Subscription Pricing & Product Innovation No Longer Taxing on Engineering

Zendesk's product pricing innovation no longer taxing on engineering

Zendesk has the admirable goal of making the customer service process less of a headache. The  cloud-based customer service software system lets you centralize all of your customer encounters in one place. For a monthly subscription fee, the company provides a helpdesk for customers who want to deliver stellar customer service very quickly.

Turns out, plenty of businesses suffer similar pains when it comes to customer service. In fact, in the last year Zendesk grew from about 5,000 customers to more than 10,000 in 2011. Logically, Zendesk wanted to keep introducing new plans and upgrade options to its growing customer base, but experienced some unexpected growing pains.

The company’s homegrown billing system wasn’t up to the expansions, upgrades, and downgrades of Zendesk’s customer base. The Zendesk finance department would always be tied up and looking at invoices, and re-updating information.

The homegrown billing system not only made maintaining existing customers difficult, but new products nearly impossible. Any time the company sought to introduce new features of products, they’d need to pull its engineering team to help with the process-- a major drain on resources, costing the company valuable time they could have been spent on working on innovative features for their customers.

Finally, Zendesk’s metrics needed a simpler, all-encompassing system. Zendesk needed to understand how many customers were coming in, how many trials were ongoing, and then measure the average contract value, the monthly recurring revenues, churn rate, etc.

The people at Zendesk realized that sooner or later they would have to use a third-party billing system and “didn’t want to mess around with some second-tier offering,” explains Chief Operating Officer Zack Urlocker. They felt that Zuora had the experience in the industry and several top-name customers to give them credibility.

Now, with Zuora handling Zendesk’s billing, the company has the flexibility to innovate with their marketing, pricing, and promotions without being held captive by its billing system. Zuora has become their system of record and now, Zendesk has the benefit of always seeing all of the details of any particular transaction. This has made the finance department very happy.

In addition to focusing on improving the customer service process easier for everyone, Zendesk has focused on using 100 percent cloud-based software in their company where they can.  So they use Salesforce as their CRM system and now are using Zuora on the billing side. Zendesk has been exceptionally satisfied with Zuora’s billing platform, saving their subscription business many headaches, their finance team much work, and their engineering team from being bothered by new products or upgrades. Not only has Zuora made Zendesk’s billing a breeze, but the company can focus properly on innovating new features and products for its rapidly-expanding customer base.

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