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June 21, 2012

Social CRM is a must: Q&A with Zendesk CEO

CBR talked to Mikkel Svane, CEO of Zendesk at LeWeb'12 in London to talk about the future of Social CRM.

By Tineka Smith

Zendesk is a provider of cloud-based helpdesk software for growing organizations to help them provide better customer service. More than 15,000 Zendesk customers, including Adobe, Sony, OpenTable and Groupon use the cloudbased helpdesk software. Zendesk is funded by Charles River Ventures, Benchmark Capital and Matrix Partners.

CEO of Zendesk
Mikkel Svane, CEO of Zendesk

What is Zendesk’s specialisation?

We offer the market a tool for helping companies provide better customer care. Alongside having an email service operation or a call centre operation, businesses need to be able to deal with customers on Facebook, Twitter and so on, as well as managing customers in the same workflow.

Tell me a bit about Zendesk’s background…

Zendesk is originally a Danish company I started in 2007. We were in Copenhagen from 2007 to 2009 and moved the company to San Francisco in 2009, and raised $26m. Today we are 250 people all together. Our European operations have around 40 people and we have 25 people here in London – the UK is our second largest market. We have 5,000 customers in Europe and more than 15,000 customers worldwide. It’s a fast growing business.

What are some of the benefits that Social CRM offers companies?

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We came to the market with a tool for helping companies provide better customer care, I think today that means communicating and engaging with your customers on channels where they are, where they have their life and where they communicate. So for companies that means they need to extend their customer care operations to cover social channels.

Do you think the enterprise aspect of social media will remain solid?

My nephew and niece are teenagers and when they communicate with me they don’t send me an email or call me on the phone, they send me a message on Facebook or they start following me on Twitter. That’s how the new generation is communicating; they’re using these social channels as their medium; that’s the way for them to engage. Enterprises have to communicate with customers the way they want to be communicated with and that includes social media channels.

Do you notice any differences in social media use in Silicon Valley compared to Europe?

First and foremost Twitter is still a lot bigger in the U.S than it is here in Europe. In Silicon Valley, the social presence and the various ways we embrace social channels in our day to day routines is much more natural. It’s much more saturated in the culture there than you see elsewhere, but I think that’s mainly because it’s a first mover society.

How can businesses use social CRM to specifically measure their return on investment (ROI)?

The economy is very much changing. Businesses used to count their revenue on how much it can sell to you right now. More businesses are now turning into subscriptions businesses, within a subscription economy; meaning it’s the long term engagement with a customer that matters. It is better to get someone to pay $10 each month than it is for them to pay $100 right now. That kind of long term perspective on the business relationship – and on your revenue stream – changes how you engage with customers. Long term relationships support the subscription economy very well.

Isn’t that ROI hard to measure? What are some signals companies should look for?

Businesses have to rethink their businesses model so it is better suited for the subscription economy. They need to be able to sell products that have a long term perspective, rather than just focusing on the short term. In that regard, it becomes easy to say that you are reducing your churn and increasing your retention when its something that you can see on your bottom line. Lowering churn is something that is directly driven by your customer relationships and your social media relationships.

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