Fresh thinking - how Freshworks plans to tell its ‘CRM++’ story to everyone, not just those with $300 million to spend

In an age when taking to social media platforms has become a default action for customers who have problems with companies products or services, it was sobering to be reminded by Girish Mathrubootham, CEO and co-founder of Freshworks, that this was not always the case.

In fact, it was his own experiences with a service provider, in this case a shipping company, that led to the formation of the CRM firm itself. Mathrubootham’s particular pain point was finding that an LCD TV he’d had shipped from Texas to India arrived damaged at his destination. What happened next will be all too familiar to all too many people. As he tells the story:

I thought it should be fairly straightforward to call the shipping company, a straightforward customer support thing and get the refund processed. But long story short, five-and-a-half months, multiple phone calls, multiple emails later and the company simply wouldn't refund the money. At that point I decided, 'OK, I don't care about the money anymore. I want justice!’.

Back in 2010, Mathrubootham’s response was to go into an online forum and air his complaint. This resulted in a lot of community engagement from others in this forum, until the head of the shipping company came online, apologized and the refunded the money the next day. This chain of events got Mathrubootham thinking:

I'd built four helpdesks in my career before and I was very aware of the concept of multi-channel customer support. In those days it used to be phone, email, chat and website forms. I felt like the power had shifted from the company to the consumer, where I was able to take the company online and force them to do the right thing. So the idea for a fresh helpdesk came in my mind. We started off in support, and instead of just building function, we actually built a multi-channel helpdesk with new channels, like Twitter and Facebook. We were the first truly social helpdesk.

From that starting point in customer support with Freshdesk, Freshworks expanded its reach after finding that around a quarter of its customers were using the product for internal IT support and employee support. Mathrubootham explains:

I had experience as an IT service manager myself, so I knew the ITSM  (IT Service Management) market. I thought, 'OK why don't we take some of the core pieces of process and build a separate product for ITSM and employee engagement?’.

Out of that idea came Freshservice. Today, the two products make up the majority of the firm’s revenue, with a go-to-market pitch of simplicity and ease of use. Mathrubootham says:

We've been able to build intuitive products designed for the end user. Because people come to us online, we don't go and sell to the C-Suite. The products are bought by [front line] teams who are [doing the] evaluating, so people have to feel that 'I can do this myself'. The customers coming online are not going to hire a systems integrator partner and go into a 12 month implementation cycle.

Initially customers were SMB firms, but departments of larger companies, such as Burger King, Schneider Electric and 3M, also came on board. But while the sales strategy was adapted to accommodate such business opportunities, Mathrubootham’s core philosophy remains the same:

Our job is to help all these companies who don't have a $300 million budget to actually be able to digitally engage with their customers.

Socially mobile

One thing that has changed in the decade since the firm was founded is the rise of the social media empires and how organizations use these platforms to manage, resolve and, on many occasions, deflect service issues. If customers have an issue with a product or service, many will take to Twitter or Facebook to air their grievances and berate their supplier for its shortcomings. Savvy brands now have dedicated social media watchers as a matter of course, jumping in to meet such customer pushback at the earliest opportunity - and to get complainants out of the spotlight of the public gaze and into private DM conversations.

How customers use this platform for complaint has actually changed as well, reckons Mathrubootham, and for the better:

Social media started off as a place where people used to take on the brand, but I think by even as early as 2015 or 2016, because there were so many fights…complaints started going down, mainly because there were just so many of them that people started to not take them too seriously. I would say in 2013 and 2014, that [public complaints behavior] was at its peak.

What has happened now is social media platforms  have become new ways for companies to route customers into a one-on-one channel, as opposed to a public channel. If somebody is really upset, they’re not just going to go public. Nowadays what happens is, people try to get support via chat. The company has to have really frustrated you for you to go out and rant.

All of this has altered the nature of what we think of as CRM, Mathrubootham suggests, noting that when many of the sector’s leading firms started over 20 years ago, technologies that are taken for granted today weren’t around:

There was no social media, there was no messaging, there was no cloud telephony, there was no public cloud, no marketing automation. Technology evolved over time and companies kept adding to the CRM stack. If you really wanted to take care of a customer, you needed marketing automation, you needed to bring in all these channels of communication, like chat and messaging and social media and so on, and then add support and commerce.

