Businessmodel of Zendesk

Customer Segments

Zendesk targets customers from a wide variety of businesses, ranging from tiny startups to multinational corporations. As every business needs some level of customer support, every business is a potential customer.

The range of Zendesk’s customer groups are defined by price, and the service delivered for such price. This enables customers to only pay what is necessary for the efficient running of their business and no more.

Value Proposition

Zendesk aims to make customer service easier and more efficient. The unique customer service software is designed to open up conversations between businesses and their customers, bringing them closer together. Zendesk unifies various methods of communication, and streamlines their uses, ultimately making the customer service platform simpler and more intuitive.

The product allows for companies to completely customize their software, strengthening their brand and reflecting individual businesses’ values. Zendesk has introduced innovative tools to help companies understand their customers’ needs, for example the introduction of the Net Promoter Score survey, and the Zendesk Benchmark, that allows businesses to compare their performance to others in a similar field. The software is also compatible with hundreds of well-established apps, allowing businesses to integrate their favorite tools into Zendesk. Innovation is key and so Zendesk frequently adds new services and features weekly, which are announced on its website.

Zendesk has a well-defined, visually pleasing brand that was developed with long-term customer satisfaction in mind. A strong focus is made on customer evangelism, in which loyal customers are identified, nurtured and then encouraged to stimulate conversations. Strong content marketing and a well-designed website ensure that customers are quickly engaged with Zendesk at the first point of contact. Zendesk has quickly received a reputation as one of the premier SaaS (Software-at-a-Service) companies, especially for a customer service platform, and as a brilliant example of a bootstrapped startup.

Channels

Zendesk uses one primary sales channel, which is its website. Via the website clients can purchase and upgrade various software packages. Direct sales support is also available.

Zendesk is marketed through numerous means including television adverts, print adverts, its website and social media platforms. Though the marketing team focus strongly on creating conversations between customers and providing positive customer experiences.

Customer Relationships

As a software company dedicated to improving customer service experiences and strengthening the bonds between consumer and provider through communication, Zendesk strongly focuses on creating strong customer relationships.

Consistent support for clients, a clear and easy-to-use website, and comprehensive knowledgebase ensure that customers are rarely dissatisfied. An online community exists with open forums, frequently asked questions, product feedback channels, user-groups and discussions.

Technical support is available for the migration of data and in tailoring the Zendesk design for a more personalized customer experience.

Key Activities

Zendesk focuses on developing and providing software, tailored as a customer service platform. Due to the online nature of the product, manufacturing is not necessary, though continued support is available.

Key Partners

Zendesk relies on numerous partners to help guide and enhance clients’ Zendesk experience. Implementation of complex software can be difficult and so third-party businesses offer support.

Key Resources

Zendesk’s main resources are its Research and Development team, dedicated to improving current facilities and innovating new software, and Zendesk’s marketing efforts.

Providing a non-physical product, Zendesk has to focus on innovation, service, support and marketing.

Cost Structure

Zendesk has a value-driven cost structure, offering different degrees of the product for varying prices. The most restricted version of the product is the most affordable, and the most comprehensive version of the product is the most expensive.

Major cost drivers include research, development, marketing and administration.

Revenue Streams

Zendesk’s main revenue stream is generated from the subscription revenue and licensing fees of its software.

Revenue was $208.8 million for the year ending December 31st, 2015. An increase of 64% over the prior year.