Posted June 6, 2017
There are just over 190 young tech companies in the world that are valued at more than $1 billion. But achieving ‘unicorn’ status doesn’t come without challenges. After all, the name describes a mythical and rarely caught creature.
One of these obstacles is simply standing out in a market already dominated by established brands. That’s not to mention competing against other start-ups seeking to attract and conquer the same audience, industry or demographic.
So how exactly are these unicorns elevating themselves above the competition? Kabam, Instacart and Credit Karma — three companies that have received valuations of $1 billion in recent years — shared insights on their experiences at the Collision Conference in New Orleans in May.
For them, it’s all about the customer experience. Here are three ways high-valued fast-growing tech companies are leveraging customer service to differentiate themselves from established businesses, as well as competing start-ups.
1. Recognize your VIPs
In its journey from start-up to leader in mobile and online gaming , Kabam co-founder Holly Liu says that recognizing “VIP” gamers — and providing them with top-tier support — is critical to customer engagement and retention. “With console games, you open the shrink wrap and that’s the game you play. It doesn’t change, and you can’t return it,” Liu says. “Kabam’s business model is a bit different, as we very much look at gaming as a service.”
Liu says Kabam pays a lot of attention to the demographics of its audience. “We need to understand who they are, and how to get them engaged with premium play to generate revenue,” she says. “This is where service becomes incredibly important. We set up our call center and customer experience agents to look at each players’ needs, and always provide them with useful content.”
But one of the primary challenges can be defining and identifying who the VIP gamers truly are. “Initially, we viewed VIPs as those who spent a certain amount of money,” recalls Liu. “[That] definition has changed over time, because spending doesn’t provide a full picture. We started looking at how often people return, as well as retention rates. We looked at this concept of who our ‘regulars’ are, and found that people who came back most often throughout the week are more likely to become lifelong members and players. Those are the people who often contribute most to the community aspect of games, and should also be treated like VIPs with top-tier support.”
2. Talk directly to customers
As fast-growing tech companies grow in both size and valuation, it’s critical that they continue to interact directly with customers. “It’s something that I don’t see young start-ups doing enough, but is super easy,” observed Instacart co-founder Max Mullen during his speaking session at Collision. “I have a 30-minute commute in the morning on a train. So, every morning, I’ll pick five customers [who’ve complained], and I’ll email them during the commute. I’ll say ‘Hi this is Max, I want to talk to you about the moldy raspberries you received. Call me or send me some thoughts on how we could do better.'”
“You find incredible insights just from talking to customers. And it also blows their mind,” Mullen continued. “It’s as if your cable company came and serviced your house, and then five minutes later the CEO calls you. That’s a magic moment that you can deliver to customers. Personally talk to your customers all the time, and get everyone in your company in the habit of doing the same thing.”
In that same vein, Raman Naidu, director of member support at Credit Karma, pointed out how conversing with customers to get honest feedback has helped Credit Karma improve not just service, but products as well.
“Our products have evolved over time, and many of the new features are thanks to member feedback,” he said. “Our product team uses feedback from our member support team to develop requested features and to solve pain points. This gives our member support team agency, and allows them to champion specific member issues.”
3. Utilize customer data and intelligence
Aside from using direct interaction with customers to make improvements, Credit Karma focuses on using data to improve member service and experience. “For example, we can predict how our members’ credit health may drift based on their activity and behavior on our website,” Naidu said “We then use this data — whether they’re actively reading how-to articles or shopping different rates on loans — to serve better recommendations. The tools and models we’ve created from our data allows us to provide a more valuable experience for our more than 60 million members.”
Credit Karma’s goal is to help its users make financial progress, says Naidu. “As a result, we’re constantly developing innovative ways to alleviate pain points. For example, if we notice our members consistently stay on a page for a longer time than expected, we’ll set up chat support or work to improve the copy or navigation on that page.”
Being consumer focused, talking directly to customers, and giving top-tier service to true VIPs are just a few of the ways that the unicorns at Collision got to where they are. These successful unicorns agree that brands adopting a high-tech, high-touch approach to customer service stand the best chance of keeping those customers for life.