Why startups prefer customer support outsourcing

While startups represent a smaller and distinct category of companies, they share some similarities with well-established enterprises. One of these is prioritising customer-centred services, which comes from a clear understanding of the connection between building buyer loyalty and providing valuable experiences through everyday assistance. However, due to their unique characteristics, startups may have different approaches and specific constraints that make them dynamically adapt their customer support strategy with greater resource efficiency than larger, more established organisations.

At the start, let’s roughly identify what truly sets startups apart. Typically, they are relatively new and developing companies associated with technology and innovation, focused on rapid growth and driven by a belief in immediate prosperity. Passion, excitement, and disruptive business ideas often characterise their leaders. With limited resources and low income, startups mainly depend on prominent external investors to provide the capital needed for expansion. Among the most successful startups that transformed into giant global corporations – so-called “unicorns”- are founded by well-known personalities like Steve Jobs, Elon Musk, and Mark Zuckerberg.

However, the distinguishing factor typical for these emerging businesses is a substantial risk of failure, especially in the initial period. As Startup Genome states, about 9 out of 10 startups collapse, resulting in a failure rate of approximately 90%. The fiascos of emerging companies can be linked to a range of factors, such as financial challenges, intense competition, inexperienced teams, inflexibility, misalignment with the market, and overlooking customer needs. The last element is particularly significant, contributing to the breakdown of 14% of young businesses, as per Fundera statistics.
Ultimately, it underscores the importance of prioritising customer-focused approaches for startups, irrespective of their growth stage or industry. Nevertheless, it often encounters distinctive challenges with a strong focus on cost-efficiency and agility, especially when building and developing consumer support services.

Customer support at startup companies: issues and challenges

Here are some common CX hurdles that startups must navigate in particular:

• Creating initiatives like customer support from the ground up usually demands substantial investments in technology and skill development, essential for a strong foundation for CX operations. Restricted financial and human resources and the deficiency of existing infrastructure compound this issue even more.
• Especially in the growing phase, some startups focus more on products and marketing than CX development, aiming to achieve success by attracting new customers. In such cases, retaining existing buyers and encouraging lasting connections can be inefficient.
• With a short presence in the market, startups often have limited access to customer data. This makes it challenging, and sometimes even impossible, to generate data-driven insights into buyer behaviours or preferences, hindering further personalisation of experiences.
• Another significant problem is talent acquisition and resource allocation, particularly in customer services. This can lead to risks such as a shortage of expertise in critical areas or misallocating efforts, which can profoundly impact satisfaction and loyalty.
• As a startup’s client base expands, it may face challenges related to the scalability of its services. The increasing number of customers and inquiries can create a greater demand for efficient and responsive assistance across various channels. Insufficient adaptation can impact customer satisfaction or turn buyers into more agile competitors.

The best customer support strategies for startups

While the CX effort can be challenging for startups, a growing number of organisations in this market segment are quick to embrace this initiative and achieve positive outcomes. However, the right customer support strategy should be tailored to the specific needs, goals and capabilities of the emerging companies at each stage.

Initially, most startups focus on building a strong foundation for their operations and securing financial stability, including infrastructure preparation, fund collection, talent acquisition, market research, product development, and more. During this exciting period, the responsibility for gaining and serving customers is usually shared among the entire startup team or comes under the direct control of the founders themselves. But at the same time, it is a perfect moment for laying the groundwork for implementing robust CX plans and making decisions on developing a customer-centric approach that will pay dividends as the firm grows.

Ultimately, when the opportune moment arrives, and the buyer database reaches a significant size, the company needs to respond proactively by adjusting processes, leveraging technology, and optimising team structures. By embedding customer support as an integral part of the startup’s culture and strategy from the outset, the development and scaling of its processes during the organisational expansion can be considerably more streamlined and efficient. It is about balancing increasing inquiries, meeting consumer expectations and maintaining operational efficiency. Managing these aspects is critical for loyalty, satisfaction and retention success.

Five critical strategies that can transform emerging businesses’ customer support

Customer service’s primary goal is to provide timely and effective support throughout the customer journey. It involves answering inquiries, providing assistance, and collecting feedback for further improvement. Below are five suggested game plans that can significantly contribute to building a comprehensive customer support initiative for modern-day and innovative startups while exceeding the requests, complaints, or concerns to create meaningful connections and shape positive customer experiences. They cannot be missing from the toolkit of any forward-thinking organisation aiming to thrive in today’s competitive business landscape:

