How Zendesk Became The Industry Leader And Hit $1030 Million Revenue In 2020

In just 13 years, Zendesk went from a scrappy Danish startup to the industry leader in Customer Service Software. Today they have:

• 3500+ global employees
• 150,000+ paying customers
• $1030 million in annual recurring revenue (ARR)

In this post, I’m going to show you exactly how Zendesk grew from $0 to $1030 million ARR and how you can use the same marketing principles in your own SaaS business.

Chris Von Wilpert, ex-Sumo for Noah Kagan, loved the analysis:

As did the owner of MailShake, VoilaNorbert, and Rightinbox who shared it… and hired me as his lead content strategist immediately after.

Now before we dig in, first grab my Zendesk marketing swipe file to see three additional marketing tips as well as all the tools that Zendesk uses in its marketing.

Then read on to grow your own SaaS business up and to the right.

TABLE OF CONTENTS

When it comes to growth, people at Zendesk know exactly what they’re doing and are known for their clairvoyant growth predictions. Here’s Mikkel Svane, Zendesk’s CEO, thanking his team in 2020 after reaching a $1B revenue run rate which he predicted back in 2016.

With such competent leadership, it’s no wonder that Zendesk has, in the last 5 years, increased its enterprise value more than twelve-fold: from $1.4B in 2016 to $18.1B in 2021.

But what’s interesting is that even though Zendesk completely dominates its market, it got that way without relying on aggressive marketing tactics.

Rather, with their sprawling blog, Zendesk is a master at nurturing and educating. Their Ahrefs Rank is 167 out of a million, which places them in the top 0.02% of the websites with the strongest backlink profile.

But they’re not chumps at PPC, either. Throughout its history, Zendesk was constantly running strong PPC campaigns. Even today they have more paid keywords than most big-name SaaS startups: including Hubspot, New Relic, Atlassian, and Intercom.

Zendesk has its flaws. But with its mix of PPC, content, pricing, and product strategy, Zendesk is nevertheless the prime example of how any SaaS company should grow.

So if you want to grow your SaaS business up and to the right then read on for a deep dive into 12 marketing tips from Zendesk.

Ready for it?

Let’s go.

Many SaaS companies don’t realize that the biggest growth opportunity is not in customer acquisition or retention, but in price optimization.

In fact, a 1% improvement in price optimization increases your profits, on average, by 11,1%. [*]

Zendesk knows this, that’s why they optimized their pricing down to the teeth. And they tell you that as soon as you land on the product page:

To prove that Zendesk puts a lot of thought into their pricing, let’s check a survey conducted by a SaaS pricing agency, profitwell.com.

Profitwell surveyed 5,211 current, former, and prospective Zendesk customers about how much they’re willing to pay for Zendesk Support — one of the core products.

The curve mirrors Zendesk pricing perfectly:

(In fact, Zendesk could, based on the research, increase the cost of their Essential package to $7.50 without a problem.)

But hyper-optimized pricing is only one reason for Zendesk’s $1000M ARR.

Back when Zendesk was a one-product company, they noticed their ideal customers were underserved in more than just help desk software.

They capitalized on the opportunity by expanding their product line with a Sales CRM software called Zendesk Sell and many add-ons like Guide, Chat, Talk, Explore, and Gather.

I call this Inward Expansion as opposed to Outward Expansion.

In Outward Expansion, your focus is on marketing, customer acquisition, and customer retention…

But in Inward Expansion, you’re increasing the value of your current customers with better customer experience, new products, and add-on upsells.

Why would you do that?

Because in the outward expansion business model, no matter how hard you try, your revenue will plateau.

You see, profit in account-based subscription services (like SaaS) depends on two things:

1. How many customers you have
2. How much money they’re giving you

But keep in mind that a portion of your customer base will leave every month. This is called company’s churn rate.

Since churn is relative, the more customers you have the more you’ll lose. But adding new customers is absolute — each acquisition costs a set amount of money (CAC: customer acquisition cost)…

This means you’ll have to spend more and more money offsetting bigger and bigger churn losses. Sure, you can try to scale your marketing, but even that will eventually collapse.

That’s why Zendesk shifted its focus from getting new customers to increasing the lifetime value (LTV) of existing customers.

To prove my point, this is how much an average Zendesk user was spending on Zendesk products from 2013 to 2020.

(During this time they also increased their customer base from 40k to 160k, so inward expansion is not the only thing you should be doing, of course.)

Zendesk knows that if their customers grow, they grow — because once their customers have a bigger spending budget, they’ll spend more on Zendesk’s services.

“Customers buy trajectories as much as they buy current features. They’re not just buying into the current product — they’re also buying into what the future of that product is going to look like.”
— Sam Boonin, VP of Product @ Zendesk

All Zendesk has to do now is develop useful products and add-ons and the cycle continues.

