Zendesk makes bold CRM move with new platform and sales suite

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Zendesk is a well-known and huge presence in the help desk market. Founded in 2007 in Copenhagen, Zendesk is now a public company that serves over 150K customers globally and is rapidly approaching $1 billion in annual revenue. Impressive.

Visit review sites like G2 or TrustRadius and you’ll find Zendesk gets very good reviews (4+ out of 5) and is generally positioned as a mid-market solution, although small and large businesses use it too.

But clearly Zendesk leadership believes that future growth is tied to becoming a “platform” (more on that in a moment) and adding new applications — to support selling for starters. Last week Zendesk made a buzzword-compliant announcement of “Service-First CRM Solutions to Transform Customer Experience.”

OK, that pretty much covers all the bases. CX is trendy, CRM is a huge space, and most everyone appreciates good customer service. To learn what this announcement was about I spoke with Shawna Wolverton, SVP of Product at Zendesk. After 14 years at Salesforce.com, she made the move to Zendesk in late 2018. A self-described “UX product fanatic,” Wolverton says she wanted to take a “more modern approach” to enterprise software, including bringing a “service-first” approach to software.

Put another way, instead of leading with an IT/automation or sales focus, Zendesk wants to emphasize helping customers and providing a great experience. I like the sentiment, but for this to work Zendesk will need to find customers receptive to CX thinking. So far, in my CX research I haven’t picked up much CX traction in sales organizations, but based on recent Deloitte research there are some green shoots appearing for “experience selling.”

Officially, Zendesk says its new Support and Sales suites enable “companies to take a conversational approach to customer experience, regardless of channel.” Visit the Sales Suite and sure enough you’ll see the emphasis on a mobile UI for sales and how web chat can lead to sales conversations. Contrast this with the more traditional approach of sales solutions that emphasize process automation and lead management.

Still, the sales solution is a bit, um, young, and won’t compete well in large enterprises in the near term. Existing users of its service solutions are the most likely prospects, like ChartMogul, which sells an analytics tool for SaaS businesses to track key metrics like MRR and churn. Sara Archer, Director of Sales & Marketing, says the company used Zendesk for support and integrated with a niche lead/pipeline management solution. With Zendesk Sales Suite, she gets a deeper integration of sales and support in one solution, which will help her see the “bigger picture” about the health of customer relationships, and facilitate better coordination within her team.

Yes. While modern cloud-based CRM tools are much more easily integrated than in the old days of installed software, it’s still easier on one platform. Or so companies like Oracle, SAP, and Salesforce.com argue.

So, what is a platform exactly? My non-technical definition is “something you can build on.” Buy (or rent) one piece of technology that can serve multiple uses, via a shared database and other services. Then add other solutions that take advantage of what you’ve already got.

Classically, CRM platforms include modules for sales, marketing, and service. Most CRM vendors have started with sales and then expanded into service and marketing. RightNow attempted a service-to-platform shift and failed, but eventually got a nice exit via a sale to Oracle. Recently SMB-focused Freshdesk repositioned as the Freshworks platform, which I suspect had something to do with the Zendesk strategy.

Independent CRM analyst Thomas Wieberneit sees fierce competition for Zendesk.

Most of Zendesks customers will already have sales force automation software in place. These will need to be convinced to change. Net new names have plenty of choices. Again, Zendesk needs to convince. This works by demonstrating superior value through ease of implementation, UX, and offered functionality, at a very reasonable price, especially since the most likely target market is the SMB market.

Agreed. Not going to be easy, but it’s the right move for a company with long-term growth ambitions. Personally, I’m happy to see a “service-first” approach to CRM software. Zendesk’s timing could be good as CX thinking catches on outside of customer service.

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