple records of the same customers. They’re not necessarily duplicates, although there is significant overlap.
To truly understand who you’re engaging with, the walls between these records need to come down. Combining customer records is the role of a unified platform like Adobe’s Real-Time CDP, which collects, manages and organises data from every touchpoint.
However, software won’t immediately solve the problem. Implementing a CDP requires cross-functional buy-in, as data needs to come from (and flow back to) touchpoints that have traditionally been “owned” by different teams.
In a 2020 study, 90% of B2B professionals agreed that sales and marketing alignment would result in better customer experiences. 85% said sales and marketing alignment was the “largest opportunity for improving business performance today”.
And yet, 97% of the same professionals struggled to align on basics like content and messaging.
Why? Because experience-led growth wasn’t an organisational strategy. It was a tactical approach to marketing.
If customer centricity is only bottom-up, it will never gather enough momentum to tilt the organisation’s axis. Experience-led growth needs to be top-down and bottom-up, or the same siloes will emerge over and over to block progress.
Personalised marketing has evolved beyond addressing email recipients by their first names. Today’s customers expect, and respond to, tailored experiences that demonstrate a brand’s understanding of their needs:
In every case, the organisational strategy will determine the rules of engagement. If a little “e” experience contributes to big “E” Experience-led growth, it’s in. If it’s a tactic that doesn’t connect to organisational goals, you have to question whether the investment is worth it.
There’s no question that customer demands have long outgrown product-centric marketing strategies. Customers are in charge now.
That means every breath a brand takes should be for, and because of, their customers. Building and maintaining a faithful following is the key to sustainable growth.
And despite the hyper-competitive world that digital marketing seems to operate in, customers want to be loyal. They’re willing to reward brands that demonstrate the same willingness in return.
Experience-led growth is an investment that yields ROI at every stage, but getting there isn’t a cakewalk. Our CXM consultants understand this better than anyone.
Here at TAP CXM, we enable experience-led growth through practical CXM consulting, technology expertise, tailored training and database management solutions. Our comprehensive and collaborative approach ensures your customers become the centre of your universe, with a powerful CXM strategy working towards long-term growth.
Get in touch to speak with our team about the potential of experience-led growth for your organisation.