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XaaS Product Management

What is Experience-Led Growth?

Why B2B Companies Need Experience-Led Growth

4 min read
By Laura Fay

Over the next few years, customer experience will surpass price and product as the most important differentiator in business-to-business (B2B) organizations.

According to a recent survey1, 90% of businesses agree that the overall customer experience is their primary focus, regardless of industry or sector.

It’s safe to say that prioritizing customers’ experience is essential to organizational success and growth. This is where experience-led growth comes into play. Today, digital customer experience (DCX) is the only scalable differentiator. This means experience-led growth must embrace digital at all levels.

Not sure where to begin with your experience-led growth strategy?

In this blog, get answers to the following questions:

What is Experience-Led Growth?

Experience-led growth (XLG) can be defined as a growth strategy focused on optimizing for effective and holistic customer experiences. Growth is realized by enabling the right experience, at the right time, via the preferred customer channel.

This implies a sharpened focus on the customer from first touch, through sale, onboarding, continuous value realization, and expansion.

This strategy enables repeated achievement of targeted customer outcomes.

To succeed at experience-led growth in B2B tech, the digital customer experience must become a core competency. This involves:

  • Transcending product and services.
  • Absorbing customer complexity.
  • Delivering a frictionless experience.

With XLG, the motions of customer acquisition, adoption, and growth are embedded in the digital engagement.

Why is Experience-Led Growth Important?

In B2C, great experiences are essential to scaling a business. There are few successful B2C businesses that don’t have a great digital customer experience.

B2C companies like Amazon, Apple, Disney, GoPro, Ikea, Patagonia, and Tesla grow based on the positive experiences their customers have.

These successful experience-led growth companies have a few things in common. They are completely aligned across the business (and their partner ecosystems) on a core set of customer experience values and operating principles.

These brands, and others like them, ignite emotions when consumers use their products and engage with their companies. These emotions can be as diverse as delight, appreciation, enjoyment, safety, interest, connectedness, inspiration, and more.

In the rare instance that a company continues to grow despite a poor customer experience, it’s because one of two things are true:

1. They have a monopoly (think: categories like utilities and cable service providers).

2. Their product has become so entangled in the daily lives of their customers, the pain of moving to another platform seems inconvenient or impossible (think: personal banking).

Experience-Led Growth in B2B

While some of the B2C brands mentioned above have harnessed experience-led growth, almost no B2B companies have. However, B2B is quickly realizing that the experience becomes the brand and that this experience is increasingly digital.

In fact, a recent study revealed that 70-80% of B2B customers prefer remote human interactions or digital self-service. These digital experiences are most effectively driven by data. This is good news when you consider that data-driven companies are 19X more likely to be profitable.

70-80% of B2B customers who prefer remote human interactions or digital self-service.
Percentage of B2B customers who prefer remote human interactions or digital self-service.

It’s no surprise that the B2B businesses with the most progressed experience-led growth strategies and related maturity also have B2C businesses. These include companies like Apple, AWS, and Adobe. In their B2C businesses, the core competencies and related learnings from the consumer business can be applied to the B2B side of their organization house.

There’s a lot of catching up to do.

What Do B2B Digital Experiences Look Like Now?

While product-led growth is becoming a majority practice in pre-sales along with measuring time to value, significant improvement opportunities exist for accelerating time to value for customers.

The Four Levels of DCX
The Four Levels of DCX

The data shows that the B2B technology industry is delivering a bumpy and uneven experience to their customers. This is evidenced by the fact that six out every ten cases lobbed over to the tech support team are related to friction when using the product or related to post-sale upgrades or changes2.

This has a negative ripple effect across the ecosystem, often resulting in customer dissatisfaction. However, through thoughtful digital customer experience design, bad experiences are truly preventable.

