Awhile back, I wrote about the SaaS help desk company Zendesk and their “crazy girlfriend sales tactics.” Not only was the article a hit, but it prompted a very good response from Zendesk itself. As a result, I posted a fair-is-fair retraction and basically endorsed the company. Now it looks like I have to post a retraction.
Gone is my playful attitude. Gone are my good feelings about what could’ve remained a great “business companion”. What did I like and what went so suddenly and terribly wrong? Glad you asked.
Zendesk is quite good, despite a few limitations. It’s simple and straightforward. I speak only about the ticket tracking aspect as that is all I need. The web interface is pleasingly simple and the system itself is reasonably fast. The technical support (and even general PR responses) have been beyond stellar.
The UI still needs some work. Zendesk mentions iPhone (and by extension, iPad) compatibility and that’s largely true. However, like a Flash-based solution, Zendesk uses some mouse-over UI actions (such as hovering to preview a ticket, menu access, etc.) which provides for an awkward user experience on a touch-based device that has no concept of “hover” or “mouse-over”.
As I painstakingly detailed, Zendesk had some problems with how it approached the conversion of trial customers to paying customers. I damn near told them to fuck off on that alone. As I just mentioned above, however, their response to this made up for the annoyance.
On May 18th, 2010, Zendesk announced (in a very complicated set of pages and an e-mail) their pricing would change. The customer responses in the comments of one such page weren’t just a groaning over a minor increase, they painted a picture of outrage, disgust, and (above all else) level-headed descriptions of how they might be able to justify a 10-15% inrease in the current economic downturn, but certainly not what can be up to a 300% increase in cost. Some even suggest reasonable pricing or an a la carté pricing scheme. See “What People Are Saying” below for a sampling of these comments.
What’s so wrong? There’s not too much added – certainly not enough to justify what can be up to a 300% price increase.
Zendesk offered a “grandfather” plan for existing customers at quarterly and yearly intervals. Unfortunately, this up-front payment only extends the current pricing for the duration of your pre-paid term. After that, even existing customers will have to pay the New and Improved Price.
On top of the massive increase in cost, the unpredictability of the cost of the service is not easily dismissed for any reasonable business owner or CTO. While the “Starter” plan they will offer still remains cheap – and, to be fair, still gives me what I need – there’s no guarantee they won’t pull the same dramatic increase stunt they did with their other plans.
Couple this unpredictability with their removing technical support (“community support” is “no support from us”, guys, let’s be real) and the ability to export your data from the Starter plan and the prospect of remaining a customer of theirs would be borderline stupidity.
What People Are Saying
The following comments were pulled from the page mentioned above in case they “disappeared”.
More than double what we’re paying or lose email support? Yeah, no thanks. We’ll begin the process of moving away from Zendesk today.
Please tell me there’s a typo somewhere here. My annual fee for Zendesk is going from $2124 to $4956?! I used “cost savings” as justification for moving to Zendesk with my upper management. That just went out the door.
I wish I could increase my prices 300% but I would have a mass exodus from my product! I think ZenDesk may have just made a huge mistake and I am sure many of their clients feel they are held hostage!
Why not just charge on an À la carte basis for new features that only a subsection of users will even be interested in?
One question for the Zendesk CEO or CFO – would you use a company who didn’t have a stable price plan you could predict, with price increases in line with RPI?
I’m just trying to wait it out before I have to break the news to my boss. All of our departmental spending is being scrutinized, and I don’t know that this increase will make it past Finance.
The fact that I have to even spend time think about this now after spending precious time integrating ZenDesk and educating staff makes me even more angry at ZenDesk. Booooh! ZenDesk, Booooh!
A reasonable increase in price for a additional in features is certainly to be understood or even expected. More than doubling the price I pay currently pay is not reasonable by any definition. As many others have pointed out, the ‘grandfather’ clause is merely a stay of execution.
If a business has no reasonable expectation or ability to forecast costs, a premises based solution will be the only way to go. Especially when you consider the fact that all our historical customer project data is housed with Zendesk and that their cancellation page says that it will all be deleted immediately and permanently upon cancellation.
…when using SaaS services, you expect stability and fair pricing. This is extortion and we WILL cancel our service and move elsewhere if required.
Come on be serious, this is extortionate.
I’m sorry Zendesk, but this is not how to treat your customers. A 10% increase or something would have been ok and I guess no one would be complaining. But this is really too much.
… and it goes on. Techcrunch also posted an article.
Zendesk has shown a lack of respect for its customers and their budgets. Some speculate they’ve planned to gain x number of customers, have the high-end customers invest hours and money in customizing and integrating the system, increase the price (and drop “low-end” customers) and show an overall increase in profits. I have to say that’s not a bad theory at all. I think I share it.
As I explained to “Olivia” (as I called her in previous posts), I feel threatened by this as a business owner. My information may no longer be mine to take with me if I decide to leave. I may have to face similar decisions even with the minimum plan if Zendesk suddenly decides their minimum pricing should be equally outrageous and they should even it out.
The bottom line is, I’m afraid I can’t endorse Zendesk any longer. Lack of predictability, no official support at an affordable price plan, and information lock-in add up to a big steaming pile of shit for $30/month. I’ll pass, thanks. Had I known then what I know now, I would never have signed up.
Update (May 20)
This has unfolded into an outright saga. CEO Mikkel Svane had some things to say on Twitter that didn’t exactly smooth things over:
I hope all the new sexy Zendesk features don’t drown in today’s noise.
Leaving office with headache. Not happy about pricing reactions. Less happy that it overshadows what an awesome system Zendesk has become.
While the second comment drew some fire (“the headache is of your own making” and similar sentiments), it was the first comment that really riled up Zendesk’s customers. Many were none too happy at their valid and reasonable complaints (many of which agree on a better approach at tiered pricing – more on that in a moment) having been blithely dismissed as “noise.” Some on Twitter have repeated, more or less, the same idea: “How Not to Treat Your Customers” or “How Not to Roll Out Price Increases.” Even Zendesk competitors are weighing in, offering price-matching and rate lock-in.
Of the many voices expressing outrage (and the few churlish pokes), a growing number of users actually suggested what I feel is a fair compromise. They would accept a fairly substantial price increase in return for tiered pricing. That is, the “exciting new features” (such as a basic implementation of forum software, which users point out is not as feature-rich as the many free, open-source alternatives available today) should be optional, as should the knowledge base features. The more services you use, the higher the pricing. Some even suggested they’d pay more for heavier volume.
I propose a mix of both. I personally only need the ticket tracking portion. For up to two people. For not too many tickets per month. I’d rather pay only for that, and if I decide later I need other features or if I suddenly start processing hundreds of tickets a month, I would expect to pay more.
For now, it looks like the company is in damage control mode (taking surveys, saying little). I now have a strong feeling the shareholders are behind this decision (‘pump-n-dump’ perhaps, or just outright cluelessness). True or not, I think there’s a whole lot of reconsideration going on right now. Either way, my faith in Zendesk has been severely shaken. I’m still planning to move to another service (and to take advantage of the sudden flurry of competition).