Customer-Led Growth: The Role of Customer Marketers 11 months ago

Mobilizing Customer to Drive Growth

Jeff Ernst gave the concluding keynote at the Customer Advisory Board Conference on March 28, 2023. Jeff was asked to inspire expand the thinking of Customer Advisory Board managers by showing them how they can elevate their roles to drive Customer-Led Growth (Read the Customer-Led Growth Manifesto)

Here is the video from that keynote:

Introduction:

Let me introduce Jeff Ernst. Jeff is one of the top thought leaders in the Customer Marketing space, and founder/CEO of SlapFive. We’ve spoken a lot about Customer Advisory Boards, and most recently Partner Advisory Boards, but we wanted to finish the conference by connecting Customer Advisory Boards to an organization’s overall revenue growth strategy. So Jeff’s going to help us make that connection now.

Jeff:

Thank you for having me, Gavin. We are going to open up the aperture a little bit. There’s been a lot of great content today about running Customer Advisory Boards. What I want to share with you now is the bigger picture of where Customer Marketing needs to focus this year and moving forward. What I’m going to share is based on a lot of data that I’ve collected over the years because I have actually been responsible for Customer Advisory Boards at every company I’ve worked at for the last 30 years, along with the other forms of customer engagement, like customer conferences, customer enhancement voting, customer advocacy programs, case studies, you name it.

Back in 2010, I had the opportunity to join Forrester, where I was a principal analyst serving CMOs, advising them on how they can mobilize their customers to drive revenue growth for their organizations. It was a fascinating practice area, where we coined this term Customer-Led Growth. This guidance was so well received by our CMO clients, that my CEO tapped me on the shoulder and said, “Jeff, we want you to do this for Forrester.”

I became head of marketing at Forrester, and in practicing what I preach, I realized I wasn’t just going to do the standard marketing things because the company was already doing a great job at the traditional marketing tactics. Instead, I needed to figure out how to accelerate the top strategic growth initiatives set by the CEO and the board.

They had two strategic growth initiatives. One was to better compete with Gartner and gain market share against the 800 pound gorilla in the analyst space. The other was to expand the footprint, the annual recurring revenue within our enterprise accounts because we were barely penetrated in very large accounts.

To address the first one, what I realized from interviewing our salespeople is that they were constantly getting the objection, “We’re already spending $X million dollars with Gartner, why do we need a second analyst firm?”. I quickly realized that we didn’t need a strategy to compete with Gartner, we needed one to coexist with Gartner. We had to convince Business and Technology leaders that they need both Forrester and Gartner.

So I developed a Customer-Led Growth initiative to capture the voice of Forrester clients who were also doing business with Gartner. We had them tell their stories about the types of initiatives they were coming to Forrester to help with, that they wouldn’t take to Gartner. Then we infused these stories into Marketing’s lead nurturing campaigns, and put them on a landing page and gave it to Sales, telling them, “Whenever you get the Gartner objection, don’t try to overcome it yourself, use this.”

It was a game changer. I had one Sales guy who had been there for 20 years tell me, “Jeff, this is the best thing I’ve ever gotten from marketing here or anywhere else I’ve ever worked.”

For the second strategic growth initiative, which was to expand our footprint within our enterprise accounts, I came up with a plan to tap into our power users, the people within those accounts who were making great use of Forrester’s services to power their own initiatives. We captured their stories, had them share those with their peers within other departments and product areas of the company. They loved doing this because it gave them a way to brag about their own successful projects. And guess what? We ended up doubling or tripling the recurring revenue within many of these enterprise accounts. So that just convinced me of the power of customer voice as well as the importance of this concept called Customer-Led Growth.

That’s what I’m going to talk about today. I’m going to talk about why customers are so key to revenue growth. I’m going to define Customer-Led Growth. I have a definition that’s slightly broader than how it’s been used in the customer success world up to now. I’m going to give you the DNA of Customer-Led Growth, let you see what it really is, how to tell if you’re doing it or not, and how it’s different than what most Customer Marketing leaders are doing today. And then to really bring it to life, I’ll share some examples with you about Customer-Led Growth initiatives I’ve performed that you can emulate within your own company. I’m going to tie it back to CABs to show how even the way that you work with CABs can be done in a way that drives Customer-Led Growth.