Further, data practices have significant room for improvement:

  • Just one third of companies are leveraging data insights to prescribe users’ next actions.
  • Even less are measuring the performance of top users’ workflow or capturing enough data to anticipate the customers' need for new products and services3.
Improving the B2B Digital Experience
Improving the B2B Digital Experience

A recent TSIA B2B industry poll4 probed the state of the B2B industry’s DCX maturity. The results showed much room for improvement.

  • Nearly 27% of organizations reported having no more than an uncoordinated departmental level DCX.
  • Additionally, 57% of respondents reported being at what TSIA calls “DCX level 2.” That is, assigning the task of reducing friction from the core product user experience to product management and the user experience (UX) designers.
  • A scant 16% claim digital customer experience as a core competency that absorbs significant customer complexity.
  • No company in the survey reported achieving a DCX distinctive competency (“DCX level 4”).
Percentage of Companies at Each DCX Level
Percentage of Companies at Each DCX Level

Challenges to Developing Experience-Led Growth

In a recent TSIA poll, 95% of all respondents agreed with the statement:

“A well-defined set of customer experience values helps with customer experience decision making”.

Despite this overwhelmingly aligned result, just 31% of all survey participants reported the presence of corporate customer experience values that they could easily articulate.

How Many Companies are Actually Executing?
How Many Companies are Actually Executing?

Further, survey participants reported significant barriers to adopting an experience-led growth strategy. These barriers include:

  • Functional silos preventing customer data sharing.
  • An unclear definition of what it means to be customer-centric.
  • Lack of investment, vision, and skills needed.

These circumstances are common among B2B tech firms. They are a function of the very different technology business roots that made these firms successful in earlier phases of their growth.

However, in the past, experience was not as necessary for growth as it is today. It’s a different game today from those days of technology business success, where experience wasn’t such a big factor to growth.

So, what do B2B businesses do now?

In the face of the above-mentioned challenges, B2B businesses need to urgently develop capabilities to help the organization accelerate experience-led growth.

What will it take to embrace experience-led growth?

Consciously pursuing an experience-led growth strategy takes more than a simple statement. It requires complete cross-departmental alignment and action to deliver the best superior experiences for all personas along the customer lifecycle.

Companies can start with creating a set of well-defined customer experience values and operating principles that every employee lives by on a day-to-day basis.

Further, the company as a whole must rally around a common set of values and operating principles to deliver on persona-driven experiences that are:

  • Personalized.
  • Persistent.
  • Prescriptive.
  • Timely.
  • Intelligent.
  • Immersive.

The industry is quite far from providing users a way to experience the kind of sentiments and emotions that successful experience-led growth B2C companies have achieved. In the B2B area, these solutions could be creativity, productivity, efficiency, risk prevention, and more.

A good customer experience is one that reduces customer effort.

Companies pursuing an experience-led growth strategy must:

  1. Understand the complete customer engagement lifecycle.
  2. Completely absorb the customer’s complexity.
  3. Develop a great digital customer experience.
  4. Have high signal liquidity and prescriptive analytics.
  5. Possess the ability to measure customer value and outcome realization.

An experience-led future is coming to our B2B businesses at increasing velocity, and companies must ride the wave.

Four Must-Haves of an Experience-Led Growth Strategy
Four Must-Haves of an Experience-Led Growth Strategy

Make no mistake, B2B businesses are mortgaging their future in the absence of an experience-led growth strategy. Ideally, companies should not just strive for core competence in the digital customer experience; they should strive for distinctive competence where they can differentiate based on the strength of the customer experience.

1 Oracle, “Global CX Insights Report,” 2019.
TSIA Support Services Benchmark 2022.
TSIA XaaS Product Management Effectiveness Benchmark 2022.
TSIA DCX Maturity Poll, Oct 2022.

 January 6, 2023

Laura Fay

About Author Laura Fay

Laura Fay is the vice president and managing director of offers research and advisory for TSIA. She also serves as TSIA’s vice president of XaaS product management research. Laura is a technology industry veteran with over 30 years' experience driving business growth in the enterprise technology industry via leadership roles in product management, general management, product development, and customer success.