Experience-Led Growth - Chattermill

What is experience-led growth (XLG)?

XLG helps you to connect with what your customers care about, value, and desire.

So that you can find surprising insights and turn them into clear points of differentiation.

The Problem

Companies that rely on bought growth are not going to survive in the long-term

Cheap money has come to an end, paid acquisition is prohibitively expensive, and people won’t buy without proof from word of mouth. This leaves companies with far less opportunity. You can survive but you need to grow without adding risk.

Paid acquisition is losing its power

Acquisition costs on platforms like Meta and Google have grown. Customers need to spend more over their lifetime to make businesses viable in the long-term.

Cheap money has come to an end

Interest rates have soared over the past few years, so companies must show higher return on growth initiatives. Even when they do, funding is harder to win.

Customers are more sophisticated

Consumers are less reliant on advertising for making decisions. The 2024 Edelman Trust Barometer states that people trust scientists and peers over anyone else.

The evolution of business growth strategies

1920s - 1960s

Brand Leads the Way

The rise of broadcast media, such as TV and Radio brought advertising into people's homes. Visibility and an aspirational image meant commercial success. Brands competed with one another based on media spend. The one who shouted the loudest - would win.

1960s - 1990s

Customer Service Evolves

Businesses began to focus on the end-to-end customer journey. Customer service became the standard as businesses focused on improving their products and service levels in order to keep up.

1990s - 2010s

Hypergrowth Becomes the Norm

Businesses like Airbnb, Paypal, and Uber realised that they could grow quickly by using investment money. This emphasis on growth at all costs was accelerated by low interest rates after the 2008 financial crisis. Businesses didn’t care how much it cost to acquire new customers.

2020

The Pandemic Changes Everything

Direct to Consumer (DTC) Companies believed that this was the new normal and started to forecast huge growth, and proliferated. As the impact from the pandemic passed, these companies had disappointing results and had to become experience-led to survive.

2020s - Now

The Era of XLG Takes Off

With interest rates up, businesses are looking for a pathway towards sustainable growth. Everyone accepts that knowing your customer is key, and the wealth of data businesses have is crucial to selecting initiatives. The customer is a co-pilot, helping leadership adjust CX to reduce churn and win new fans.

The Solution

Why XLG now?

Experience-led growth is not new — it is built on the idea that the best path to profitability is to figure out what matters most to your customers.

XLG enables you to treat your unique customer experience as your key competitor advantage. This means proactively investing in and consciously building a distinctive customer experience across the whole customer journey.

The Challenges

  1. CX data is challenging to assemble in one place and hard to work with using traditional tools
  2. Without analysis, companies can’t estimate the impact of CX initiatives
  3. As a result, they struggle to build conviction about the dollar impact of CX spending

Examples of experience-led companies

We have worked with companies when they were just starting out to turn them into market leaders.

HelloFresh

HelloFresh is the leading recipe box delivery service that uses data to increase purchases. They are a powerful example of an XLG model: Over 10+ use cases working together to drive results. They use feedback to shape inventory demand and products. They saw a 30% increase in average order value and a 4% increase in average number of orders per customer.

Wise

Wise provides international digital banking and uses XLG to boost new customer acquisition from NPS analytics. They grew profitably because they:

Uber

Uber spent virtually nothing on marketing, instead using a deep customer focus to build local networks. This fueled word of mouth by targeting early adopters. The results? Lower operational costs with an innovative driver model and improved consumer engagement via word of mouth. In 2023 revenue was up 11% from a year earlier, helping to generate $221 million in net income.

THE BUSINESS BENEFITS OF XLG

Turn actual customer insights into cross-sell, retention, and improved conversion

When you think about CX as a flywheel, you adjust your growth strategy to address the areas that have the biggest impact - removing the blockers that prevent progress, such as silos, unreliable analysis, or misaligned metrics. Then you can truly serve your customers.

Awareness

Word of mouth

XLG companies use exceptional customer experience to benefit from word of mouth, built-in viral loops, recommendations, and paid referrals.

Acquisition

Improved Conversion

XLG companies invest in a smooth purchase process which results in higher conversion rates and more profit for every dollar spent on customer acquisition.

Loyalty & Retention

Stronger Retention

XLG makes retention easier through great first experiences, which means they come back again and join loyalty programs.

Expansion

Cross-sell and upsell

The same cohort of customers can drive the largest share of profits, so upgrading them to premium offerings can increase margins.

Service

Lower operational costs

XLG businesses often have lower operational costs because they have fewer returns, cancellations, or support contacts.

XLG doesn’t just happen

Many businesses agree with XLG even if they haven’t encountered the term before. But, oddly, few businesses have pursued this strategy coherently over a period of time. The reason for low adoption: management likes proven results.

To be successful at XLG you need to:

Experience-Led Growth Maturity Assessment

Move from beginner to expert with a proven maturity model

Discover your starting point with a practical model that has worked for global and new businesses. Highlight opportunities, track progress, and improve your customer experience.

Gut feel

There are limited or no XLG capabilities in place. Some customer experience data is used, but decisions are based on gut feel and insight-driven decisions are not possible.

Developing

Some recognition of the need for customer experience data to support decision-making, although customer insight and understanding are incomplete or ad-hoc.

Influencing

A consistent view of what customers think and feel, and a number of teams are consistently acting on this data. The supporting processes are repeatable.

Leading

The focus on XLG delivers a consistently exceptional experience. Unified data across the customer journey gives a complete view of the customer and business metrics.

Get granular insights from your feedback data

When you think about how to transition to experience-led growth, it’s essential to understand your needs and see how they fit into the broader strategy.