Why are customers key to revenue growth? Well, number one, and research by Forrester has proven this over and over again. In every conversation I have with revenue executives, I hear the same thing. The buyer-seller trust gap has never been wider. There’s just so much mistrust here. How do we know this? Well, we know it because buyers take every step possible to tune out our marketing messages. We know this because buyers put off talking to salespeople for as long as they can in their buying process, to the point where they’re ready for pricing or to get that final contract or proposal. This means that more than ever you need customer proof to earn trust and bridge that trust gap.

Secondarily, traditional marketing and sales methods have rapidly lost their effectiveness. SEO had so much shine and luster in the past and it’s still important to do, but that’s not going to fill your funnel. Your lead generation and nurturing programs aren’t going to break through the noise in the market. And traditional sales methods aren’t going to get customers over the goal line.

Traditional sales and marketing methods need to be infused with, and sometimes replaced by customer voice. At the end of the day, buyers want to hear from their peers, right? They don’t want to read your classic challenge-solution-result case studies. They want to hear the first person account of what it’s like to be a customer from their peers. Including things like, how did your customers recognize that they needed to make a change in the first place? How did they convince their colleagues to get on board with this initiative? What challenges or pitfalls have your customers hit? These are questions, fears and doubts that your own sales and marketing people can’t address because they weren’t there when your customers went through this.

Now we have this ugly fear of recession which is causing even more scrutiny of purchases. There’s more due diligence because every team has been told, “If you can get away with what you have today, then don’t buy anything new.” There must be even more proof of potential ROI or demonstration of the pain that your solution solves to justify purchases. How do you get through that increased scrutiny? Well, it’s by having customers share their experiences, share how they’ve achieved the ROI.

The last one? Let’s face it, your customers are your best sales and marketing assets. Anything that your company can do, your customers can do with more authority, with more believability, with more trust.

What is Customer-Led Growth?

Here’s how I define Customer-Led Growth. The definition of Customer-Led Growth has a couple of key elements that I’ll pick apart here. First, you are proactively designing and executing customer programs. Proactive is the key part here, you’re not waiting for requests from other departments that you fulfill.

These programs mobilize customers to drive strategic growth initiatives. Maybe your company wants to penetrate a new market, a new industry, a new vertical. Perhaps you’re launching a new product, maybe you’re in a mid-market company going upmarket to the enterprise or vice versa. Or you’re repositioning yourselves from having a portfolio of point products into being a suite or platform provider. Those are just some very common strategic growth initiatives.

And these are the growth initiatives set by your C-level executives. Why is it so important? Because if you want to get the resources, if you want to get the recognition, if you want to get the career growth you aspire to, you need to be attaching your work to what your C-level executives care about. If you’re a public company, the C-level executives’ growth initiatives are the things that your CEO talks about on earnings calls. Do you know what those are? If you’re a private company, these are the things that are being talked about in your company all-hands meetings as your priorities for the next two or three quarters. Those are the initiatives that you must be aligned with.

You need to proactively come up with programs, take them to your C-level executives saying, “Here’s an idea I have for tapping into the power of our customers to help drive this initiative forward, Mr. or Ms. Executive who is responsible for that initiative.” And you know what? Your executives are going to love you for doing this because they don’t know the art of the possible themselves when it comes to understanding the power of customers.

I talk to a lot of CEOs, a lot of CMOs, a lot of VPs of Sales. When that comes to how customers can help grow the business, they tend to think about it in two things. One is referrals. Yeah, we want to get more referrals from our customers. And then two is case studies, you know, we just need more case studies. They don’t know and don’t appreciate the full power that customers have. And that’s where the onus is on you.

How do you know if you’re doing Customer-Led Growth?

You’re doing Customer-Led Growth when you go to those C level executives and you have conversations with them to find out what your company’s top growth priorities and initiatives are. This goes beyond just arming sales with customer proof. That’s table stakes. These are the specific things that your C-level executives have set out as named priorities. There’s almost always one executive charged with making sure it happens. They’re always cross-functional where that executive is managing or overseeing this initiative across functions.

You go to them to find out what that is, and then you proactively formulate strategies for how you can mobilize customers to drive those specific initiatives. Then you come up with creative ways that the customers, their voice, and their activities can be put to work to either knock down the obstacles to achieving those initiatives in the market or to seize on the opportunities.

