The Principles of Customer Value-Led Growth

Hi, Markus here. Welcome to a premium edition of the Customer-Value-Led-Growth Newsletter.

Every week, I share strategies, guides, and frameworks to help you create exceptional value for your customers and company.

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Today we continue with the 2nd part of the Customer Value-Led Growth principles.

If you have missed the 1st part you can read it here.

1. Measuring Outcomes

Principle 10: Relevance

Your customers don’t buy your product for its features and functions. For them, it’s merely the vehicle that helps them to get what they really want. Their goals are either to

• grow their revenue

• reduce their costs

• improve productivity

and in some cases two or all of them at the same time (e.g. sales or product development).

They don’t care about adoption and usage. If they are using a single feature to get a ton of value once a week they are perfectly fine.

Consequently, those are poor metrics to measure customer success. The same is true for Health Scores, NPS, and CSAT.

They will tell you when it’s obvious a customers is not getting value. Everything else is guesswork and countless customers leave despite perfect health, high feature adoption, and usage.

A relevant metric system features KPIs your customers care about. This is what they will use to make decisions and take action (renew or churn and buy more).

Principle 11: Accuracy

Customer outcomes are usually a lagging indicator. If your customers want to grow their revenue by 50% YoY you can only evaluate whether they’ve accomplished their goal in the retrospective.

If they have failed to get their you can no longer fix the situation unless your customers are willing to try again. That means you need leading indicators that give you insights about where things are heading.

You need to measure customer progress. No matter what goal your customers are pursuing they usually don’t make everything in the end even though the results might accelerate.

Achieving a 50% growth goal where you are only at 3% after 3 months is highly unrealistic. At this point, you have enough time to analyze the situation to understand why your customer has fallen behind and correct the course.

Principle 12: Context

We can’t help our customers to accomplish a goal like revenue growth directly. Instead, we are enabling them through education, training, and consulting.

With every input intended to help customers solve specific problems and complete specific tasks. These inputs are designed to improve the so-called input metrics that combine into the top-level outcome.

If you want to help your customers grow their revenue they need to improve in at least one of these parts

• booking more meetings

• better quantify pain

• run better demos

• write more convincing proposals

• …

That means when you are measuring and evaluating your customers’ progress you need to have the context behind it. The context of how your customers perform in each of these input metrics.

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