News & Analysis

Startups Investing in Customer Experience Can Beat the Pandemic

SAP Labs

Before the Covid-19 pandemic tightened its grip across the world, things were looking up for the startup community. But things turned bitter when the virus attacked every aspect of business. For SMBs and startups that solely rely on VC support, things worsened, with many scrambling to save their businesses from collapse. A new study however shows that there is hope in the horizon for early stage companies that invest in customer experience (CX) can outperform their peers.

The Zendesk Startup CX Benchmark Report polled over 4400 early stage startups from around the world including India to understand what could be differentiator for startups to stay afloat in the current pandemic.

“The Report shockingly uncovers that more than 70% of startup founders and decision makers do not have a formal customer support strategy in place and are missing out on the opportunity to deliver those amazing customer experiences that are going to set them apart from their peers and really allow them to grow at the rate they want to grow,” Ted Smith, Senior Director, Market Intelligence, Zendesk told CXOToday.

The report found a strong link between better customer experiences and faster growth. We saw startups that started thinking about customer service earlier and embraced more tools and processes, saw faster growth rates. Our data records that one out of three fast growing startups added support within two years of the company being founded,” he said.

The report also noted how using omni-channel cuts wait times. The Report highlights that fast growing startups were 33% more likely to add omni-channel in their first two years and they were 20% more likely to add live channels, like chat during that same time period which helped them solve customer requests faster than asynchronous channels like email. As a result, they have recorded increased productivity which means lesser wait times for customers and a better experience for customers and agents. As Smith informed, “Fast-growing startups were more likely to use omnichannel and chat support to help cut wait times and drive the efficient teams they are looking to build.”

Another observation from the report is that Unicorns actually embrace self- service in a big way. Companies that have gone on to become unicorns prioritize self-service features from the beginning. Unicorns added self-service 61% faster than the other startups in the first year and the majority of unicorns – over 60 % of them, had a self-service feature in place by their second year.

“Startups should rethink their priorities when reevaluating customer service and engagement tools because we see that fast growing startups are more likely to use an omnichannel strategy and lean on self-service,” said Smith.

On when should early stage startups think about adding support, Smith believes, it is ideal to do so within the 9-10 months of the first round of funding. “Early adoption of tools that prioritize speed and convenience for your customers and other internal teams will be helpful in the long run,” he said.

Smith said, “To deliver enhanced experiences for customer’s faster growth, startups directed more resources towards self service and live channels like phone and chat. Startups should focus on launching self-service early.”

The report found a clear link between better CX and faster growth. And, while good service alone cannot guarantee success, continuous engagement with your customers can earn you loyal customers and can accelerate your growth. As Arjun Chopra, VC and Partner at Floodgate summed up, “Companies need to have systems that continuously engage their customers across multiple channels, anticipate their needs as they relate to their product, and service those customers effectively. Companies who do not holistically serve their customers should prepare for a lot of customer churn.”


Leave a Response

Sohini Bagchi
Sohini Bagchi is Editor at CXOToday, a published author and a storyteller. She can be reached at