The Top 4 Customer Growth Strategies

Strategies to Increase Customer Lifetime Value & Customer Affinity


  • Customer growth strategies design, build and scale customer relationships that generate increased revenues as measured by purchases, customer share, customer lifetime value and retention.
  • Customer strategies define what the customer and the company want and design the methods to achieve both profitably. They apply prescriptive frameworks to achieve systemic execution and forecasted business outcomes.
  • They are most valuable in highly competitive industries where customers perceive multiple substitutable alternatives; and where repeat business is essential to company revenue objectives. Cultivating brand affinity is a top driver of organic growth.
Johnny Grow Revenue Growth Consulting

The Pursuit of Customer Affinity

Customer affinity is an oft cited but seldom achieved goal for most companies.

It's the connection a customer has with a brand and when nurtured it creates a long-term customer relationship.

It often starts with a rewarding product or service purchase and experience. But when expanded with more meaningful purpose or shared values the customer feels a personal or emotional connection that develops into a relationship with the brand or business.

The customer believes that the brand shares core values and beliefs that may have little or nothing to do with the product or service. That belief is the difference between customer loyalty (favoritism toward products) and customer affinity (preference for the brand).

Brand preference provides a protective barrier against competitors offering similar solutions and benefits. It turns one-time buyers into repeat buyers and repeat buyers into advocates. And that makes customer affinity the company's most valuable and durable asset.

In fact, achieving this elusive objective is one of only four sustainable competitive advantages and a differentiator that is not easily duplicated by competitors or displaced by new technologies. Growing mutually rewarding customer relationships based on an emotional connection creates a competitive advantage that can withstand disruptive technologies, competitor encroachment and the erosion of other competitive advantages.

Customer Strategies to Achieve Customer Affinity

The overarching goal of a customer strategy is to achieve customer affinity.

The customer strategy defines a systemic approach to achieve this brand preference and downstream revenue and profit objectives.

Most often that means a specific approach to satisfy customers and in turn increase customer acquisitions, grow customer share and improve retention. And do these things at scale and the least cost.

The objectives must be accomplished with repeatable processes that deliver predictable results and technology that automates those processes. Analytics are needed to deliver information reporting that flags deviations for quick intervention.

The customer strategy must define how the company will align and engage customers, the technology to automate and scale customer relationships, and the analytics to measure success or inject course corrections.

But it's no easy task to promote a brand that resonates with customers. Staff operate on the front line so they must understand and reinforce the strategy. That means they must be trained to execute the strategy, have the tools to deliver consistent customer communications and experiences across all channels and touchpoints, and be supported with real-time analytics to remedy periodic shortfalls. It's no small effort. Fortunately, there are several customer growth strategies that can help.

The Top 4 Customer Strategies

Customer strategy research performed for the Business Growth Report found that most companies do not have a recognized or formal customer strategy program. However, those who did outperformed those who did not.

The research also found the four most used customer growth strategies are Customer Relationship Management (CRM), Customer Experience Management (CXM), customer engagement and customer loyalty programs.

Top Customer Strategies

See the research findings that show the top 4 customer growth strategies.

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Each of these customer strategies have overlap but are unique and deliver unique benefits. Below is a review of each.


Customer Relationship Management

Customer Relationship Management (CRM) is a technology driven strategy. It defines how the company will use CRM software to engage and win new and existing customer business.

CRM strategy is different than CRM software. The former prioritizes and targets the most important business outcomes while the latter is the enabling technology to achieve the former. CRM strategy and CRM software are synergistic together but ineffectual apart.

CRM Strategy and Technology

A company's CRM strategy defines what's most important. That might be expanding a new market, increasing market share, growing a customer segment or reducing churn of the most profitable customers. Strategy defines the most important things because it's more important to do the right things than do things right.

That's because doing low value, mediocre or non-essential things right has little impact on the company's financial goals. So the strategy defines the right things, the most strategic things, the things that most impact customer relationships and drive revenue growth and profits.

If you have the right CRM strategy, you can actually make a lot of tactical errors and still make progress toward your revenue, profit or other strategic goals. It reminds me of a quote by Robert E. Wood, a Brigadier General and later business executive, who said, "Business is like war in one respect. If its grand strategy is correct, any number of tactical errors can be made and yet the effort still proves successful."

CRM strategy and technologies deliver benefits to the customer, user and company. Users get CRM software with an engaging user experience (UX) that improves user benefits (i.e., increased productivity and personal performance). Customers get improved sales and service engagement and solutions that solve their problems. The company gets improved customer relationships, increased sales and overall revenue growth.


Customer Experience Management

The Customer Experience (CX) is the customers perception of the brand based on the totality of their interactions.

Customer Experience Management (CXM) is the business strategy to achieve CXs that go beyond basic satisfaction and achieve more emotional goals. The experiences make customers feel delighted, appreciated, valued, engaged or rewarded – and make those experiences memorable.

It's harder that it sounds. Most companies manage the basics pretty well but are unable to step up to customer experiences that position them ahead of competitors. A revealing study from Bain & Company found that 80% of companies believe they deliver "superior experiences." However, the research also found that only 8% of customers agreed (Source: Bain & Company, Customer-Led Growth diagnostic questionnaire, n = 262).

