How Chatdesk CEO Andrew Olaleye grew Chatdesk to $14M revenue with a 197 person team in 2024.

hi everyone I'm inato I'm the CEO and co-founder of chat desk we are a software company based here in New York we help leading Brands scale their customer support and drive sales using generative AI some people like to call it Uber for customer service so AWS for customer service before starting this company I was at Google for over seven years as a product manager where I worked on voice search and the Google Assistant which is part part of what led us to the technology insight for this business and I'm going to talk about how we grew our annual revenue by three times in one year this past year through upsell to our existing customers so I'm going to cover why upselling is important uh how or what to upsell that might be relevant for your business and how to go about upselling so just to give some more context on what chat desk is we've been around for over six years and we've first started by talking to lots and lots of customers our mission is to solve customer service and create jobs that's what I'm very passionate about creating jobs through customer service and so we talked to hundreds of customer service leaders about their pain points and that's how we came to the solutions that we offer them today so for example they talked about how they have so many phone calls you've probably called customer service before and you're waiting on hold because they don't have enough agents to answer the phone calls so we gave them a call deflection solution which shifts calls over to self-service SMS chat mobile apps around 10 of the calls deflect over which is helpful to you as a caller because then you can go to those other channels and it reduces cost for the company by up to 80 percent so that's the first solution we launched and a lot of customers say well I have all these messages I have these social messages emails shouts and I want to know what people are saying so we built an automatic tagging solution which is actually a free tool we still offer today anyone can sign up connect their zendesk connect their social and they get this free dashboard where they can see all their customer insights again this came from talking to customers and then we all log on to our main solution which is 24 7 support many brands that you probably use today if you email them someone from chat desk is actually responding to those messages so we give 24 7 support on all these different channels and the last few years have just been about commercializing and growing that business and then we're rolling out a new solution called proactive engagement to help companies acquire new customers and also win back and retain and drive repeat orders so this has been our journey around kind of product development and customer development just to give you some context about the next information I'm going to give you so I said we tripled our Revenue uh in the last year through upsell and I wanted to zero in on an example customer so you can see like step by step how we did that and then I'll pull back into like the principles around it so one of the principles is we always try to get a foot in the door we just want them using something that we offer at some price because we know we can land and expand later so for this particular client if this is a real client with real data we started with our social media moderation they run ads on Facebook Instagram and we reply to the comments we hide the negative comments so it increases their conversion of those ads and they're just paying us like a couple hundred bucks a month for that and that's okay because we know this company is actually huge and if we can grow with them we'll upsell over time then we gave them the free automatic customer insights they connected their email platform and so all those were flowing into our system it was free but it also gives us insight into their business right now we know what their customer support tickets are about in advance imagine someone coming from the outside they know nothing about the company but we actually know everything about the company because they're connected to our dashboard and then this business has some seasonality and that means there are ticket volume spikes around the holidays and so naturally just by being their vendor we get more Revenue because we have a usage-based pricing model so then we get upselled there just naturally and then what happened is their existing provider for email support fell down over the holidays they couldn't provide the service they didn't do a good job and so we said hey we can do it and we're already connected it's already integrated just have to say yes and then we jumped in and we started doing their email support right and then they started offering phone calls so we said we do call deflection so they start using that and then they said we want to do SMS can you do that too he said sure we did that too and then they had another holiday Spike so you see how like it just builds and builds and builds and I'll go through some of the principles um that are in here so first of all let's talk about why like why do we even talk about upsell why do we care about upsell I think for me it's I want to deliver more value to my customer like we're all business people in here we're trying to do a job because we want to help a consumer that's why we got into business it's not really about making money the many things to do you can do to make money it's about helping people achieve their goals achieve their business grow their business that's what keeps me like excited you know so when I talk to our team our customer success team until like I know this is about making Revenue but don't think about like that think about how you're helping your clients be a hero because every person when they're buying Enterprise software they're trying to get promoted they're trying to spend more time with their family that's what you're trying to accomplish for them so first of all I'm thinking about how can I solve a problem for them and so the more you're upselling actually doing more for them that helps them be more successful the second is it's easier it's easier to sell something to existing customers because they already trust you than to get a new customer on board so of course that's why a lot of your revenue is going to come from upsell and then finally helps you be sticky in these current economic Times everyone's looking at their budgets they're slashing they're cutting their vendors so the more solutions the more footprint you have an organization with more solutions those the harder you are to kill basically so that's another reason just for survival I believe if you're not growing you're dying because all these clients they're constantly getting pushed by their management team hey what are you doing to be Innovative what are you going to do this year what's your strategy this year and they'd love to come and say oh I have a new plan from this existing tool that's going to help me solve this new problem and if you're not giving them something new they're going to find another vendor who's giving them something new so even if they're not buying you always have to be saying here's some new thing that I offer you um that's how you stay in that's how you retain clients the granddaddy of software this is SAS open is Salesforce Salesforce is brilliant this they have Salesforce service Cloud Salesforce Commerce Cloud sales marketing Cloud now they have slack they always have something to give you for every part of the organization and that's why they're a monster you know are they doing I mean they have some challenges now but like they've done so well over the years so you don't have to look far to see how this whole thing comes together so you know I didn't come up with this overnight when we started the business I read this book called four steps to Epiphany some of you might read it here so anytime I meet an entrepreneur I tell them hey you should read this book first and it's actually recommended and required reading for people in our company and it's a pretty simple principle it says talk to customers uh and just keep talking to customers and I still talk to customers even though I've been in the business six years I love talking to customers because I get new ideas I get insights it helps me think about what we should be doing next for the company and for our customers and then when you talk to customers actually listen to them some people talk to customers and they just do what they want to do anyway that's a waste of everyone's time and sometimes the things they say are not actually what they means you have to kind of uncover there's questions you can say like what's top of mind for you right now or like if I could wave a magic wand and solve your problem what problem would that be and that's when they'll really tell you what's really burning and what they want you to solve the final thing is people will tell you to solve all these things but only solve the ones that they have budget for because I made all these mistakes where we said oh if we build this feature then they'll buy and then buy no pay me first sign the contract first then we're gonna build it right so this is where you can waste a lot of time if you go solving problems for people who don't have budget for those problems to be solved you know so that's you know some takeaways from this book but there's many more you should read the book so now let's talk about what to upsell so the way I structure this is from least complexity like easiest effort to most risky most complexity and there's all these situations where a client will say something like hey I have this extra thing if you...