You then socialize these programs across your company to gain the enthusiastic support from those executives. You want them to give you air cover to validate it and give it importance and then parlay that into gaining the cooperation and collaboration of other departments. And I heard our last speaker talk about how it takes a village. We all know that with customer marketing, it takes a village to do it, right? I consider it one of the toughest jobs in a company because it requires the most cross collaboration. You can’t do your job without the help from the rest of marketing, you need the buy-in and cooperation from sales, you need customer success to be totally on board in supporting your programs and helping you increase your reach to customers and even your products group. You socialize and you have the prowess to earn that trust and support.

Then you execute these programs according to your plan flawlessly, of course. And you then measure the impact that these programs are having on revenue growth. You come up with what those measures are. There’s not just a single measure. So let’s say your growth goal is like what I had at Forrester where one of my initiatives was to expand our footprint within our existing large enterprise accounts. We were able to measure that. We could show here’s how much annual contract value we had with Company X at the beginning of the year, here’s the programs we ran, and here’s how much of an increase in ACV it led to. I was able to produce 100 to 200% growth within individual accounts by implementing this Customer-Led Growth strategy.

Finally, you communicate that success across the company. Every career marketer knows that you need to be marketing your work as well. Well, the same thing here. If you’re driving Customer-Led Growth initiatives, you need to let people know that it’s happening so that the next time you come up with an idea for a growth initiative or a growth strategy to drive your initiatives forward, you will  get even faster buy-in and acceptance for that.

Examples of Customer-Led Growth initiatives

I’m going to give you a couple of examples that come from my career experience because I’ve been doing Customer-Led Growth since before it was a thing. I’ve always done it kind of intuitively. I’ve always been wired to think this way which is why I’ve always had ownership of customer programs.

We’ll start to drive co-creation because this is a slam dunk for Customer Advisory Boards, to be tapping into your CAB members to help drive co-creation and innovation. In 2000, I became head of marketing for the first time and that’s when I started to really embrace the power of customers to drive revenue by being our best marketing and sales resource.

I was with a company called Open Market, and this company was strong in the retail and media industries because they had a B2C e-commerce solution. They hired me to come in and build out a strategy to target the B2B e-commerce market, which is very different, as you’re dealing with purchase orders instead of credit cards and you’re dealing with inventory requirements, so you need to tap into your inventory systems and do drop ships and things like that.

We didn’t have a CAB, so I pulled together a roundtable of a bunch of customers in the manufacturing and distribution industries. We had them tell us exactly what a B2B e-commerce solution needs to do. And we learned a ton. They showed us the types of things that they had custom-built because there weren’t products on the market to do this. We designed this great solution that was co-created with this initial set of customers, and they helped us with that innovation.

That leads us into example two because I’ll continue this story about this initiative for B2B e-commerce. Now we needed to enter into that new market. We were a total unknown, but luckily, we had this group of customers that helped us with co-creation and innovation who were totally bought into the vision because you know what, their fingerprints were all over that vision. They were really bought into it, really jazzed about it.

We captured their voice about not only validating the vision of where Open Market was going to go and take these manufacturers and distributors, but then we also had them talk about what they were all doing already as manufacturers and distribution companies with our solutions at the time. This we did through webinars, by creating some videos of those customers in their own voice, answering very selective questions to reinforce the direction that the company was going in.

A third example is migration from legacy to modern app. A lot of companies are going through this and there’s a lot of flavors of this. The one very common flavor is companies that have been in the on-premises software industry for years who are now migrating to SaaS. That’s a big challenge because you’re going from license revenue where you get all the money up front to an annual subscription model where you’re getting less money upfront, but you have the recurring revenue. There’s a big risk as you’re migrating from on-prem to SaaS. If users of your legacy app have to switch anyway, they may investigate other SaaS vendors already on the market. You might lose customers in the migration.

Customers are the secret to success when you’re doing that type of migration. I did that at a company called Kadient, which had a legacy on-prem client/server system for RFP responses and proposal automation. We were migrating it to SaaS and repositioning it as a broader sales enablement platform. Like many companies making this transition, we didn’t put all the legacy bells and whistles into the new product, but we added cool features to the SaaS app that you couldn’t do in the client/server version that were even more attractive.

