Startup Life/Opinion/

How startups can set the bar for outstanding customer service

These five measures help you craft a great service experience and stand out from the competition.

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Martin Schilling and Thomas Klugkist

By Martin Schilling and Thomas Klugkist

In the early 2000s, PayPal had entered hypergrowth, and the team was overwhelmed by customer inquiries. What did they do? They stopped answering the phone. 

In today’s world, customers would flock to social media to air their complaints. There is truly no hiding from the customer any more, which makes excelling at the service experience more important than ever. This is especially true when your competitors have launched comparable products or you are operating in a market where switching costs for customers are low. 

Here are five measures that startups need to put in place in order to shine through service, with some examples of European startups doing it best. 

Make customer experience a top priority for your executive team

This will ensure that it’s a priority for the entire organisation. A great example: the UK’s B2B voice and data network provider Colt Technology, which put achieving an industry-leading Net Promoter Score (NPS) as one of its top company goals. The NPS measures how likely customers are to recommend a service to friends and colleagues.

This obsession with customer experience is understandable, as companies with a high NPS grow more than twice as much on average than competitors with an industry-standard NPS, according to Bain & Company. Startups with stellar service often have customer experience targets as one of their annual OKRs, on par with growth, profit and revenue goals.

Prevent unnecessary contacts in the first place

How often have you called Zalando, Amazon or WeTransfer? Great customer experience is driven by a product that works intuitively, removing the need for customers to contact the company. That means eliminating issues before they occur. Many startups put this in place by embedding customer experience early on during product development.

Fintech N26 saw that customers wanted to do chargebacks themselves

Some startups, for example, reserve 20% of their product development sprint time to invest in product maintenance and bug hunting. Another common feature among some startups is a “bug duty quarter”, where one tech team is responsible for fixing product issues detected by customers on a rolling basis. 

Deflect transactional contacts to automated self-help

Customers love self-service for transactional tasks. The Swiss communications startup Doodle, for example, invested heavily in self-service in 2018 by integrating a machine learning-based bot to edit tickets automatically. This dramatically reduced the response time from 17 hours to 6.5, while boosting the company’s CSAT (customer satisfaction score) from 90 to 95.

Another example: the fintech Revolut deployed the chatbot Rita to solve transactional tasks such as downloading bank statements or reordering debit cards, thereby cutting a substantial share of unnecessary contacts. When the fintech N26 observed that many customers asked to have their money transferred back to them, for instance due to an unauthorised transaction, they developed an in-app feature enabling customers to request chargebacks with one click. These types of self-service features boost customer experience while cutting costs. 

Work with multiple contact centres to be available to customers even at peak times

Customers expect to be able to reach a service colleague when the need arises. The gold standard is to keep average waiting times below one minute or to answer 80% of contacts within one minute. Many startups combine in-house and external contact centres under a “hybrid operating model”, with the in-house centre being the quality benchmark and taking on more complex cases, and the external partners providing cost efficiency and flexibility for peak times. N26, for example, nearshored this service to Athens, while Revolut built a 400-person customer operations centre in Portugal. It can be beneficial to have a mix of global contact centres (such as Concentrix, Sykes, Majorel or Webhelp) in low-cost European countries and some providers specialised in your industry.

Enable teams to create moments of service delight

While it is important to strictly control processes, a company needs to allow its service colleagues to occasionally break the rules in order to create moments of service delight. The scaleup Dollar Shave Club has a budget for customer service agents to go off-script and wow the customer: when a new customer joked to the service team about the Dollar Shave Club being like a family, the team sent them a Godfather DVD set.

In a similar vein, when seven-year-old Luka Apps lost his Ninjago toys in a supermarket and wrote a letter to the Lego Group in Denmark, the company responded by sending him Ninjago minifigures and a story from the Ninjajo universe. Allocating extra budgets and the time to allow customer service reps to go off-script for these experiences is essential. Doing this at scale is prohibitive in terms of cost, but occasional experiences that go viral on social media will boost a startup’s reputation for excellent customer experience.

This article is an abridged version of a chapter from the book “The Builder’s Guide to the Tech Galaxy — 99 Practices to Scale Startups into Unicorn Companies”.

Martin Schilling is an author, investor, entrepreneur and former COO of fintech N26.

Thomas Klugkist is an author, media and communications manager and a consultant for scale-ups.

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