Zendesk Takes Customer Support Upscale, Adds Enterprise Version

8/8/11Follow @wroush

San Francisco-based Zendesk, a maker of Web-based customer support software, is a company I’ve been following for a few years now. That’s partly for geographical reasons—like me, the startup was based in Boston for a while, then moved west to San Francisco—and partly because they’re simply nice people who really walk the walk when it comes to making customers happy (the happy Buddha sculpture in their office isn’t just a knick-knack). So I wanted to get on the record with some big news from the company that I didn’t have time to cover last week.

Like many startups offering cloud-based services, Zendesk started out with a focus on small- to medium-sized businesses, which are often in the best position to adopt new technologies, since they’re not so locked into big, legacy, on-premises software systems. Indeed, the startup has signed up more than 10,000 SMBs as customers. But last week Zendesk announced that it has reworked its system to support large companies as well—and that it has already signed up some major users such as Adobe Systems, MSNBC, Rackspace, Sears, and Sony Music.

It’s a tricky transition to negotiate, since many of the features that large enterprises need—including high-level security and access controls—are almost antithetical to the open, collaborative, social-media-friendly spirit baked into many Web 2.0 services. But there’s a big incentive to cater to these larger customers, who can end up paying for 1,000 or more seats, compared to the handful that most smaller companies need.

Mikkel Svane

Zendesk CEO Mikkel Svane says he realized over the last year that Zendesk wouldn’t have to completely rebuild its platform—which helps companies track and respond to customer complaints via multiple channels, including e-mail, Web forums, and Twitter—to make it attractive to large companies. “We made it to almost 10,000 customers without an actual sales force,” Svane told me. “The minute we implemented a sales force we realized how many large companies were interested in adopting Zendesk if we could just cater for some of their needs related to security, administration and operating globally with multiple brands. From there if was just a question of building it.”

New features built into the enterprise version of Zendesk include the ability to build separate customer support portals for multiple brands, yet administer them centrally; the ability to restrict access to certain functions according to an employee’s role in the company; and archiving of all customer support interactions, for legal and compliance purposes.

Reflecting all these added features, the enterprise version of Zendesk comes at a higher price: $99 per user per month, compared to $24 per month for the “regular” service package and $49 per month for the “plus” package. But to make the service more accessible across a large organization, Zendesk has added a “light agent” option that lets occasional users such as supervisors access their agents’ support conversations without paying for more seats.

A big part of Zendesk’s pitch has always been about transparency, and the benefits of swiftly connecting customers with the person inside an organization who can answer their question or solve their problem. “We wanted to streamline help desk systems, move them to the cloud, and bring never-before-seen transparency and openness to the customer engagement process,” Svane writes of the company’s founding in 2007. But most large enterprises have concerns that conflict with that kind of openness. I asked Svane how the company plans to stay true to its mission, even when its tool is being used inside large enterprises bound by the need for rules, boundaries, and compliance.

Large organizations select Zendesk “because of our commitment to customer enlightenment and help desk bliss,” he answered. Some customers value transparency, he implied, while for others, Zendesk’s record of innovation is the real attraction. In February, for example, the company introduced an iPad version of its software that lets customer service agents monitor support conversations from; in April, it introduced a new satisfaction rating system that lets Zendesk clients survey their own customers about their support performance. “Customers feel confident in our ability to innovate and execute,” Svane says.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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