CLG-driven companies achieve exponential revenue growth through retaining existing customers and expanding their accounts\u2014and this is only possible with a stellar customer experience at the core.<\/p>\n\n\n\n
To make this happen, a CLG-focused SaaS should first define what a great customer experience looks like, and then work to consistently deliver it throughout the entire customer journey.<\/p>\n\n\n\n
Is customer-led growth the new PLG?<\/h2>\n\n\n\n
Product-led growth (PLG) is a growth strategy where the product itself is the main driver of customer acquisition, retention, and expansion. Around 58% of SaaS companies<\/a> have a PLG motion in place.<\/em><\/p>\n\n\n\n Yes and no.<\/p>\n\n\n\n In terms of its potential for SaaS companies, its growing popularity, and some of the tactics involved, CLG can be compared to product-led growth (PLG). But it doesn\u2019t really make sense to directly compare the two\u2014they\u2019re applied at different stages of the funnel and can actually work together.<\/p>\n\n\n\n Put simply, PLG is mostly about driving new business, while CLG focuses more on expansion.<\/p>\n\n\n\n For example, at ChartMogul, we use a hybrid model. PLG is at the core of our strategy mainly helping us fill the top of the funnel, and CLG helps us grow existing accounts and improve retention. We don\u2019t shy away from the sales-led motion either. <\/p>\n\n\n\n We\u2019re certainly not the only company using a hybrid approach.<\/p>\n\n\n\n \u201cIf you look at any company that\u2019s at scale and is successful, there isn\u2019t any one go-to-market motion that they use. It\u2019s typically a combination of many. <\/em><\/p>\n\n\n\n PLG or a self-serve model is just one part of what they do. They also have a sales-led motion and a marketing-led motion. They also have a very strong expansion, or customer-led, motion. <\/em><\/p>\n\n\n\n The question is what sequence you do them in, and that sequence depends on your maturity and your market\u2019s maturity. <\/em><\/p>\n\n\n\n But at the end of the day, customer-led growth has to kick in. That\u2019s when you scale.\u201d<\/em><\/p>\n\n\n\n Rishen Kapoor, Co-founder & CEO Toplyne<\/p>\n<\/blockquote>\n\n\n\n Whether you\u2019re a product-led, sales-led, or marketing-led organization, you know that acquiring net new business is tough and expensive. And it\u2019s not just you.<\/p>\n\n\n\n Since 2021, year-over-year (YoY) growth for SaaS companies has steadily declined<\/a>\u2014largely because new business sales have slowed down significantly.<\/p>\n\n\n\n Meanwhile, retention and expansion have taken on a bigger role. Companies with $15M to $30M+ ARR have seen growth from existing customers rise from 43% to 50%. In fact, retention and expansion are now driving a larger share of ARR growth across businesses of all sizes.<\/p>\n\n\n\n Clearly, there\u2019s a need to shift focus from chasing new leads to building stronger relationships with existing customers. <\/p>\n\n\n\n But there\u2019s something else you can see in the data. As companies grow, retention becomes less of a growth driver, while expansion takes center stage. While keeping customers is important to stay afloat, it\u2019s expansion that drives real growth.<\/p>\n\n\n\n And if you want to drive expansion, whether through upselling, cross-selling, or increased usage, you have to drive value for your customers. In other words, you have to embrace CLG.<\/strong><\/p>\n\n\n\n It\u2019s only natural to think that CLG only makes sense once you have a substantial customer base to work with. That\u2019s why many startups focus on PLG, sales-led growth (SLG), or marketing-led growth (MLG) early on, planning to implement CLG later\u2014usually after hitting some ARR milestone.<\/p>\n\n\n\n But the truth is, there\u2019s no specific revenue or customer base size required to implement CLG. <\/strong>You don\u2019t need to wait until you\u2019ve \u201cmade it\u201d to start focusing on your customers.<\/p>\n\n\n\n As soon as you have your customer journey mapped out, you can begin driving your way toward customer-led growth. The key is understanding what your customers need and delivering value at every stage, regardless of how many customers you have or what growth model you\u2019ve been using so far.<\/p>\n\n\n\n What sets CLG apart from other growth strategies? The foundations.<\/p>\n\n\n\n A huge part of why customers churn in PLG-driven or other motion-driven companies is the misalignment around what an ICP (Ideal Customer Profile) is.<\/p>\n\n\n\n A successful CLG motion starts with a laser-focused ICP, as in a deep <\/em>understanding of what your customer is looking to achieve when they buy your product. <\/p>\n\n\n\n It\u2019s true that every SaaS company should have an ICP, no matter the growth model. But in CLG-driven companies, the ICP isn\u2019t just some document that sits untouched in a shared folder. It\u2019s the foundation of every team\u2019s<\/em> activities, from onboarding to performance reviews to upskilling efforts.<\/p>\n\n\n\n And it\u2019s always evolving. <\/p>\n\n\n\n So, even if you already have an ICP (and hopefully, you do)<\/em>, simply linking to it and calling it a day won\u2019t cut it. You\u2019ll need to establish a regular cadence to refresh your ICP and work together across teams, using real data and examples to create a clear and unified definition that everyone follows.<\/p>\n\n\n\n For CLG to work, all go-to-market (GTM) function members have to be fully aligned, but even more so the sales and customer success (CS) teams.<\/p>\n\n\n\n From agreeing on the ICP to sharing a common vision and language, both teams must maintain close collaboration in day-to-day operations.<\/p>\n\n\n\n For sales reps, this means thinking about the ICP early in the sales process\u2014not just focusing on hitting quotas, but on selling to customers who are likely to succeed long-term. When sales close deals with future expansion in mind, customer success is in a much better position to help those customers thrive and grow.