When you shop online, would you rather purchase from a store with a labyrinthine checkout process and irrelevant upsell attempts? Or one with a seamless user journey and lots of relevant product suggestions? Obviously, you’d prefer the latter—and so do your customers. Not only are your business’s prices and product selection important factors for your client base, but so is the experience they have while shopping with you.
Businesses lean into exceptional customer experiences by embracing a tactic called experience-led growth. It’s a popular strategy because it leverages existing customers who are already purchasing from you. Implementing it takes a concerted effort, but one that can offer very promising financial returns.
What is experience-led growth?
Experience-led growth (ELG) is a business strategy that prioritizes an exceptional customer experience at every touchpoint in the customer journey. Companies embark on an ELG approach by focusing on personalized experiences, seamless onboarding, and meaningful value for their customers to drive customer engagement, retention, and revenue growth.
Successful implementation of an ELG campaign can increase customer loyalty and transform satisfied users into brand advocates. This doesn’t just increase customer satisfaction; it also portends significant financial benefits for companies that commit to an experience-led growth strategy.
Benefits of experience-led growth for ecommerce businesses
Positive customer experiences can forge a personal relationship between a business and a brand. Shoppers get to enjoy a company with a deep understanding of their needs and pain points, while the business can leverage its existing customers as an organic growth engine, helping it reach its desired financial outcome. Here are three specific benefits for businesses that invest in effective ELG strategies:
Increased customer retention and loyalty
Experience-led growth focuses on creating exceptional interactions, which directly impacts customer retention. Research from Deloitte shows that people who receive a positive customer experience are likely to spend 140% more on purchases than those who experience a negative interaction. The fitness apparel business Gymshark exemplifies this by delivering personalized shopping experiences and engaging customers through loyalty programs. The result? A devoted community of fitness enthusiasts who keep coming back to Gymshark for repeat purchases. This remarkable business growth has allowed the company to scale internationally.
Boosted conversion rates
Personalization, a core element of experience-led growth, has been shown to drive significant conversion gains. Epsilon’s research shows that 80% of consumers are more likely to buy from brands offering personalized experiences. Footwear brand Allbirds uses dynamic product recommendations and tailored email campaigns to cater to individual preferences, which has helped them achieve higher conversion rates and maintain rapid growth in the competitive footwear market.
Enhanced brand advocacy and organic growth
Providing a memorable shopping experience encourages word-of-mouth marketing and organic brand advocacy from your customers. This can turbocharge your customer acquisition process. Jewelry brand Mejuri, for example, excels by blending seamless online shopping with interactive social media campaigns and user-generated content (UGC), creating a community of brand ambassadors who amplify their message, helping the company reach new customers via digital channels. This strategy has contributed to Mejuri’s expansion, as 89% of customers trust recommendations from friends or family over paid ads.
Challenges of using an experience-led growth strategy in ecommerce
It would be nice if your team could implement an experience-led growth strategy, snap their fingers, and be instantly set up for long-term success. In reality, today’s customers expectexceptional experiences, and there are a lot of other brands competing for their dollars. So while an ELG approach really can drive growth and lead to sustained profitability, getting started can be difficult. Here are some drawbacks to be aware of as you implement your ELG strategy:
High implementation costs
Making personalized content and delivering seamless customer journeys typically requires investment in advanced technologies like AI, data analytics, and customer experience (UX) design. For smaller ecommerce businesses, these costs can be a barrier.
So how do you deliver a consistent customer experience without breaking the bank? Start small by implementing cost-effective tools, such as Shopify apps for product recommendations or chatbots, and gradually scale as revenue grows. Focus on key customer touch points, like checkout and product pages, to maximize return on investment (ROI) on your experience-driven enhancements. If your budget increases, you can allocate resources to other touchpoints on the customer journey.
Data privacy and compliance issues
Experience-led growth relies heavily on customer data to deliver personalized experiences. However, navigating privacy regulations, like Europe’s General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA), can be complex and might erode customer trust if handled poorly.
How can you implement experience-led growth strategies without running afoul of privacy laws or customer trust? Use transparent communication to build trust, such as clear cookie policies and opt-in forms. Established ecommerce platforms like Shopify offer built-in compliance features, and they can let you anonymize data, which can still be used to provide shoppers with relevant experiences while respecting privacy.
Difficulty measuring return on investment
As a business leader, you need to track progress and monitor your ROI on all major initiatives, making sure you’re getting the very most out of every dollar. It can be challenging to directly attribute sales or customer retention to an enhanced user experience—especially when multiple factors influence buying decisions.
How can your decision-making teams assess whether there’s a strong correlation between ELG efforts and company revenue? Track key metrics like customer lifetime value (CLV), Net Promoter Score (NPS), and repeat purchase rates. Each of these metrics may help you gauge the impact of experience-led initiatives. As a Shopify merchant, you can integrate analytics tools to monitor user behavior and purchase histories. You can then leverage this unified data to correlate positive experiences with revenue growth.
Tips for implementing an experience-led growth strategy
Is it time to make experience-led growth important to your ecommerce business’s long-term success? Try implementing these strategies to extract more value from your existing customer base as you build toward long-term sustainable growth:
Leverage data
A successful experience-led growth strategy begins with a deeper understanding of your customers. Draw on data from your customer satisfaction ratings and task team members with analyzing customer feedback from your sales channels and customer service portals. This can help you identify areas for improvement as you align your offerings with user needs. The process may reveal specific pain points in the purchasing process, such as:
- Unclear return policies
- Little or no customer reviews on products
- Missing information on product descriptions
- Lack of live customer service
Use this data to give sales and experience teams concrete steps to address issues and create a positive experience for future shoppers.
Create a consistent experience
Looking to build trust and foster an emotional connection with your audience? Commit to consistency in branding, messaging, and user experience. Use marketing automation tools to ensure timely and relevant communication at every stage of the customer journey. For instance, offering personalized post-purchase follow-ups and relevant product recommendations can increase cross-sell rates while providing more value to your customers.
Engage product teams and CX leaders
Collaboration among your product, customer experience (CX), and marketing teams is essential for implementing experience-led growth. This requires establishing an organizational structure dedicated to customer-centric goals.
Achieving this may involve redistributing some budget; for example, allocating money for a customer feedback hub that is accessible to all teams, allowing them to use the data to guide their efforts. On a smaller scale, if budget is a constraint, engaging internal teams can look like fostering brainstorms on strategies to improve the customer journey.
Use customer feedback and predictive analytics
Regularly collecting and analyzing customer feedback will help your team predict trends and refine its strategies to meet evolving demands. Leverage predictive analytics tools to anticipate customer behavior, which will help you stay ahead of the curve during boom times and downturns alike. No one wants to be caught in a perpetually reactive stance. Anticipating trends and taking action can lead to better ELG and ultimately boost companies’ share in the market.
Experience-led growth FAQ
What is an example of experience-led growth?
An example of experience-led growth is an ecommerce brand using personalized recommendations and seamless user experiences to increase customer loyalty and boost sales. For instance, an ecommerce cookware seller might leverage predictive analytics to suggest complementary products during checkout, such as measuring cups when a shopper has a Dutch oven in their shopping cart.
What is the experience-led approach?
The experience-led approach focuses on prioritizing exceptional, personalized customer experiences to drive growth, build loyalty, and create long-term business success.
Why do CX leaders use an experience-led growth strategy?
Customer experience leaders use an experience-led growth strategy to enhance customer satisfaction, foster loyalty, and drive sustainable business growth. They do this by providing consistently exceptional experiences for new and returning customers alike.
