UC3 News — 20 February 2018
Nicolas De Kouchkovsky png
New Kids in the Customer Interaction Management Space: Zendesk by Nicolas De Kouchkovsky

If the combination of CRM and call center software is not new, we need to credit Zendesk for making one of the boldest moves pursuing it. Over the past couple of years, the company has been growing its solution set beyond customer support. Let’s continue our exploration of the new kids in the customer interaction management space with them.

A bit of history

Early 2000, Siebel, after creating the CRM category by federating sales force automation and customer service, added interaction routing to its suite. It triggered the first wave trying to combine CRM and call center software. It was making a lot of sense–both were already two of the main building blocks of a customer interaction management stack–but these applications were coming from two disjoint worlds and were hard to integrate. 

Despite making 30% of its business with call center departments, Siebel remained challenged meeting the needs of its large customers. It bought Ineto to ramp its call center capabilities and, after being acquired by Oracle, snapped Telephony@Work. But most enterprises continued to purchase the two capabilities independently and Oracle ended up sunsetting the combined offer. SAP followed its nemesis by purchasing Wicom. If the company is still offering it as Hybris Service Engagement Center, market traction has remained limited.

One cannot provide a historical perspective on the coming together of these two markets without discussing Salesforce. Its Service Cloud product has become a dominant force and includes many interaction management components. Without revealing too much of a future article in the series, it is striking to note that, if the cloud giant has been adding to its arsenal all digital channels, it has stayed away from call management, only adding some telephony capabilities to its Sales Cloud. 

Enters Zendesk

The company entered the call center market in 2015 with the stealth launch of its Advanced Voice solution. At its November 2015 earnings call, it was already sharing 30 early customers and its intention to provide a complete solution that would democratize access to call center capabilities. The company has also integrations with best of breed contact center providers to serve upper-end segments.

The offer was since renamed Talk and lives up to the company “beautifully simple promise. I felt ready to configure the product after watching the 30 minutes online training session. Talk is built on Twilio but, more importantly, as a seamless extension of Support, the company customer service and ticketing application. It is easy to deploy: the rollout at 99 design, a marketplace with offices in four continents took only two days. 

The product is also easy to manage. It is not uncommon to have Zendesk being used without a dedicated administrator. When doing my research for this article, I found over 2,500 Salesforce Administrator jobs available on Indeed.com but only 75 for Zendesk, way lower than what the relative revenues of the two companies would have suggested. 

The product simplicity makes the product appealing to customer support organizations that have been relying so far on just a PBX for telephony and are foreign to the sophistication of call centers and ACDs. It eventually enables its adoption beyond pure call center departments like at the Tennessee Department of Labor and Workforce Development.

Despite investors asking Zendesk for a timeline for its new products to cross the 10% of revenue mark, the company hasn’t disclosed the breakdown of its sales. Its website lists many references using Talk, suggesting good traction with small and midsize businesses (SMB). It also maintains a pretty active roadmap.

A broad footprint

If you take a step back and look at the entire Zendesk product suite, it actually covers a large footprint that goes beyond the combination of customer support and call center software:

Zendesk go-to-market has probably prevented the appreciation of the breadth of its offering. Many of its product additions were made while the company needed to show investors how it can grow revenues to $1B. It backed its aspirations with plans to move upmarket and add new products. When Zendesk rebranded itself in 2016, it placed a strong emphasis on individual product lines:

Going deep or going broad?

If we put aside chat, a market that Zendesk entered directly with the acquisition Zopim, the company has had a “flanking” approach to penetrate adjacencies. It was one of the first vendors adding machine learning capabilities to its suite when it introduced its Satisfaction Prediction application in 2015. It was also the first to bring weave customer service capabilities into IoT devices. However, the company needs to go deeper to participate in these segments beyond extending its core Support product.In the SMB market, Talk has shown the appetite for a combined CRM and Contact Center solution. It has been mostly sold to the Support installed base. Zendesk needs to expand its feature set to be successful with greenfield opportunities looking for omnichannel solutions.

As it moves upmarket, Zendesk will have to find a balanced path between these two opportunities. It will hinge on its ability to sharpen its focus in terms of market categories and the type of businesses it wants to serve.

Zendesk has become a important participant to watch in the customer interaction management space. Its moves have already triggered a deeper rapprochement between the CRM and Call Center markets. The company has also showed its ability to disrupt markets either with innovative offers that transcend existing categories or by simplifying existing ones.


Let’s block ads! (Why?)

Powered by WPeMatico


About Author


(0) Readers Comments

Leave a Reply