The global startup funding landscape has notably changed over the last year. We've seen venture capital firms become more cautious about their investment choices. Ask any early-stage founder.
This shift, caused by the shaky global economy and threats of recession, challenges startup survival rates. At the same time, it also comes with a big break in the clouds. Startups making it are better positioned for future growth as they've had no choice but to establish more sustainable and thoughtful business practices to stay afloat.
Luckily, there are support mechanisms and programs out there helping early-stage startups adopt future-oriented and self-sufficient business methods to survive this funding winter. One such is the Zendesk for Startups program.
Addressing metrics investors care about
Not long ago, startup funding deals secured within a few days were a natural part of the ecosystem. Today we see VCs being more cautious in their picks. Venture capital firms are displaying a renewed focus on startup metrics and data insights, such as Net Revenue Retention (NRR) – a measurement of the recurring revenue a startup can count on. As investor Eugene Lee, partner at OMERS Ventures, says: “It seems that the market isn’t being funded on hype, but is back to fundamentals.”
From the VC perspective, high NRR indicates a healthy business and steady clientele and is a crucial metric in the process of startup investment evaluation. Thus, high NRR equals higher VC interest. But how does an early-stage startup boost its NRR? By prioritizing customer relationships.
That's where the Zendesk for Startups program comes in.
Zendesk is a cloud-based customer service software that provides a platform for businesses to manage customer interactions across various channels, such as email, chat, phone, and social media. It allows businesses to consolidate customer support queries and manage them from a single, centralized platform.
In a time when tech companies are closely observing their profit margins, opting out of non-critical subscriptions, and consolidating their tech stack, the Zendesk for Startups program helps startups build out their customer relationship systems with little risk. This comes in the form of scalable customer service, engagement, and customer management tools.
Within the scope of the Program, qualifying startups receive free Zendesk use for six months, complete with support from Zendesk's experienced team, ensuring startups adopt and use the solutions in the most profitable and sustainable ways.
To qualify for the program, a startup must:
- be a new Zendesk customer (no history or current use of Zendesk solutions),
- have fewer than 50 employees,
- have raised outside funding (up to Series A).
Customer retention – a critical factor startups can't afford to snooze on
Based on the 2022 Zendesk Customer Experience Trends Report, over 60% of customers will likely switch to a competitor after encountering one negative experience. Moreover, this percentage increases to 76% after two negative experiences. When it comes to customer relationship management, there's no room for mistakes.
Experienced entrepreneurs know – acquiring new customers is more expensive than retaining existing ones. Loyal customers tend to spend more, provide positive reviews, and refer other customers to the startup. Focusing on keeping existing customers happy is a good business move – it reduces churn rate and increases customer lifetime value, resulting in higher revenue and profitability.
Using Zendesk solutions can be the crux of keeping customer relationships in focus and signaling to future investors that a startup's business processes are sustainable and growth-positioned.
Besides, Zendesk not only helps maximize revenue from the customers already acquired by a startup but can also play a significant role in improving the startup's products. Zendesk's analytics tools equip startups with insights into customer behavior and help identify areas for improvement. As a result, businesses can make data-driven decisions to improve both their customer support process and products and drive growth.
The importance of meeting customers where they are
Reducing churn and expanding business with the existing customers is especially important when it comes to surviving leaner times as a startup. The Zendesk for Startups program enables young companies to engage with their customers in ways that are the most convenient and relevant to them by offering valuable insights into customer behavior.
Anticipating customer needs is essential for a long-term relationship and revenue maximization. And in times when VC funding has become harder to capture than ever, stable revenue generated by a loyal customer base is the most valuable asset of a startup survival kit. Zendesk's program unlocks excellent customer support, giving any early-stage startup a competitive advantage.
To apply to the Zendesk for Startups program or receive more information on the program and application process, visit this page.