Analyst Perspectives

Zendesk held its customer conference – Relate – along with a session for industry analysts in May. Zendesk develops software primarily for customer service and support and automating aspects of the sales process through customer relationship management. The conference presented an opportunity for Zendesk to showcase several new technology developments that it hopes will solidify its position in the customer experience marketplace.

As is now common throughout the industry, Zendesk is leaning heavily on artificial intelligence as a component of its platform, one that enables several important service-related use cases. Unveiled at the conference, Zendesk AI provides pre-built and pre-trained bots for messaging and email – the primary AI entry point for many contact centers. Zendesk’s new AI tool adds agent assistance to the mix, with AI-generated content providing proper context to potentially speed interactions to resolution. The company also expects organizations to use Zendesk AI for “intelligent triage” – automatically detecting customer intent and sentiment to classify incoming requests and direct those interactions towards specific, context-appropriate workflows. It is possible that this will improve overall productivity by allowing organizations to move first-tier (i.e., “triage”) agents into more complex roles that require expanded skills and interaction-handling expertise.

The company’s two key products are Zendesk for service and Zendesk for sales. The service product includes a unified agent workspace, support for multiple communications channels and self-service options that, even prior to this announcement, incorporated AI and bots. Zendesk Sell includes features for contract and deal management, activity tracking and lead generation. The overall suite includes a full set of operational components: case tracking; messaging across multiple digital channels and voice; knowledge management; agent management, tracking and assist; and advanced workflow design to automate as much of the service process as possible.

Zendesk also announced a set of features called Conversational Commerce. These tools help agents identify revenue opportunities and customer preferences based on past histories. Agents can also work directly with abandoned or active online shopping carts. Zendesk’s commerce focus is also evident in expanded partnerships with Meta’s WhatsApp and Shopify to incorporate transaction processing features into messaging tools.

According to Zendesk’s executives, being able to insert intelligence directly into the messaging process enables organizations to measure the success of messaging tools as well as the return those tools provide. Metrics like the impact on cart value, completion rates and average revenue per customer determine success in messaging interactions.

This event also marked the formal ascension of Tom Eggemeier to the role of CEO after six months of interim service. Eggemeier comes to this position after a stint at private equity firm Permira, which has stakes in both Zendesk and Genesys (Eggemeier’s previous employer). This suggests the opportunity for the two companies to build technology or marketing partnerships down the road, though there has been no overt mention of plans in that direction.

Zendesk is well positioned in the small and midsize business space but finding that economic headwinds are holding some firms back from investing in new technologies. The company indicated that it is seeing traction in the medium-sized organizations and is continuing to try to move upmarket into enterprises. The features in the new Conversational Commerce offering are part of the effort to focus on use cases and vertical markets that bring more large enterprises into Zendesk's orbit.

One of the most pressing goals in customer experience is to help businesses pivot from the traditional reactive stance common in service centers to a more proactive attitude. To build customer loyalty and value, organizations must anticipate customer needs and orchestrate optimized interactions to take advantage of those needs. To that end, platforms like Zendesk’s are increasingly aiming to solve more complex customer queries, using a more entwined combination of live agents and automated intelligence. The steps Zendesk has articulated indicate awareness of the marketplace’s shifts.

We assert that by 2025, 7 in 10 customer interactions will be a combination of automated conversational self-service and live agents, reducing costs and enabling agents to pivot from triage mode to managing higher-value interactions and high-value customers. Within short order, it will be standard practice to deploy AI-based knowledge resources for a dual use case: real-time agent guidance and cost-reduction via deflection. Organizations are exploring the use of self-service tools for upselling and cross-selling, loyalty building, problem management, transaction processing, surveys and voice of the customer feedback.

The recently announced tools are part of the ongoing development of Zendesk’s Sunshine platform, an underlying foundation for users and developers to add applications for specific niche business problems. It provides a common framework for low-code customizations and setting up complex workflows across CX processes. CX application suites built on a common platform are becoming the focal point of the effort to optimize customer engagement. By putting complex enablers like AI and automation tools at the base of the tech stack, they’re becoming available to a wide range of applications, thereby enhancing the value of the suites.

We recommend that organizations explore Zendesk to expand use of automation for self-service, commerce and agent engagement.

Regards,

Keith Dawson