If it weren’t for unhappy customers, San Francisco’s Zendesk wouldn’t be in business. After all, the company makes Web-based help desk software that’s used by thousands of companies to track, and ideally resolve, complaints submitted by their users. But Zendesk probably didn’t think that a plan to impose steep price increases, announced more than two months ago, would make quite so many of its own customers unhappy.
The ensuing revolt was splashed across the pages of TechCrunch and Hacker News and threatened to blossom into mass defections. When small Web startups accustomed to paying $99 a month for Zendesk’s service realized they’d now be paying $295 per month or more, the noise on the pages of Zendesk’s own support forum was deafening, with many users vowing to switch to competitors like Kayako or Tender. The crisis of May 18 was only quelled when Zendesk CEO Mikkel Svane announced two days later that there would be no price increases for existing Zendesk customers—ever.
The company had at first offered to grandfather existing customers into the old prices for one year, but many forum commenters rejected this as a mere delay of an unacceptable price hike. The infinite extension, which came as part of an unvarnished mea culpa post from Svane, seemed to appease most critics. “Thanks for hearing us out,” responded one Zendesk user from Atlanta, GA-based Paper Tiger. “Making mistakes is part of doing business, but it’s what you do to fix them that shows you what you’re made of.”
The repricing episode was an uncharacteristic gaffe for Zendesk, where the “love your customer” mantra is so strong that there’s a little heart at the center of the company’s logo. “If we have one core strength it is to be in absolutely fanatical love with our customers,” says Maksim Ovsyannikov, Zendesk’s vice president of product management, who hosted me for an interview last week. “And all of the organizations that come to Zendesk have this one thing in common, that they want to be in love with their customers.”
Exactly how Zendesk missed the mark with its pricing changes is a matter Svane addressed in his blog post. In the same e-mail where it had laid out the price increases, the company had introduced new community support and knowledge base features, and it had assumed, Svane said, that customers would see these as such an improvement that they’d be happy to pay extra. “Instead of our intended result,” he wrote, “many of you read my Tuesday e-mail and thought ‘You want to send me a big bill for something that I didn’t order and haven’t agreed to? WTF?'”
But when I visited Zendesk at its Townsend Street headquarters—its third location, after starting up in Copenhagen in 2007 and then spending a brief six months in Boston in 2009—I was less interested in how it managed the price-change fiasco than in why its customers cared enough to get upset in the first place. Somehow, the 55-employee startup has managed to make the unsexiest of product categories—trouble ticket management systems—into a topic that can get product managers, Web developers, angel investors, and venture capitalists all het up.
Zendesk isn’t the only company experimenting with fresh approaches to the age-old problem of customer support. San Francisco-based Get Satisfaction, for example, has attracted attention for
