As the Vaccine Economy opens up, organizations need to be looking to take what positive learnings they can from the pandemic as they re-consider the nature of customer service, says Zendesk founder and CEO Mikkel Svane.
As the CRM firm turned in Q1 revenue of $298 million, up 26% year-on-year, and a GAAP net loss of $49.0 million yesterday, Svane spoke of the need to re-evaluate approaches to customer engagement, arguing that the COVID crisis has changed a lot of things permanently:
These are the trends that we're talking about with our customers - what has changed on a more permanent scale, on a more permanent permanent timeframe, with the kind of the convenience we can bring to our customers, because these things will last. We will never go back to how things were before. How we shop, how we consume, how we watch movies, how we get our stuff, all these things will have changed permanently. We will take what we have learned, the best from the pandemic, and that will play a big role in how we do things going forward. That’s what we are seeing that's what we're talking to our customers about.
The pandemic has made customer experience much more front-and-center for a lot of businesses, because it it changes all your traditional metrics and it changes all your traditional ways of thinking about the customer relationships. There’s no doubt that that's the backdrop for the change we're seeing and how people have to think about customer interactions and have to think about new channels, embracing these channels and building customer relationships in a different way…We’re definitely living in a world where the customer experience, the customer engagement over all these new online channels, is much more front-and-center.
Keep it simple
Zendesk’s objective is to assist in this re-assessment of what how customer service works and to make it simpler, quicker and easier, he argued:
A lot of what Zendesk is about is this concept of democratizing technology, democratizing capabilities that are normally more complicated, more expensive, [making it] easier to adopt and use and so on. That’s one of the main driving North Stars for the [Zendesk] suite. It’s not just about putting things together.
It's really about, on one side, making things work elegantly together and making it as easy to set up a call center or messaging-powered customer service or an email-based one or [be able to] switch between the three and just don't have to think too much about it. You don't have to plan all these scenarios. It’s relatively easy, the technology of the product is guiding you.
On the other side is [the idea that] we probably have, with all the capabilities and all the features and all the stuff we can do, probably put too much friction into the sales process, so it became a little overwhelming for a lot of customers. We simply put too much choice and confusion in.
There are two trends at play here, he explained:
First and foremost, we’re really invested in simplification, really making things elegant, quick to use, easy to use, very easy to set up, very easy to get going. And then we've made messaging an integral key natural element of the whole flow by which you can communicate with your customers. These are two key trends we see amongst both new and current customers, so we are very bullish about the continued adoption of this.
As to the elevated role of messing in the re-imagined contact center environment, social and private networks are now the fastest growing channels for Zendesk, said Svane, although stats aren’t yet available to support this. But he insisted:
There's no doubt that that's the behavior that, as people are re-engineering and re-thinking customer service, adapting it to this new world that we're living in, there's no doubt that messaging is front-and-center.
It also challenges how we think about our products and routing and escalations and so on. Message-based integrations are very different from an email-based interaction and that's, of course, something we're working with all our customers on. A lot of our customers also have to deal with [the fact] that that's a different way of engaging with customers. It looks a little different, you have to think about staffing differently and measuring differently, and all these different things, but we're going through that journey with all our customers and it's very exciting.
Into the Vaccine Economy
Looking ahead for the rest of the year, Svane appears confident that his simplification message is getting across:
I think we have achieved what we wanted to achieve. It’s really about simplifying our pricing model, making it much easier to understand, much easier to buy our products and much more transparency around these things - these are key areas [where] we have 'sophisticated' all our products and product operations over the years. One of the key asks and key demands in the market was to simplify these things. And it works out. We see a growth in average deal size, not only from bigger implementations, but from the deals we can do with the suite. We see an optic with the new suite. So we have achieved what we wanted here, to make the perception of the product much easier, much simpler, much cheaper, if you will, but we are seeing all the improvements in every deal size that we had hoped to see.
And the emphasis on the Sunshine suite is also paying off, he says:
Our focus with the suite is to make a lot of the Sunshine components easily available for our customers, without having to go into a new purchase conversation, and also making some of these tools a little bit [less] developer-heavy and and more easy and friendly to use for the majority of our customers. We're definitely seeing Sunshine in a lot more hands today. I think it's too early for us to exactly talk about adoption, but it's becoming more part of of the normal adoption of Zendesk.
Our plans for Sunshine are primarily focused on getting it into people's hands and having people start using it more naturally as part of extending and building capabilities alongside the suite. So making this really, really accessible, making it very, very easy to use, is kind of our key focus for this year. Once you out of the basic capabilities, there's an upsell opportunity which is, of course, important for us, but I would say right now and we will be for this year, [we are] much more focused on getting it into the hands of people and getting them to use it.
Svane’s point about taking positives away from the pandemic is well-made. In recent weeks, as vaccine programs have rolled out in many parts of the world, it’s becoming increasingly obvious which organizations have used the enforced ‘downtime’ of the COVID crisis to re-evaluate how they operate, take learnings away from that and adapt to what I suppose we will have to keep referring to as the New Normal (whatever that means). The crisis put enormous pressure on customer service agents across multiple business sectors and a lot of them rose to the challenge. How they now move into the new Vaccine Economy is a conversation that all businesses need to be having with themselves and their customers.