Wednesday, May 19, 2010

How not to run a SaaS: Zendesk

Zendesk CEO Noise CommentI got an email from Zendesk in the middle of the night and this blog post, breathlessly announcing "new features!" and along with that, new pricing. I and many other users could probably have dealt with an x% increase, but a doubling? It was even worse for people on other plans, as well, and that means a lot of upset users. CEO Mikkel Svane's patronizing attitude is not helping matters either (see the screen shot of his arrogant tweet in this post).

Down to brass tacks: we have 8 agents on the Plus+ plan and are paying the equivalent of 27 USD / agent per month. The new announced pricing puts it at 59 USD / agent per month. Users are being given an "opportunity" to lock their existing pricing in, by paying annually for a 15% discount, and it appears that the limit to this is one year. So, we take the hit up front by paying up front, and we take another hit later anyway. Sounds like a plan, Zendesk.

This is a one-sided, sneaky and very much not transparent decision on pricing by Zendesk, which I suspect is being driven by chop-licking investors. Who can trust Zendesk now that they have shown how they will treat customers. If we take the offer being dangled, who knows what will happen after their next round of investment.

Unacceptable way to run any business, and a slap in the face. I hope Zendesk will respond in a positive way, instead of burying their collective head under the sand.

Updates

20 May 2010 - no proper response from Zendesk as of this AM. Zendesk users still angrily commenting (of course). 21 May 2010 - an email in from Mikkel Svane, Zendesk CEO, recanted and apologized for the mistake, as well as grandfathering existing customer prices in forever. That was nice of him, and appreciated.

2 comments:

ilandsman said...

Hi Rick,

My company makes a competing product called HelpSpot. We've raised license costs once in 5 years and it was a 10% increase. We've never raised support costs. I don't really see how in this economy you can double or triple prices on customers.

If you're considering a new solution please give us a look: http://www.helpspot.com . We've also put together a price comparison page just as an FYI http://www.helpspot.com/helpspot-vs-zendesk/.

Rick Cogley said...

Thanks, ilandsman. No positive response from zendesk as of yet. I may contact you.

Regards,
Rick