Focus on Existing Customers to Unlock Growth

In the face of competition, many established companies tend to prioritize acquiring new customers to fuel their growth. However, a more effective strategy lies in focusing on existing customers, as it not only optimizes the current business but also lays the groundwork for future expansion.

Experience-led growth, a strategy centered around providing exceptional customer satisfaction, also leads to improved employee satisfaction and performance. This is due to several reasons: by prioritizing customers and their experiences, companies are able to enhance their happiness, resulting in increased collaboration among employees across different departments. As a result, both customer satisfaction and employee performance improve, leading to better financial results and unlocking growth. In fact, companies need to acquire three new customers to compensate for the loss of one existing customer, and successful growth companies generate 80 percent of their value creation from their core business, which involves generating new revenue from existing customers.

Creating a seamless and harmonized customer journey for existing customers is often more cost-effective than acquiring new customers. Satisfied customers tend to have fewer inquiries, thus reducing maintenance costs. Additionally, the probability of retaining satisfied customers is 20 to 30 percent higher compared to less satisfied customers. Our research demonstrates that leaders who prioritize customer experience not only achieve higher shareholder returns but also experience up to two times higher revenue growth compared to those who neglect customer satisfaction.

This emphasis on existing customers is particularly crucial now, as incumbent companies are facing a saturation phase with slowing growth. By doubling down on customer orientation, they can uncover new areas for expansion. Furthermore, with the rapid emergence of start-ups and increasing competition, incumbents must reconsider their business models. Prioritizing existing customers is one avenue to tap into untapped potential.

A successful tactic for experience-led growth is the establishment of a "win room," where all key departments within an organization come together to drive customer acquisition, retention, and operational excellence. We have implemented this approach successfully in various industries, including energy, insurance, and telecom. By fostering complete transparency and a shared understanding of the metrics that drive growth, retention, and cross-selling, companies can achieve remarkable results.

For example, at one energy company in Europe, numerous employees responsible for different aspects of the customer acquisition journey were scattered across multiple floors. We brought them together on one floor, displaying sales targets for the day, week, month, and year. This created a sense of unity and allowed the analytics, marketing, and digital teams to exceed their sales targets. As a result, the company experienced an additional 20 to 30 percent growth beyond their initial ambitions, along with improved financial performance, customer satisfaction, and employee satisfaction over a two-year period. This case exemplifies the potential of pragmatic approaches across all sectors and industries.

Another crucial element for successful experience-led growth is ambitious leadership within the company. It starts with an engaged CEO who can rally everyone to collaborate. Sales teams are not the sole contributors to success; operations and other departments play significant roles as well. Depending on the company structure, alignment among top management regarding a customer-centric approach is vital.

Furthermore, effective customer-centric growth requires robust measurement practices. It is not enough to measure customer satisfaction or the net promoter score; companies must prioritize customer journeys. By leveraging analytics, companies can anticipate customer satisfaction, identify which segments will delight specific customers, and encourage them to remain loyal or make additional purchases.

Most importantly, leaders must foster a culture of transformational journeys within their organizations. They should invite employees to participate, help them overcome any mindset barriers, and encourage them to acquire new skills. Simply stating the importance of being customer-oriented is insufficient. Instead, leaders should identify skill gaps and support employees in their career development through experience-led growth. By uniting people around their most valuable asset, the customer, a positive company culture can be cultivated.

For additional insight from our leaders, contact Our Team.