Trends & Insights

Seven Reasons Why Startups Should Outsource Customer Service

By Eduard Falkenreck - September 25, 2019

Refining products, integrating new employees, calculating finances and optimizing processes: Startups and growth companies have to juggle a lot of things and deal with thousands of details simultaneously. Especially in this phase, it is vital to set the right course for the future. The success of a business idea ultimately depends on one variable: the customer.

Customers are particularly crucial for startups. They are often the best multipliers for establishing a new product or service on the market. What’s more important, they are the first to subject the product idea to a reality check. The customers’ user experience quickly becomes an indicator of whether the long evenings in the office, numerous meetings and endless brainstorming sessions were really worth it.

At the same time, customers have become more demanding in times of digitalization. Competitors are just one click away, which is why expectations placed on products and services have gone through the roof. For this reason, excellent customer service now provides a major competitive advantage for the image of a brand.

On the other hand, in the hectic business routine of a startup or growth business, there is often little room for fostering professional customer relationships. Strategically speaking, many companies in this situation are better off, if they utilize their scarce resources to expand their core business and outsource their customer service to an external service provider. There are several reasons for this:

1. Professionalism Guaranteed from the Outset

Customers are emotional beings! According to a study conducted by McKinsey, more than 70 percent of customers bid farewell to a brand if they have a negative experience with it. According to a global research study, 84 percent of Millennials and Gen Zers would leave their preferred brand if another company offered a better customer service experience.

For the customer service team of a startup, this means that these high standards are placed on the employees’ shoulders. They must always behave in such a way that the precious new customer base has a positive experience with the company, which will prevent them from jumping ship immediately.

This requires customer service to be professionally structured. Customer service agents must be easily accessible, be psychological experts at dealing with customers and possess the ability to solve a customer’s problem or enquiry in accordance with their wishes. Professional customer support can also help to ensure that potential problems are identified early on and solved in a sustainable and efficient manner.

Before you go any further: In this blog post, we introduce you to the ABCs of customer service outsourcing. Perhaps you’d like to take a look before we delve a little deeper into the benefits of customer service outsourcing for startups.

2. Flexibility for Future Growth

Whether a product launch, sudden product success, Christmas trade or the summer lull: For companies in growth phases or with seasonal cycles, the support volume can change significantly from month to month. Outsourcing customer support to a professional partner provides you with support teams that can be adapted (expanded or reduced) at short notice according to your requirements. This saves you valuable resources that would otherwise have to be used for the recruitment and training of temporary staff or new permanent employees.

The ability to seamlessly scale your customer service also helps you to smoothly manage other phases of your startup’s growth. This would be the case if you wanted to expand your products into foreign markets and would require foreign language support. Or if you wanted to expand or restructure your customer experience with new customer services.

3. A More Efficient Cost Structure

As a startup, you should not see the outsourcing of your customer services primarily in terms of how much money you can save. Excellent customer support should not be too cheap; customer satisfaction is far too important to compromise in this area.

Nevertheless, by using an external partner, you achieve synergies that also have a positive effect on the pertinent question (especially for startups) of cost control. For example, you reap the benefits of the external service provider’s state-of-the-art infrastructure and the fact that it can train and deploy its employees more efficiently.

4. Increased Know-How in Customer Communication

One of the substantial problems that arises for startups when setting up their own customer services is the lack of experience in this area. This ranges from selecting suitable tools and establishing support processes right through to defining general criteria for professional customer service.

Good customer service helps you to develop a well thought-out strategy, implement effective processes that are tailored to your specific situation and keep pace with the rapid changes in communications technology. This way, you get in touch with your customers via the channels that are really relevant to them. In addition, you will create a modern, customer-friendly image with your customers.

5. Access to Innovative Technologies

Every company has to define its own standards for customer success. At the beginning of its market presence in customer support, a small startup may be more likely to focus on human interaction via a call center. This may be because customers have open questions about products or simply want to give their feedback. Over time, however, it can make sense to automate certain customer service processes, for example via chat support and social media.

Outsourcing to a professional service provider in this phase of your growth gives you the opportunity to easily fall back on technology-driven customer service solutions based on artificial intelligence or augmented reality. Intelligent chatbots, for example, are an exciting customer service solution available to startups that automate responses to customer queries on standard topics. An experienced service provider can build on its existing chatbot technology and tailor the processes to the needs of your customer support with only a few adjustments.

6. Understand Customers Better Using Data

When a startup begins to grow, the entire company changes. Teams specialize, routines become part of everyday work and a silo mentality begins to emerge. An important key to success in this situation is to ensure a customer-centric attitude prevails across the individual teams. This is where customer service plays a crucial role: it is the place where you can continue to maintain a close relationship with the customer.

A professional customer service provider can supply you with appropriate analytical instruments for this purpose. This way, you can incorporate customer satisfaction and their wishes into your company’s metrics to help you further develop your products and services.

7. Find the Right Partner for Future Growth Early On

With the timely implementation of an external customer service provider, you are better equipped for future growth. The sooner you establish a reliable partnership in this important business segment, the easier it will be for you to master future challenges. After all, according to Harvard Business Review, winning a new customer is five to twenty-five times more expensive than keeping an old one.

With the right customer service partner, you will learn from the outset which paths in customer communication work particularly well and recognize early on where action may be needed in the future.

Are you interested in the customer service requirements of your customers in the future? In the Customer Care Study 2025, we asked 1,700 Millennials and Gen Zers about their ideas. Click here for the complete results of the study.


Trends & Insights

About the Author

Eduard Falkenreck

As a business development expert in the after-sales industry, Eduard Falkenreck is constantly looking for customer service innovation – especially in new industries such as urban mobility and healthcare.