Why Cloud 100 startups are investing in CX

SaaS startups are continuing to capitalize on the power of digital-first workplaces, even as many companies in that category adopt hybrid models in our post-pandemic world. Despite what some describe as a VC funding squeeze, the world’s top private cloud companies (and more like them) are still going strong in their categories, for the good of their customers. And, for another year in a row, the vast majority of the Forbes Cloud 100 uses Zendesk to deliver a great customer experience.

The Forbes Cloud 100 is a list of the world’s top cloud and software as a service (SaaS) companies based on factors including growth, sales, valuation, and culture, as well as a reputation score determined with help from their public cloud company peers. More than 75 percent of the Forbes Cloud 100 uses Zendesk for customer service and sales, suggesting that customer experience (CX) plays an important role in their rise to the top.

Read on to see why so many of these leading startups are investing in CX—and why you should be, too.

1. Cloud companies know their software needs to be seamless, and they want their customer service to be seamless, too

   Less than a third of startups we surveyed for the 2020 Startups CX Benchmark Report had a CX solution in place, but the majority of Cloud 100 winners did. These cloud and SaaS companies know the value of a good experience–perhaps better than most–because the success of their own software solution depends on it.

   Automattic, the parent company of WordPress, made a name for itself by demystifying HTML and the process of creating and publishing blogs and websites. It makes sense that they’d want their customer service to be just as seamless. By investing in solutions that make life easier for the customer, that investment appears to be paying off. More than 75 million websites globally depend on their tools to keep their websites up and running, resulting in more than 50,000 support tickets per month. Still, their decentralized support team with hundreds of agents worldwide enjoys an average CSAT of 85+ across support channels.

2. The world continues to keep companies on their toes—it’s more important than ever to meet customers where they are

   “Today is a great day to invest in your customers, define this new standard of great service, and deliver both an experience that is personalized and fast and convenient and set to meet their needs,” said Jeff Titterton, Chief Operating Officer at Zendesk, at the 2022 Traction startups conference.

   This rings true even as the digital-first world unfolds and as the bar gets higher for customer service.

   This is consistent with the data, which shows that top-performing startups implement support sooner and expand it faster. After two years, these startups were responding to customers twice as fast as their competitors. That’s a difference that customers are sure to notice.

   With an omnichannel solution in place, companies can adapt quickly to meet customers where they are—even if they suddenly shift, as we experienced in 2020 with the rapid emergence of messaging in response to the pandemic. For example, the Zendesk integration allows users to create a ticket directly within Slack or to collaborate with internal teams on the issue, providing another avenue for getting answers for customers as quickly as possible.

3. There’s no shortage of competition among cloud software companies, and CX can be a differentiating factor

   More companies are likely to enter the cloud software market in the years ahead. As competition intensifies, SaaS companies will need to rely on more than just their product to set themselves apart.

   “It’s a high-stakes game–61 percent of customers will now defect to a competitor after one bad experience, up by 22 percent from last year,” according to the Zendesk Customer Experience Trends Report 2022. “Make it two negative experiences, and 76 percent are out the door.”

   This suggests that for companies facing stiff competition, CX is a good investment. It may also explain why so many Cloud 100 companies are prioritizing it.

Looking ahead

Every company, from the smallest startup to the largest enterprise, will need to be agile and customer-focused if they want to remain competitive in the current landscape.

According to Titterton, startups have an advantage in their ability to be more agile than most.

“SaaS companies are built on the principles of being fast and flexible, which has helped many continue to grow even through the uncertainties of the past year,” Titterton says. “The most successful teams understand their customers deeply and make swift, informed decisions to serve them better.”