Why customer connection is important

At INBOUND 2023, Yamini Rangan, CEO of HubSpot, showcased changes in the customer journey driven by the recent push in AI technology.

Where people spend their time, how they shop, how they share information, and how they expect to receive customer service are all changing. What doesn’t change, however, is the importance of connection.

The advent of AI makes this period extremely exciting. Companies that can effectively leverage technology to make deeper connections will ultimately experience the best growth.

AI will help level the playing field with features that give you incredibly powerful content creation tools. For example, HubSpot AI features like Content Assistant and ChatSpot.

Both leverage the same great language model as OpenAI’s ChatGPT, but conveniently packaged right into your HubSpot portal.

At HubSpot, we affectionately refer to our 20% of growing customers who prioritize the art of forging deep customer connections in their growth strategies as “connectors.”

These remarkable companies understand that meaningful engagement with customers is not just a buzzword, but a powerful catalyst for driving sustainable growth and building lasting relationships.

But how do we know that customer connection leads to growth? We decided to explore the data and find out.

I lead product analytics at HubSpot; our mission is to understand how using HubSpot helps our customers grow.

With over 184,000 customers spanning 120 countries and 149 different industries, we’ve gained a strong perspective on the importance of connection – and have the data to back it up.

I’m happy to share some of these best practices here.

Dig into the data

In most data science projects, 80% of the time is spent preparing data and this project was no different.

We started by defining a measure of growth: the volume of deals closed and won year over year. We have focused on consistent users of the Deals tool for over 2 years, giving us great confidence in our metrics.

From there, we isolated the impact of customer behavior by grouping customers (over 20 segments) by industry, size, HubSpot age, and feature access. Each segment was modeled individually to compare performance between peers.

Here’s what we learned.

1. Customer connection drives growth

After HubSpot spoke with connectors from various industries, we discovered what we call the “Connection Gap.” Turns out HubSpot’s main connectors are growing 29 percentage points more than medium-sized companies.

Said another way, connectors are growing 5 times higher than the average company who do not prioritize customer connection in their growth strategies.

Year-over-year growth results by prevalence of login behavior

Additionally, we’ve learned that customers in less digitally mature industries (e.g., manufacturing) experience a larger connection gap (40 percentage points) and will benefit even more focusing on customer connection.

2. Growth increases as you connect to multiple lifecycle stages

Connecting to more stages of the customer lifecycle increases total growth.

On average, companies that reached out to their customers through all five stages of the journey (aware, lead, lead, deal, customer) increased by 19% more than single-tier connectors. Contrary to what one might think, each additional stage of the life cycle at which a company connects adds more a gradual growth compared to the previous one.

Incremental growth based on the number of customer journey steps taken

This tells us that client connection policies are not important for a single service. It’s an effort that needs to be done across your business — an end-to-end customer connection strategy that shines through every touchpoint you have with your prospects and customers.

The numbers don’t lie; companies that connect with customers at every opportunity, from initial discovery to post-purchase delight, win.

3. Growth increases when you connect in multiple ways

More channels used at every stage of the journey leads to better connection and growth. Companies in the top 20% of connections are committed to meeting their customers where they are, and therefore use multiple features to interact with customers at each stage of the lifecycle.

Year-over-year growth results by number of features used at each stage of the customer journey

We’ve also learned that different features are more or less important growth drivers depending on the industry you’re in.

For manufacturing, these are outbound calls, tickets, and meeting links. But for software or IT, the main features were sales emails, ads, and meeting links. Meanwhile, professional services companies have found that sales emails, ads, and A/B testing are more effective.

4. Growth is maximized when businesses leverage both scale and human connection

Combining human-directed and large-scale (one-to-many) tactics at every stage of the customer journey is key to maximizing growth. (nb – HubSpot does not provide human-led tools for the awareness phase). When both tactics are used throughout the lifecycle, companies find 19% growth.

Median percent growth by stages with customer login activity

We found that human connection is more prevalent and more impactful later in the customer lifecycle, with customers omitting human connection during transaction and customer experience stages. negative growth (-1%).

Closing the Connection Gap

The theme is clear: the fastest growing companies make customer connection a priority. They think holistically throughout the customer journey, use multiple modalities to engage with customers through preferred channels, and leverage both large-scale and human-led tactics in tandem.

It may sound daunting, but with a potential 5x growth opportunity at stake, the most important thing is to get started.

HubSpot is committed to making it easy for you. We’re investing in AI to level the playing field, so even with a small team you can win in customer connection.

It’s time to rethink the way you market, sell and support your customers. The insights and strategies in HubSpot’s new “Guide to Connecting in the Age of AI” can help your professional services, software, or manufacturing business drive growth by building meaningful customer connections at scale.