Adrian McDermott, President of Product for Zendesk, shares insights into Zendesk’s developments over the last one year.
From an overall CRM growth point of view, how was the calendar year 2018 from a global and India market perspective?
When it comes to the growth of the overall CRM industry, we are seeing a couple of key trends that are shaping the industry. One of those is the movement to the cloud. However, there are still many legacy CRM systems that are on premise, and are likely to continue for a while. Secondly, there are several companies that are engaged in conventional CRM but are, in reality, contact centres providing more of point-solutions that help deal with customer enquiries. They are not really unified CRM solutions in the true spirit, and such companies continue to transition to a more central CRM record. These changes, coupled with the move to the cloud, also reflects today’s tectonic shift towards SaaS technologies.
Another notable trend is the move to the public cloud and the accelerating pace of digital transformation that we are witnessing across industries today. Companies are increasingly shifting from traditional ways of doing business to more modern platforms and processes. This momentum for digital transformation, be it in the retail sector or the finance sector, or simply any sector including government, is reaching consumers, employees and citizens in new and engaging ways. And the momentum is steadily on the rise.
All this change is driven by the change in consumer expectations, who are now spoiled for choice. Today we can book a car within seconds from our smartphones, get food within minutes from a choice of cuisines, and so we become attuned to the transparent and immediate service that we begin to expect and trust.
Therefore, businesses need to become trustworthy, transparent and prompt, and put customer experience at the centre of their strategies to help meet those rising expectations. As a fallout, companies are increasingly having to up their CRM game while building richer and better solutions.
How was Zendesk’s performance for this calendar year, from a global as well as India perspective?
Year on year, Zendesk is still maintaining approximately 40% growth, with India in our top 10 fastest growing countries.
We are seeing tremendous growth in India, particularly as a result of the digital economy and the government’s exciting initiatives that support this. A large percentage of people across the country’s 1.3 billion population are now members of the digital economy, and have greater access to the internet and mobile communications.
As a result, consumers are more willing to embrace technology in the new economy, and I think that is in turn helping drive business for Zendesk. We love to work with growing businesses, and India is a hotbed for incredible innovation. Interestingly, we not only work with new age companies in India, but are also partnering with traditional businesses that on the path towards digital transformation.
What activities have differentiated you from competition and helped you to increase market share?
For us, simplicity is at the core of how we think about our products. Zendesk has always prided itself on delivering simple to use, easy to implement, elegant interfaces for our customers at a reasonable cost. We try to make the whole experience of buying our product and working with us enjoyable. We also aim to be as transparent and trustworthy as possible.
We believe complex and difficult customer interactions can be handled with elegance and simplicity. As a part of that endeavour, we are investing heavily in technology that helps build the AI experience and the self-service experience of our products.
How was channel growth for Zendesk? What channel programs you have rolled out this year?
We work with channel partners across the globe, and we think about channel partners in different categories. We work with our technology partners to enable richer experiences for our customers, and there is so much innovation in this space and continues to be a key focus for us.
Zendesk is also beginning to work with larger and larger system integrators, business process outsourcers and resellers to allow our customers to drive the experience that they visualize in different ways.
We also have a Talk CTI partner program with over 30 CTI vendors coming together, and we allow them to leverage Zendesk ticketing to provide the richest possible experience for their customers. This provides them the opportunity for not just the voice offering but the support of a world class ticketing, self-service and knowledge experience.
How was your customer acquisition growth? What were the customer engagement programs of the year and what was the outcome?
We have two primary means of customer acquisition. When I started with Zendesk many years ago, we had no salespeople and customers would just discover Zendesk on the web or by seeing other people who were using Zendesk. They would initially subscribe for a trial period to experience the product and if they liked it would end up buying it. That is how the company grew to acquire its first 1,000 customers by building an internet brand based on our early customers who were sharing their good experiences with other customers and by building on aspirational experiences.
We still believe organic means of discovering customers is an incredibly important source of business and continues to drive our revenue. In fact, many companies are out there searching and trying to find better customer solutions and when they see other companies use our products it prompts them to sign up for Zendesk solutions.