To overcome the resistance to upgrading, we tapped into the voice of our customers who were early adopters in making that switch and had them talk about the power of some of those new capabilities that were in the SaaS version and why they decided to make the move. We had them talk about how those new features helped them do their job better and then even proactively address some of the objections we knew we would get from customers who said, “Well I don’t want to leave this feature behind, I’m afraid I’m going to lose something.” Customers described how that feature wasn’t as important as they thought because now with these new features, they have an even better workflow, a better business process that’s now been enabled with the modern app.

That leads nicely into the strategic initiative of product launches. When we were launching this product, there were a couple of sales organizations that were using our old proposal automation solution. We tapped into them where they were already supporting sales and had them try out this new SaaS platform for no cost. And they loved it. These sales leaders  then became our early spokespeople for our product launch because we were now going into a whole new domain where we didn’t have the list of contacts there, we didn’t have a reputation there, but we did identify who were those influential people in that VP of sales role  who could now talk about the power and benefit of this new SaaS app, and how it’s going to make their sales reps more effective and more efficient.

We greatly reduced the time to market in terms of being both recognized as a viable solution provider as well as having the authority in that space. We can declare ourselves to be the authority, but it’s not until others recognize us as the authority that we’ve actually earned that status.

Another example of a strategic growth initiative where you need to apply Customer-Led Growth is driving competitive positioning. That Forrester example I told you about earlier, how we were trying to coexist with Gartner. We needed to overcome that biggest objection from buyers that they’re already spending $X million a year with Gartner.

I captured voices of clients answering questions like “What’s the incremental value that you get from Forrester above and beyond what you get from Gartner?” And that was the game changer. That totally crushed that objection once and for all. And again, that was a Customer-Led Growth initiative.

I didn’t tell you at the very beginning, but my work right now is I’m the Founder & CEO of SlapFive, which is a Customer Marketing & Advocacy software platform that powers Customer-Led Growth. My inspiration for creating SlapFive came from that experience at Forrester, building the Forrester Frontlines program. I proved that Customer-Led Growth was a game-changing way of doing sales and marketing, but it was very labor intensive. There was no software on the market to automate it, so I had to piece together Salesforce, Eloqua, Google Drive, Google Sheets, and several other apps. The lightbulb went off for my next startup.

Join us at CustomerXCon 2023 in Boston in October, where we will dive deeper into Customer-Led Growth. We have sessions designed for senior-level Customer Marketing and Customer Advocacy leaders, so you’ll rub elbows with about 250 other people who are also trying to figure out how they can drive Customer-Led Growth and better engage their customers to drive revenue.

Q&A

Question: How do you motivate customers to participate if there’s multiple programs that you want to engage in?

This is such an important question. I started SlapFive to create a Customer Marketing platform. I knew that this was the number one challenge that we needed to solve: how to motivate customers to participate in your programs and share their voice. The conventional wisdom at the time was to offer rewards and bribes in exchange for favors. Using rewards doesn’t build a trusted relationship, it builds a transactional relationship that is not sustainable.

What really motivates customers to participate is when it’s a two-way exchange of value. I’ve coined the concept of Earned Customer Advocacy versus Paid Customer Advocacy. Paid Customer Advocacy is when you bribe customers and extort them into doing favors for you. Earned Customer Advocacy is where you run a program that’s a two-way exchange of value where customers get just as much if not more out of participating in the program as you do. The number one motivator for customers is if you are going to give them opportunities to showcase their own thought leadership and build their reputation within their company and industry.

It’s all in how you position it as well. You should never go to a customer saying, “Could you please, please, please do a case study for us?” No. Instead you go to them with, “We’ve got this amazing opportunity for you to shine and showcase all this amazing work that you’ve done and, and it’s super simple for you to do it. We can only open this opportunity to one or two customers, and I wanted to come to you first.” You really have to make sure it’s a win-win.

For those of you who want more, I wrote an eBook called “From the Horse’s Mouth: How to Get Your Customers to Share their Voice”. It covers the top eight best practices for doing that. Number one is to stop begging your customers for testimonials, endorsements, and recommendations. Because those are no-nos. The customers’ PR or Legal teams don’t allow them to give testimonials, endorsements, or recommendations. Instead, you turn it on its head, and you present them with opportunities to showcase their knowledge, experience, and advice. Everybody loves to share their knowledge because it makes them feel smart. Everyone loves to share their experience because it makes them feel successful. And everyone loves to share their advice because it makes them feel heard. These are intrinsic motivating factors versus relying on bribery.

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