1. Being Exceptional: Startups must excel in delivering customer services at every stage, from initial inquiries to post-purchase assistance and ongoing relationship management. This requires providing responsive, knowledgeable, and empathetic support to swiftly and effectively resolve issues while meeting buyer needs and expectations. Ultimately, the goal is to make all consumers feel fully supported, which is the cornerstone for building trust, ensuring satisfaction, and nurturing long-lasting relationships, therefore:
   • Startups should leverage a user-friendly Help Desk, hire proactive talents, equip them with the right tools and dedicate enough time to care for each customer while also expanding service options online, such as live chat, delivery tracking, and FAQ resources.
   • Assistance must be available 24/7 in preferred languages and time zones, offering compliance with specific regulations.
   • Support teams must possess skills and domain-specific expertise in industries with specialised products to address complex problems quickly when necessary.
   • Additionally, it’s essential to continuously gather customer feedback and data to monitor and improve services continually.
2. Providing Individualised Care to Every Customer: Startups can accomplish this by tailoring their support services based on comprehensive customer data. By understanding everyone in-depth, businesses can deliver what buyers genuinely expect. This can cover customised communication, preferred assistance, and highly personalised experiences. The approach ensures that customers receive the support they need through their preferred channels, at the right times, and in the preferred way, ultimately enhancing their overall experience with the company.
3. Profound Understanding of Buyer Desires: Such action forms the foundation for many crucial customer-centric initiatives, where data-driven knowledge is necessary to effectively fuel informed decision-making and tailor services to meet specific needs. It involves gathering customer data from diverse sources like support channels, past interactions, customer feedback, or web activity and its deep analysis to generate insights into buyer behaviours and preferences. However, ensuring robust data protection, legal compliance, and cybersecurity is vital to building trust and transparency.
4. Creating a Delightful Buyer’s Journey: Customer Journey Mapping efficiently guides startups in aligning their support strategies with the customer’s journey, addressing pain points and seizing opportunities for improvement. First, mapping allows for a deep understanding of how customers interact with the brand, identifying their needs and anticipating their emotions at every touchpoint. Consequently, customer journey mapping helps identify pain points, reveal areas for improvement, clarify challenges and identify opportunities to deliver tailored support services to match the customer’s expectations at each stage of their journey. For example, if customers frequently encounter difficulties during onboarding, startups can focus on improving this area. Lastly, it is critical to make mapping an ongoing process, regularly updated and aligned with the dynamic market landscape while maintaining data privacy and security with relevant measures.
5. Consistent voices across channels: Maintaining consistency across channels is critical for ensuring seamless and cohesive support. This is about providing the same message and assistance level, regardless of the communication method or touchpoint chosen by a customer for interaction. These may include, for instance, website forms, chats, mobile apps, social media messengers, phone calls, in-person contact, and more.

The role of modern technologies in startup customer support excellence

Technological solutions are pivotal in customer support processes, especially in the realm of startups usually seeking additional efficiency, cost-savings and innovative ways to differentiate in front of consumers. Employing relevant technology can help achieve these goals better as their role simplifies speed-to-consumer, supports scalability, ensures quality assurance and boosts productivity.

With a robust tech stack, startups can provide outstanding services faster, more agile and for less money, all while fitting the needs and expectations of customers. Among the enhancements available, several key elements matter the most, such as:

• A multi-channel CRM (Customer Relationship Management) solution, allowing for seamless integration of customer data from various sources, enabling a 360-degree view of the customer, and facilitating streamlined and customised interactions that reinforce brand integrity, which can also be utilised as a cloud-based Contact Center as a Service (CCaaS).
• Automation solutions for routine tasks, such as RPA (robotic process automation), which help streamline activities like data entry, order processing, and customer inquiries, enabling support teams to respond promptly and provide personalised care.
• Ticketing systems that allow for inbound issue categorisation by urgency and relevance, simplifying the customer support process.
• AI-driven chatbots offer 24/7 self-service support, efficiently handling basic inquiries without immediate human intervention.
  Advanced AI-driven tools, such as machine learning and natural language processing, which can enhance CX through more comprehensive analyses of customer behaviour, allowing startups to better address vulnerabilities, mitigate potential threats, prioritise high-impact activities, and provide even more context-specific and customised assistance in real time.

Measuring customer experience quality in startups

This practice allows startups to carefully track, precisely evaluate and elevate the quality of provided services. This involves closely monitoring metrics linked to customer satisfaction, loyalty, operations, and support team engagement, all while devising appropriate KPIs to guide the efforts and steer improvement.

In such a case, KPIs are indicators of customer support performance that serve as quantifiable benchmarks aligned with specific objectives. They help track progress toward achieving critical targets and show whether they are being met or if there is stagnation or regression in the quality of support provided.

The most common and critical metrics dedicated to the support assessments are, for instance:

1. Customer Preference and Behavioural Metrics: They help track customer loyalty, retention, churn and satisfaction levels using tools like Net Promoter Score (NPS), Customer Retention Rate (CRR), Repeat Purchase Rate (RPR), Customer Lifetime Value (CLV), Average Order Value (AOV), Average Time Spent (ATS), Churn Rate, Customer Satisfaction Score (CSAT), or Customer Effort Score (CES).
2. Efficiency Metrics: They allow for evaluation of the operational efficiency in given areas, channels and touchpoints, including Average Handle Time (AHT), First-Level Resolution (FLR), or Abandoned Call Rate (ACR).
3. Employee Experience Metrics: They are a valuable source of information on how support teams are engaged and motivated when providing services. These cover metrics such as Employee Engagement and Satisfaction Levels (ENPS) or Team Performance (XLA).

Why and when do startups need to outsource customer support?

Startups represent a category of businesses for which customer support outsourcing can be an exceptionally viable, most advantageous and practical path to fulfilling their business objectives. This approach becomes particularly attractive when these developing companies have limited in-house capacity to provide these services effectively.

Outsourcing enables startups to tap into skilled personnel, swiftly enhance specific processes, access expert guidance, expand their infrastructure, and often do so cost-effectively and competently without significant upfront investments, ongoing management, development, or technology expenses.
Here are some common reasons and situations when startups might consider outsourcing customer support:

How to choose the right BPO partner?

Startups need to make an informed decision and collaborate with an outsourcing provider that meets their current requirements and supports their long-term growth. Such a company must offer relevant team expertise, language proficiency, scalability of services, domain knowledge, geographic coverage, innovative technologies, partnerships, and budget-friendly options. It is important to establish clear communication, share essential business information, schedule collaborative meetings to review findings and brainstorm strategies, and implement performance monitoring mechanisms to make the most of the collaboration.

Summary

Exceptional customer support is pivotal in the success of startups, nurturing loyalty and crafting a winning brand image during the crucial initial stages of business expansion. Although building such services from scratch is very challenging, with few resources and budget, emerging businesses can benefit from outsourcing to impress customers while reducing expenditures, focusing on core business functions, getting expert assistance and leveraging cutting-edge infrastructure for sustainable growth.