At the same time, there are several large companies who are looking for a high touch experience and want to be guided through the process in a more personalised manner. This is what we define as the enterprise segment which are typically larger businesses. One of the strategic directions we set out following our IPO in 2014, was to develop the enterprise capabilities of Zendesk to support such larger organisations. This is a deliberate approach to work with larger, often traditional, businesses and brands to meet their expectations for a more targeted and personalised customer support experience.
Which are the verticals that have embraced your solutions maximum and why?
The vertical that remains the fastest growing are the digital-native disruptive businesses. It could be a food delivery brand or a transportation brand or an accommodation brand, and these businesses all over the globe turn to Zendesk. Digital native disruptor-type businesses is where we got our start and these businesses are very dear to our heart.
Name some of the best customers and why those were best?
We today have over 125,000 paid customers around the world. In India, we are proud to be working with leading digital brands like Ola, Foodpanda, 1MG, VFS Global Visa Services, OLX, Vodafone, etc. We also work with traditional brands in the US, where you can see us in the NFL app or find us working online with Airbnb, and other ride sharing companies around the world. Similarly, you can see us in the very first traditional utility business in the UK. We are fortunate that we are in so many verticals and in so many countries around the globe.
In fact, because of the global perspective and demands, over 50% of our engineering team is based outside of the United States today. At Zendesk, we are sensitive to the differences in each market and towards the needs of diverse customers from around the world.
Point out some of CIO challenges in 2018 from the CRM point of view? What was the experience of Zendesk in mitigating those challenges?
I think most CIOs today came face to face with an examination of their privacy policies with respect to data. The hard deadline to support the GDPR regulation for European citizens really caused technologists and CIOs around the globe to look at how they should be handling user data. In fact, the next big security breach is only a news report away, as the saying goes. We are all becoming attuned to a level of hostility and sophistication that is out there in the networks, with cases of spoofing and nefarious activities.
I think it was visceral and real, and CIOs were given a hard deadline to deal with how to manage user data this year. CIOs were made to stand up to the test while documenting their actions. This gave an opportunity for a lot of CIOs to take a hard look at their data, where they were storing it, and how they handled the information.
We handle so many businesses across the web and a key goal for us is to maintain the trust of our users by meeting regulations on time, while also enabling tools that meet their needs. Zendesk’s General Council, Hasani Caraway, hosted a webinar on GDPR compliance during this period, which at that time was very much in demand and was one of the best events I attended on the topic this year.
Name some of the best performing partners and why they were so good?
We have been fortunate to be able to work with many interesting technology partners over the years. The notable ones include Slack, with who we launched a new integration to leverage their framework, also WhatsApp for business, and also Discord in the gaming community.
I am not saying these were good simply because I am a technologist, but because these technologies and channels reach so many people. They are all revolutionary in their respective segments, and it is amazingly gratifying to plug those key pieces of infrastructure into Zendesk and therein connect another aspect of the way we interact with one another in customer experience.
What products did you roll out in the year, what was the adoption rate of those new products?
Earlier this year, we launched The Zendesk Suite, where we bundled together Guide, Support, Talk and Chat into one unified package for our customers. The adoption following the launch has been tremendous across all markets.
We recently launched Zendesk Sell, a sales force automation (SFA) tool to enhance productivity, processes, and pipeline visibility for sales teams. Sell stems from Zendesk’s acquisition of FutureSimple Inc. in September 2018, and marks the first step in integrating the sales force automation software into the Zendesk family of products.
We also recently announced Sunshine, a platform that is going to prove to be a revolutionary shift in the way people think about CRM. Zendesk Sunshine enables businesses to connect and understand all their customer data, wherever it lives, and gives their developers the ability to build and deploy customer apps and services faster. Sunshine is built entirely on open standards, with the security, scalability and reliability of AWS built into its core.
Finally, we launched Explore, which is a business intelligence product that will help you understand your customers better by leveraging customer data within the Zendesk platform. I think data analysis, understanding customer behaviour and how customers are interacting with a company, are some of the problems that we are solving with our products, and we look forward to investing further in these technologies in the coming year.
What kind of revenue/market share growth you achieved this year?
We recently surpassed the $600 million annual revenue run rate, and are well on track to reach our goal of $1 billion by 2020.
APAC continues to surpass our global growth, at a rate of approximately 40% year-on-year. India is one of our fastest growing markets, where the number of customers are increasing more than 25% year on year. This makes India one of our top 10 markets globally by number of paid customers.