That stack piling up over the years has left many companies struggling to manage siloed data, he argues:

Now companies are being forced to buy a Customer Data Platform to try to stitch together a 360 degree profile of the customer by pulling information from all of it. Companies are doing it because every company wants to understand their customers better. They want to target their customers and they want to be able to engage better at sales scenarios. You want to extract more lifetime value for the customers, you want to service your customers better, prevent them from churning or upsell them by understanding their adoption. Every business wants it, but the reality is the silos are making it harder. We look at our job as, ‘How do we make it easy?’.

Next steps

Despite the target audience not being the C-Suite, the past couple of years has seen Freshworks attract some strong enterprise cloud talent to its ranks, such as CFO Tyler Sloat, formerly of Zuora, and Chief Product Officer Prakash Ramamurthy, once Senior Vice President of Product Development and General Manager of Oracle Cloud systems management and security products.

The most recent recruit to join the team is Stacey Epstein as the firm’s new Chief Marketing Officer. Epstein, whose previous roles include stints at SuccessFactors, Zinc and ServiceMax, will be heading up the telling of the next chapter of the Freshworks story. She explains:

The company has really grown because it's a great product and there's been a lot of organic product-led growth - sort of, if you build it they will come, versus 'We're going to tell you about it and then you're going to come'. Now's the time to really get out there and focus on telling the world about [Freshworks] and building the brand. When the world really understands exactly what Freshworks is and what we can do going forward, that brand building activity is just going to be a multiplier on the business.

And understanding what the company can do is important. While Mathrubootham pitches Freshworks as a “CRM++ company”, most media and analyst coverage of the firm to date veers towards lumping it in a big box marked ‘Salesforce rival’. There’s much more to the story than that label, argues Epstein:

I do think it undersells what we are about and what we can accomplish, because it's not just CRM, it's also ITSM. But our customers don't just use it for IT Service Management, they use it for HR requests so it's really Employee Service Management. If you wanted to say who our rival is, it's all those big companies that have 20 year old software architectures that are not able to be agile and turn out modern features like we can.

I would say we're addressing the segment of the market that Salesforce isn't addressing, Zendesk isn't addressing, ServiceNow isn't addressing, and we’re starting to move into areas Workday isn't addressing, because they're focused on the Fortune 500 and we're focused on everyone who wants to be able to delight their customers and employees in a fast and easy and affordable way.

As a pointer to what might be to come in terms of positioning, Epstein cites recent research from Gartner that talks about ‘total experience’, pitched as the intersection between customer experience and employee experience. This is a concept that appeals to her:

The more you work to delight your employees with easy-to-use tools - whether they're a user of a tool to service customers or they are the customer because they're being serviced by the ITSM solution - delighting them and making their jobs easier and more productive, relates to success with customers.

My take

How this messaging shapes up in the coming months will be interesting to track. There are some clear positives, such as some strong customer logos to talk about; there are also some trickier issues to navigate, most notably some unfinished legal disputes with Zoho. And inevitably there will be speculation about a possible IPO. The firm continues to bring in talent with enterprise clout - there’s a new EMEA head on board now in the shape of John Crossan, formerly of Zendesk - which might be read as suggesting that a move to go public could be on the cards. Indeed, a couple of days before I spoke with Mathrubootham and Epstein, rumors circulated that such a move might be imminent, although the CEO shoots such speculation down, for now at any rate.

Freshworks is one of those companies that I’d been aware of, but had never really encountered up close until now. That, I suspect, is something that will change as the ‘telling our story’ push gets underway. I hate the ‘we’re the industry’s best kept secret’ line that gets rolled out all too often in the tech sector, my only reaction being, ‘Well, whose fault’s that?’. I’m not expecting to hear that one trotted out in this case. But there’s clearly a lot to see here that perhaps hasn’t been pushed to the fore as much as it might have been, despite some notable profile-raising antics involving an airplane flypast at a recent Dreamforce conference. That’s the sort of guerrilla marketing that Salesforce used to engage in outside Siebel events in its formative years. Ah, CRM - plus ça change etc.