Zendesk CEO Mikkel Svane: Complaints Are Good for BusinessOctober 18, 2011
by Lydia Dishman
Mikkel Svane of Zendesk explains how he grew his cloud-based help desk software startup in the wake of customer complaints. “The best thing a company can do,” he tells us, “is embrace its mistakes.” You listening, Netflix?
Right now, Mikkel Svane is sitting at the helm of an incredibly successful company. Zendesk, established in 2007, is a cloud-based help desk software company with over 10,000 clients in 100 countries ranging from Animoto and IKEA, to the Denver Broncos and Zappos. To serve 30 million end users every day (and counting!) Zendesk recently added an office in Australia and a development center in Denmark.
Part of the reason for the success is that the technology speaks for itself. For instance, Yammer came to Zendesk because the software has built-in, two-way integration with leading CRM systems. The other part is that Zendesk’s core values of authenticity, transparency, “customer enlightenment and help desk bliss,” align with those in their own business’ DNA, says Svane.
He may make leading a thriving startup look like a cakewalk—but it isn’t. And not just because growing a business during a global recession is challenging. Last year the company Svane built to handle customer complaints found itself on the receiving end of a cacophony of bitter criticism from its own clients.
Zendesk launched a series of new features and changed its cost structure last May and alerted its customers via its blog and email. The response was immediate outrage. Comments on the Zendesk blog ranged from, “An increase of 74%? Seriously??!!!” to, “This seems extortionate, we are facing a 100%+ increase, what are you playing at Zendesk.”
Svane tells Fast Company that in hindsight, he can see why they were upset. “The problem wasn’t as much in the pricing and plans, the problem was for the customers it was all too complicated and they lost confidence in us.” (Sound familiar?)
Admitting the emails Zendesk sent out to customers were full of “mumbo jumbo,” was for Svane the first step to fixing the problem. However, the company did not respond to individual complaints immediately and Svane even took heat for tweeting, “I hope all the new sexy Zendesk features don’t drown in today’s noise.”
He attributed the (brief) delay in addressing customer complaints to “a period of shock, like after an accident.” Zendesk experienced an organizational shock to the system that Svane says they couldn’t have predicted at the time–though now it’s very clear. He did say, “It took a while to decide how to deal and to get everyone to agree on the best solution. After that, we were very proactive in reaching out and explaining. We owned the issue and the problem.”
The bright spot in all this was that Zendesk’s software was put to the ultimate test. And it passed with flying colors, according to Svane. “We did not develop any new technology,” he explains, but inbound traffic was managed very well. Tagging and categorizing statements and putting together timelines for customers to expect more communication is all part of Zendesk’s offering. Says Svane, “We’ve always been our own customer. We have a great system for dealing with events like this, and I hope we succeeded.”
He’s quick to point out that this was not an exercise to weed out certain customers. Rather, Svane says the change was a better offering for the most price sensitive part of the market—the small business. “Large organizations require a different level of interaction; it’s less visible but it costs more.”
For clients such as Groupon and Airbnb who have used Zendesk from the beginning, Svane says the tools are built to scale operations from bootstrapping startup to multi-million dollar company. “You’re not building a successful biz unless you are dealing with customer complaints,” says Svane, “Success is not defined by the ability to have no complaints, it is defined by ability to deal with them.”
Svane admits he’s relieved to have the pricing imbroglio in the rear view mirror so he can continue to focus on pursuing his passion of building really great products. “Ultimately, we want to make everybody at any company capable of providing great customer service without complexities, at little cost, and with whatever application is closest.”
Still he says, “Building a business, especially at this pace, you are making mistakes all the time. The best thing a company can do is embrace its mistakes.”