In today’s rapidly evolving business landscape, there’s a pressing need to eliminate siloes and foster collaboration within businesses, especially ones experiencing fast growth.

The first blog in this series, Is it time to rethink Sales, Marketing and Customer Success, introduced the concept of merging sales, marketing and customer success into a single unified Growth Function that is truly customer-centric and focuses on long-term sustainable growth and profitability. And the second, Journey to Deep Growth: How to nail the Growth Function, uncovered how to get started in assessing which stage you’re at on The Deep Growth Maturity Model so you can begin to identify and prioritise initiatives and work streams that help you move towards becoming a fully unified team that drives deep rooted growth – growth that will help you navigate turbulent waters, reduce churn, increase advocacy and referrals.

But how do you define growth? And how do you measure its success?

Defining what growth looks like is not straightforward. Is it more customers? More profit? A bigger global footprint? A deeper client base? Whilst all of those are important, it’s crucial to recognise that having more customers year on year is not only an unrealistic target, but an obsession that leads you away from your core purpose and identity. The ultimate measurement of success that encourages deep, lasting and synthesised relationships with existing customers, is customer lifetime value (CLV).

“Loyal customers are essential for growth. One in three businesses without a loyalty program today will establish one by 2027 to shore up first-party data collection and retain high-priority customers.”

Gartner

The Ultimate Measure of Success: Customer Lifetime Value (CLV)

At its heart, Customer Lifetime Value (CLV) means your customers stay with you longer. The simplest way to achieve that: make them happy with the relationship through a unified customer experience. Reward loyalty. Drive customer satisfaction.

It challenges the concept of always needing more customers and instead focuses on DEEPER growth of your relationship with them. The sort of relationships that drive recurring and increasing revenue as a foundational goal, and bring in new business more cheaply, through customer advocacy and referrals. According to Ron Sela, gaining a new customer costs around five times as much as keeping an existing one, and there is a 60-70% chance of selling to an existing customer, versus 5-20% of selling to a new prospect.

How you measure your Customer Lifetime Value (CLV) depends on your business – your sales cycles, category conventions and routes to market – but a simple starting point is the following formula:

CLV = Average order value x frequency rate of purchase x average customer lifetime

You also need to be able to fully understand your customer. The tools are there – almost every business now has access to real-time end-to-end data – but if they’re not being used in a coherent, strategic way across every customer touchpoint – from sales to marketing to customer success – they’re just offering numbers without insight.

To start using Customer Lifetime Value (CLV) as a metric, you need to benchmark and work out:

• How much budget is needed to acquire a new customer
• Which audience segment is most profitable
• Which audience segment is a loss
• Which products / services have the biggest margins and profit
• Whether the cost of relationship is worth the lifetime value
• Long-term empirical data on marketing and sales effectiveness

Net Promoter Score (NPS) is a key indicator of growth and business performance

Net Promoter Score (NPS) is also a key metric of Deep Growth. It is used as a key indicator of business performance by two thirds of Fortune 1000 brands, it’s predictive of future customer behaviour and business growth.

However, not only is it important to make sure it’s part of a closed-loop feedback process allowing people to gather the insights and adjust the growth strategy accordingly, but it’s crucial that it isn’t self-serving. It’s important to lean into bad scores, even if it’s feedback you don’t want to hear. If you don’t listen, you can’t learn and you won’t adapt.

Roots and Shoots: A Single Team Driving Deep Growth

If customers are happy, they will put down roots, they will increase their spend through ‘Deep Growth’, and they will advocate, driving new opportunities, or green shoots.

Roots and shoots means long-term sustainable growth and profitability, instead of short-term sales targets. And it means creating a self-sustaining regenerative cycle of customer satisfaction and new referrals.

Continue reading 👉 Why you should prioritise alignment now

Download the full report now 👉 Download Roots and Shoots: how to deliver Deep Growth written in partnership with SBR Consulting

Accelerator Workshop: Kick-start your journey to Deep Growth 👉 contact us now
What is it? A 90-minute workshop + 30-minute discussion to assess the robustness of your current growth strategy and ability to shift to a ‘Deep Growth’ strategy.

Who is it for? Fast growth scale-up businesses who are experiencing revenue volatility or looking to build a foundation to accelerate growth opportunities.

The Value? The ability to drive strong, sustainable and valuable growth by unifying your organisation, eliminate siloes and becoming truly customer centric.