As a CEO, you do not have to understand every customer acquisition to build growth, but you should have a good understanding of how growth works in practice. For fast-growing companies, the CEO has a strong commitment to the growth process.
9 insights a CEO must understand to build growth.
- Growth without a “product / market fit” is not sustainable.
Trying to force growth without the product fitting the market is a quick way to go bankrupt. Your product must be a “must have” for the market. Retention is the best data point to see if the product fits the market.
- Use a “North Star Metric” to align your growth team.
“North Star Metric quantifies value creation throughout the customer base. A correct “North Star Metric” also helps your company to align itself with value creation. The whole team must understand your “North Star Metric”.
- Invest in tracking, measurement and reporting.
There are a plethora of tracking and reporting systems that help deliver valuable insights. But the right system allows you to see the entire customer journey and understand where in the customer journey you are losing revenue.
- Quantitative data is gold, but do not forget the qualitative insights.
Make sure your team understands the value your product / service creates for your customers. Challenge the team by frequently asking when it was the last time they spoke to a customer. The qualitative data must be a complement to user tests and surveys.
- Use growth calculation to understand what drives growth rate.
Your growth rate is a function of new users + returning users + re-emerging users. For revenue growth, multiply by the average revenue per user.
- Discover growth opportunities through testing.
Every step in the customer journey can be improved and every improvement accelerates growth. But the only way to improve is through testing. It involves A / B testing, call-to-action or new functionality or onboarding steps. As CEO, you should promote an experimental culture that does not hinder growth experiments.
- Growth is cross-functional.
The customer journey crosses several different areas in your organization. An improvement in one area of the customer journey can have a major impact on another area. It is therefore important that the team works closely together to coordinate their testing and evaluation. Use your “North Star Metric” to align each other.
- Focus resources on onboarding for new customers.
New users must quickly see value in the product otherwise they disappear quickly. Optimizing onboarding is usually the most valuable investment that can be made to maintain sustainable growth. It strengthens retention, word-of-mouth and creates cost-effective customer acquisition.
- Break barriers that hinder growth.
Ask your team how you as CEO can improve the circumstances to find growth opportunities. Barriers can be user problems, competitors or lack of internal support for experiments..