Pandemic concerns haven't kept founders from building products, launching their companies, or raising capital. New business creation has been surging since mid-2020 and early-stage VC investing in 2021 reached a record high of $201 billion, which means more opportunity and more competition among early-stage startups.
In this hyper-competitive market, startups need more than a good product and a pitch. You need to provide an experience that makes customers choose you and stick with you-- even when they have other options. Customer experience is as important of a competitive differentiator as your product, and investing early and consistently in this part of your business can be a significant, sustained growth driver.
With so many competing products in the market, customers can afford to be picky. That means startups need to improve their offering in other ways, one of which is customer service.
I know from my workplace's trends research that 50 percent of consumers would switch to a competing product or service after just one bad customer service experience. Plus, the majority are willing to spend more to buy from a company that gives them a better customer experience.
This is actually good news for startups because it means they have an opportunity to break away from the pack if they commit to three key pillars of great customer experience--responsiveness, empowerment, and transparency-- early on.
The data supports this, too. When my workplace looked at startups in the Zendesk benchmark report, we found that fast-growing startups deploy customer service tools earlier, solve customer issues faster, and are more likely to embrace industry best practices, such as enabling customer self-service. These strategies drive greater customer satisfaction, which has a positive correlation with users promoting your brand to their friends, family, and colleagues. On the flip side, when you fail on these fronts and leave customers dissatisfied, the same word-of-mouth effect will work against you.
A consistent theme among the startups my company works with is customer growth. Startups need to work hard to keep their early customers happy in order to retain users, cross- and up-sell them on new products, and drive overall lifetime value (LTV). Additionally, if you're able to meet customers' needs and build trust, word-of-mouth marketing may just help you land new users while dropping your customer acquisition costs (CAC).
To earn trust, startups need to have fast, reliable customer service, along with easy-to-use tools that can help them deliver the types of experiences consumers and businesses alike have come to expect. Here's some advice on how you can build your customer service operations from the ground up:
Use your agility to your advantage.
Optimizing toward customer convenience can give you a competitive edge, and as a startup, you should be able to do this faster than competitors. Be an early adopter of new customer service channels, such as WhatsApp and Instagram, while your competition is still stuck on email. And act fast on customer feedback you get through these channels; it will make your product and business processes better.
Make your customer service always-on (even when you're not.)
Always-on customer service means that your customers can get help 24/7, and I've found it's one of the most important criteria of good customer service cited by customers. While this may sound daunting, the good news is that when you empower customers to help themselves, you can take some of the pressure off your team without sacrificing customer convenience. Thanks to self-service tools such as help centers, deployed in conjunction with chatbots, you can be always-on for your customers, even when your team is getting some much-deserved rest.
Assemble your tech stack with customer experience in mind.
Every startup needs to consider its tech stack. App integrations are important not only for internal collaboration but also for your customer experience. When you can integrate systems, such as your user database or sales software, you can provide better, more personalized service.
With important details at the ready, you can eliminate little annoyances, like customers having to repeat their contact information over and over again. You can also get to the heart of a customer's issue faster. Cutting out extra steps in the process adds up to saved time and effort, for your customers and your team.
Plan for periods of growth (and the scaling pains that will come.)
While getting basic customer support in place can feel like a big accomplishment and even serve your initial user base well, a successful product launch or big investment in marketing can quickly swamp your team and processes.
Building automations and internal service workflows, along with the "always-on" recommendations above, can help you survive and thrive during growth spikes. My workplace found that top-performing startups use 2.8x as many workflow tools (automations, app integrations, etc.) as their counterparts, which allow them to solve vastly more customer issues in an equal or lesser amount of time. These tools have also helped companies across the board keep COVID-related ticket spikes in check.
Start small, scale-up.
With limited resources, early-stage startups may not be able to implement a complete customer service strategy right away, but this should not keep you from doing something. Start small, scale as you grow, and focus on doing everything you can to nurture the customer relationship.