<\/p>\n\n\n\n Of course, collecting customer data is a standard practice in PLG, SLG, and MLG-driven companies. But in CLG, the focus shifts from product adoption metrics like log-ins and feature usage to the actual customer experience with your company and product.<\/p>\n\n\n\n One of the core principles of CLG is bringing the voice of the customer (VOC) into all of the company\u2019s strategic decisions. To do this, you\u2019ll need a solid VOC program, built on these core elements:<\/p>\n\n\n\n Here we must highlight another critical interdependent relationship in your company\u2014between the CS and product team. The collaborative effort on the VOC input is essential across your entire organization, but arguably most important to these two. <\/p>\n\n\n\n A unified view of customer data is what sets CLG-led organizations apart. When everyone shares the same understanding of customer goals, success metrics, and terminology, alignment across teams becomes much easier.<\/p>\n\n\n\n While each team might use its own tools, there needs to be a system where all customer experience data flows, so it\u2019s easy for everyone to access and use.<\/p>\n\n\n\n 💡 ChartMogul<\/a> provides full visibility into your entire funnel by connecting CRM<\/a> data with revenue insights<\/a>. It helps your GTM team gauge how well they\u2019ve grasped the ICP by tracking the entire customer journey, from first contact to ongoing expansion. With this system, everyone can access subscription revenue insights and understand how their actions impact the company\u2019s bottom line.<\/p>\n\n\n\n Ready to put your customer insights front and center in guiding your company\u2019s growth? You can already take your first steps.<\/p>\n\n\n\n You\u2019ve already got loads of data at your fingertips. And after everything we\u2019ve discussed, you might feel the need to dive right into cleaning and organizing that data before launching your CLG practices. But if you do it, you\u2019ll get stuck.<\/p>\n\n\n\n Data cleaning is a never-ending task. And it shouldn\u2019t hold up your growth.<\/p>\n\n\n\n Instead, start small. Interview, say, 20 customers to understand why they chose you in the first place. This will be the foundation of your CLG motion.<\/p>\n\n\n\n “Even the biggest businesses are still cleaning up their data. Stop waiting for perfection \u2013 start small by talking to customers and uncovering what truly drives their success!”<\/em><\/p>\n\n\n\n Edward Chiu, Co-CEO of Catalyst and Totango<\/p>\n<\/blockquote>\n\n\n\n We\u2019ve already discussed that every team should align toward your ICP. But what does it mean beyond defining your target customer and their needs? <\/em><\/p>\n\n\n\n One way to foster that alignment is through regular meetings\u2014bi-weekly or monthly\u2014where stakeholders from all teams gather to discuss retention, expansion, and at-risk accounts. Each team should leave with clear action steps to tackle any challenges that arise.<\/p>\n\n\n\n And don\u2019t stop at meetings. Everyone\u2019s day-to-day initiatives should be focused on creating a compounding effect on your customer experience. <\/p>\n\n\n\n Take marketing, for instance. Often, marketing focuses too much on acquiring new customers, which can hurt post-sales engagement. This needs to change. Marketing should be deeply involved in the entire customer journey, gathering insights that shape strategies that support expansion. Activities to consider are community building, customer education, and advocacy programs.<\/p>\n\n\n\n For sales, the goal should shift from just hitting quotas to targeting new business with a focus on the value they bring to CS. Sales teams need to understand what the post-sale customer journey looks like to set clear expectations for customers they hand off to CS.<\/p>\n\n\n\n Customer success is at the heart of managing and delivering customer impact. They should be more involved in leadership discussions, champion VOC, and continuously shape the ICP. All of this while providing the best possible customer experience, which becomes easier with cross-functional alignment.<\/em><\/p>\n\n\n\n A critical piece of aligning your GTM function is creating shared key performance indicators (KPIs). While each team will have its own goals and metrics, there are a few success metrics that should be on everyone\u2019s radar, as they reflect the impact of your CLG motion. <\/p>\n\n\n\n Here are four to begin with:<\/p>\n\n\n\n\n
How CLG fuels SaaS growth<\/h2>\n\n\n\n
![\"Since](\"https:\/\/chartmogul.com\/blog\/wp-content\/uploads\/2024\/10\/New-biz-slowing-down-sharply-was-one-of-the-main-culprits-for-the-SaaS-deceleration-1024x558.png\")
<\/a><\/figure>\n\n\n\n![\"retention](\"https:\/\/chartmogul.com\/blog\/wp-content\/uploads\/2024\/10\/Expansion-now-contributes-up-to-40-of-growth-for-companies-with-15M-30M-ARR-1024x723.png\")
<\/a><\/figure>\n\n\n\nWhen is the right time to implement a CLG motion in a SaaS company?<\/h2>\n\n\n\n
Core components of a CLG motion<\/h2>\n\n\n\n
ICP (Ideal Customer Profile)<\/h3>\n\n\n\n
Sales and customer success alignment<\/h3>\n\n\n\n
Feedback loop <\/h3>\n\n\n\n
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![\"collaboration](\"https:\/\/chartmogul.com\/blog\/wp-content\/uploads\/2024\/10\/65cd262e2b3aa49814608e42_2022-ps-collab-loop-img-blog-1024x576.png\")
<\/figure>\n\n\n\nA singular data system for everyone<\/h3>\n\n\n\n
![\"ChartMogul](\"https:\/\/chartmogul.com\/blog\/wp-content\/uploads\/2024\/10\/hero.svg\")
<\/figure>\n\n\n\nHow to implement a CLG motion in your company<\/h2>\n\n\n\n
Start small <\/h3>\n\n\n\n
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Foster alignment across your GTM function<\/h3>\n\n\n\n
Define your CLG success metrics<\/h3>\n\n\n\n