CXM must start with a customer-centric culture. This requires outside-in thinking and making the customer a beneficiary of specifically designed solutions and services. You need to really understand the customers' top goals, not reposition the company goals as though they are benefits for customers. They're usually not.

Without putting the customer at the center of your business, any attempt to use a CX strategy is a fool's errand. Customers are smart. Management self-proclamations suggesting that they come first, without a real customer centric culture, is quickly recognized as lip service. Authenticity is also essential.

Companies don't get to decide how customer-centric they are, customers do, and they will make their opinions known in social media and elsewhere.

Delivering differentiated CXs at scale requires data and the technology to apply it at customer interactions. It's no easy task but making customers feel valued is proven to create affinity and grow customer relationships.

Customer experience is also proven to enable price premiums. Research quantified the price premiums earned from superior customer experiences for several industries.

Customer Experience Prime Premiums

Customer Engagement

Where CXM is performed by the company, Customer Engagement is facilitated by the company but agreed to by the customer.

Customer Engagement is about communication, interaction and collaboration exchanges between the customer and the company. It requires contribution and dialogue from both sides. The company must induce engagement, but it is the customer that chooses whether and when to engage.

A Customer Engagement strategy is directly focused on value creation and not revenue extraction. It orchestrates planned and proactive interactions to create a dialogue and personal connection that grows customer relationships. When successful, those relationships then achieve business benefits that include loyalty, referrals, purchases, lifetime value and retention.

Customer Engagement Continuum

A prescribed customer engagement plan shifts interactions from reactive to proactive. It ensures that the relationships with your customers don't end at the time of purchase. A regular level of communication, as opposed to just engaging when you want something, develops a dialogue and builds trust.

Communication is much more than marketing promotions and sales offers. It's the content that aligns customer interests with the company brand, your unique value proposition or your sustainable competitive advantages. Things that reinforce what makes the company unique.

In the early stages of a customer relationship, engagement is all about ensuring your solution is delivering the intended value. Later stages will apply creative communication to shift customer affinity from the product to the brand.

For example, the company may apply a persona-based nurture marketing campaign for prospects. It then delivers a welcome letter from the CEO during the onboarding. It follows with a newsletter over the course of the relationship, periodic requests for feedback to solicit ideas for product improvements, and customer satisfaction surveys following customer support calls.

The primary reason for the seismic rise in customer engagement strategies is that the investment is comparatively low, the payback is high and the ROI is compelling.

A customer engagement study by Gallup reported that companies with successful engagement strategies experienced 63 percent lower churn and 55 percent higher customer share. Those figures are extraordinary and create significant long-term revenue gains. Gallup research also found that fully engaged customers deliver 23 percent more revenue than average customers.

In another customer engagement study by Constellation Research, the analysts reported that "Companies who have improved engagement increased cross-sell by 22 percent, drove up-sell revenue from 13 to 51 percent, and increased order sizes from 5 to 85 percent."

It's simple logic really. Periodic engagement keeps the company top of mind, builds a better relationship and when done well, creates evangelists who buy more and advocate for the brand.


Customer Loyalty Programs

Customer loyalty programs are designed to promote repeat purchases. That's important because returning customers spend on average 67% more than first-time customers (source: Bain and company). Also, in several consumer-based industries up to 15% of the company's most loyal customers account for 55-70% of the total revenues (source: The Center for Retail Management at Northwestern University).

And while loyalty programs are most attributed to consumer businesses, research shows that these programs are also effective in business to business (B2B) industries. Don't lose sight that B2B businesses are made up entirely of people who want to feel recognized and rewarded by their brands.

Loyalty programs tend to be more programmatic but are effective in delivering several strategic benefits.

In fact, the best loyalty programs are designed to acquire more customer intelligence to then use for more relevant, personalized and contextual communications and engagement. They are also designed to increase customer lifetime value (CLV), shift customer purchases to higher margin products, increase customer retention and shift loyalty from products to the brand.

That last point is particularly important because customer loyalty is different than brand affinity.

Loyalty is most often driven by value and without an emotional connection. Customers may become loyal due to the best product or best price. Sometimes loyalty is the result of a habitual routine or the lack of substitutable alternatives. These factors create customers who are loyal but without feelings of affinity. The risk is that if the value changes, or a competitor offers a better value, the customer easily switches brands.

Where customer loyalty is based more on rational decisions, customer affinity is based more on an emotional connection. That makes affinity more durable.

Fortunately, customer loyalty can be transitioned into affinity. Delivering product or service value creates an opportunity to then communicate a purpose, mission or corporate values that are shared by the customer.

The Point is This

Most companies have clear goals such as revenue growth, market share or profit targets. Fewer companies apply a customer strategy to engineer the systemic achievement of those goals.

That engineering starts with customer empathy and knowing what customers want in order to increase patronage with brands. It follows with customer intelligence, buyer insights and focus on the pain points that permit the company to solve for the customer.

It then applies data to deliver differentiated customer experiences that build the customer relationship and drive the company's financial goals. It's all about alignment and systemic execution. Help your customers achieve their goals and they will help you achieve yours.

If you considering the implementation of a customer strategy, check out our post that shares the 6 steps of a customer expansion strategy plan.