Last updated 10 November, 2021.
We’ve often discussed various approaches to growth, such as product-led growth, sales-led growth, or marketing-led growth, but in this episode, we look at it from another perspective. And that’s customer-led growth.
Aggelos Mouzakitis is Growth Product Manager at Growth Sandwich. He’s an expert on customer research and an advocate of customer-led growth.
In this episode, our host Edward and Aggelos talk about how customer research can help B2B SaaS companies grow to their potential.
Here’s a brief summary of their discussion. 🤩👇
What is customer-led growth?
2:17 — Jump to the Podcast.
First of all, Aggelos wanted to make it clear that “customer led-growth isn’t new, but it just exploded in 2021. It’s a business methodology that leverages customer research and qualitative data to drive growth and product decisions. It puts the customer at the core.”
However, it doesn’t mean that you should blindly follow your customers.
“It’s not about asking customers what they want. It’s not about doing whatever the customers tell us to do. Instead, we go very deep to understand the customers’ needs based on evidence and research. And we use research to drive important product, growth, and, ultimately, go-to-market decisions.”
What’s the difference between CLG and Product-Led Growth, Marketing Led Growth, Sales-Led Growth?
Aggelos explains it quite simply:
- “A product-led growth company could be a software company using a free-trial or freemium model to go-to-market.”
- “A marketing-led growth company invests into inbound marketing to capture and nurture leads to convert them.
- “Finally, salespeople trying to generate leads for the business means sales-led growth.”
“Those three are kinda conflicting,” Aggelos added.
“On the other hand, CLG isn’t conflicting with any of those three. It’s the opposite. Using customer research and leveraging qualitative data is a must-have. Especially when you are product-led, sales-led, and marketing-led, it’s not something you can live without.”
How customer-led growth helps marketers
6:01 — Jump to the Podcast.
According to Aggelos, customer research can make or break a marketing campaign.
“You can find patterns in the way users describe your value. And use these patterns, and put the words customers use into your ads, landing pages, and other assets to have your prospective customers think, ‘this is exactly what I need!’ ”
Aggelos also added that “when you go on a website and find yourself thinking ‘wow, this is exactly what I need tight now’ – it’s either luck or research.”
Our take? You shouldn’t rely on luck. Always go with customer research.
By the way, how to know if you are customer-led?
11:13 — Jump to the Podcast.
Simply put, being customer-led gives you invaluable knowledge. If you are genuinely customer-led, you’ll be able to understand the performance of all your marketing operations.
“When you are customer-led, you can know with great certainty WHY a marketing campaign didn’t work as expected, and you can fix it. Alternatively, if you can’t explain the WHY, you’re not customer-led”.
How to use the jobs-to-be-done framework to support customer-led growth
17:16 — Jump to the Podcast.
You can just copy and paste best practices. So, naturally, Aggelos’ answer to that question begins with … it depends.
“It depends on the problem. Jobs to be Done is a way of explaining consumer actions. In marketing, the traditional way would be to look at the competition to understand how to get better. With Jobs to be Done, we look at what users do and consider to achieve a specific job. In that case, our competition could be a person, a process, a spreadsheet, and our competitors.”
Of course, you should rely on data to back up your customer research findings. But the best way to do customer research is to … ask customers:
- What do they need to achieve?
- What do they need from you?
Aggelos suggests the following process to approach customers:
“You need to define what a power user is, then find 15 of them, and speak to them. By starting with power-users user interviews, we establish what is good, what is the right expectation. Then, we move to failed users — Freshly churned users—and ask the same things that we ask the power users, but the opposite way. We ask; what was it that you expected to get from our solution and we failed to give you? And finally, we ask fresh users, ‘what is it that you expect to get out of our solution?’”
🧠📚 Want to learn more about this? We happen to have a comprehensive blog post about customer research following the Jobs to be Done framework.
The “value gap” issue in marketing
23:31 — Jump to the Podcast.
“The value gap is the discrepancy between what people expect from you and what they get from you.”
Aggelos shared three concrete examples to explain what a value-gap could be:
- You have a high churn issue: “You might be overselling what you can do and underdeliver. In that case, you’ll have a lot of free trials and either no conversion or high churn very early on.”
- You have happy customers but struggle to get more: “Alternatively, you might undersell and over-deliver. You’d have power users that love you, but you’d have a marketing problem.”
- You’re putting in a lot of effort but get poor results: “You might also sell in a way that people don’t understand or simply ignore. This could mean that you have abnormalities in your funnel.”
“You can fix a positioning that nobody understands by running a value gap analysis. You can compare what your best users do within your solution versus what your worst users do. It will help you understand what’s the right position for you on the market to attract more of the right-fit users — In other words, it gives you a better understanding of who you are, or who you need to be.”
How to get there, you ask? You guessed it: customer research.
You can also learn how to build the right things and avoid building the wrong things. For instance, for product teams, it’s all about what you’re making, and for whom – what is the right person for your solution? Very often, when marketers find the answer to those questions, then they realize that they knew nothing before.”
To learn more, listen to the full episode!
What should you do next?
If you liked what you heard and would like to know more, you should subscribe to the Growth Hub Podcast on your preferred podcast platform. ❤️
Oh, and we at Advance B2B currently offer our podcast listeners a free SaaS marketing assessment. You can find it here.
Links to check out
Growth Sandwich >> www.growthsandwich.com/
What Customers Want by Anthony Ulwick >> https://www.goodreads.com/book/show/426683.What_Customers_Want
Follow The Growth Hub on Twitter >> twitter.com/SaaSGrowthHub
Follow Edward on Twitter >> twitter.com/NordicEdward