Zendesk: Goodwill in a Business Model

A bunch of new stuff with Zendesk, the SaaS helpdesk we use as our online help system, this past Monday the 17th. In addition to some new features, a redesigned website, and $6 million in new VC cash, Zendesk debuted a new pricing scheme. To sum it up in their words, "Previously you had to allocate agents in lumps. That's history."

Zendesk's former pricing gave you access to the first support agent for free, and after that charged $19 per agent; however, agent access couldn't be purchased per-agent, but rather in bunches of 3, 5, 10, and so on. So, if you had, say, 6 agents, that bumped you up past the "5" bracket and into the next higher-priced bracket... for 6 agents, therefore, you paid for 4 agents you didn't have.

Their new pricing scheme is much simpler: if you're a one-man operation, you pay $9 a month. If you're bigger, $39 gets you three agents, and each additional agent after that runs you $19 apiece. There's also a more expensive, premium version with extra reporting, support, and SSL certificate hosting.

Since Zendesk now runs on per-agent pricing, Populi pays less than it used to for what is now (in light of the software enhancements) a better program. A few interesting things about that: first, in terms of customer relations, the Populi office is absolutely aglow with praise for Zendesk. We were already pleased with it (and we trust our customers also find it an easy and helpful way to get answers), and plenty happy to pay what we were paying for the service. Now they've improved the program and ding us for less money than they used to. What's  more, they didn't have to do this. The old way was working. However, they saw that it could be done better.

In one sense, a price cut probably means that their income will decrease... but only for a time. In light of the tremendous buzz the new plan has generated (and the news about the VC money helps), that price cut looks more and more like a smart, gratuitous, multilateral PR and customer relations investment. Lest that sound at all cynical, it might be better to say that this shows how Zendesk is using goodwill in their business model.