Before we wrap this chapter, there’s something we need to say about Zendesk’s sales team.

Having a great content strategy and online marketing is the key to successful Outward Expansion…

But marketing by itself can’t close big deals, create tailored solutions, or spot upsell opportunities — everything that’s crucial for Inward Expansion.

For that, you’ll need a sales department.

“At the beginning most of our sales came from our online business. A bunch of people came to our website, they would sign up for the product trial, and they would purchase online. While this strategy was sustainable at smaller sales volumes with a shorter sales cycle, we knew that growing the business meant spending more time on direct sales process and customer success channels.”

— Sam Boonin [paraphrased]

With 160,000 customers it’s no surprise that 2200 (or 68,7%) out of 3200 Zendesk employees are salespeople and account executives.

Based on my estimations, one Zendesk salesperson handles roughly 50 accounts and is responsible for, on average, $37,800 in monthly revenue.

I believe many new SaaS companies undervalue the power of a sales force. In the past few years, digital marketing positioned itself as the holy grail of any business. But marketing can only get you so far. Having a capable sales team is a must — especially if you’re selling high-ticket products or services.

As of March 2021, Zendesk’s blog has over 2513 pages:

That’s a lot of posts, but Zendesk didn’t make them haphazardly.

(The spikes you’re seeing, where Zendesk published almost 450 posts in a single month, are the result of Zendesk moving posts from an old domain to zendesk.com/blog.)

Zendesk is using a powerful SEO-based content strategy called Topic Clusters.

A topic cluster is made out of a central content Pillar (also known as a Hub) and 3-20 Supporting Articles (also known as Spokes) connected by two-way hyperlinks like so:

Each relevant content piece in a Topic Cluster is thematically connected and serves only one audience.

Because of this, Google will, to hyper-satisfy the search intent, improve the ranking potential of every post in your Topic Cluster.

This is the reason why Zendesk outranks its competition for difficult terms like customer service, sales crm, and help desk.

If you don’t believe me just look at Zendesk’s top performing blog posts…

and notice the high position, traffic, and keyword difficulty (KD).

(On top of that, all these keywords are highly related to Zendesk’s products — meaning that the traffic quality is very high.)

So how does Zendesk create a topic cluster?

Zendesk starts by identifying the target audience: which is, in Zendesk’s case, the same audience that’s already using their products.

Zendesk then creates the Pillar: a highly educational piece of long-form content introducing the main topic. Here’s an example of a Pillar from Zendesk’s most popular Topic Cluster, Customer Service:

Zendesk then proceeds to create as many supporting articles as needed to cover every single aspect of the topic.

In the case of Customer Service, these are topics like customer service automation, customer service training, and what is customer support.

In the picture above, I’ve highlighted the hyperlinks on the Pillar page that lead to Supporting Articles. Each article also links back to the Pillar page, creating the Topic Cluster structure as we’ve seen at the beginning of this chapter.

If you have, like Zendesk, a lot of products you’ll have to create a lot of topic clusters. Here are all of Zendesk’s topic clusters, serving all possible audiences:

So, if you want to rank high and get quality traffic using Topic Clusters like Zendesk, you’ll have to stop thinking about which keywords you want to rank for and start thinking about which topics you want to own.

After you get a few clusters under your belt, your website will begin to look like this: 

Remember, when you’re creating a topic cluster, you’re creating the best resource on the planet about a certain topic: something everyone will want to link to.

Meaning you can, regardless of your domain authority, rank unnaturally high for difficult keywords and steal rankings from your haphazzardly-blogging competition.

To generate new leads, a lot of SaaS companies create useful online tools like website graders, color pickers, or logo generators.

Zendesk decided to keep it simple. In 2015 and 2019, they created two simple tools called Zendesk Benchmark and Zendesk CX Trends.

Both of these tools show you how bad you are at CX — the only difference is that each presents the bad news from a different angle.

Together they form one of the weirdest lead generation funnels I’ve ever seen.

It starts with Zendesk Benchmark. Upon landing, you are encouraged to select your industry with a dynamic dropdown menu:

Immediately, Zendesk displays the standards in your industry for customer satisfaction, first reply time, and average handle time, and more.

If you have even the slightest idea about what’s going on in your customer experience department, these numbers raise an alarm: It’s very likely you’re underperforming in at least one of the six metrics.

Zendesk knows they likely surfaced a problem, that’s why they offer three solutions:

1. They invite you to explore the customer experience trends more deeply with a CTA that leads to Zendesk CX Trends — their second marketing tool made to put you in their lead database. (We’ll return to this one in a moment.)

2. An invitation to learn more about customer experience from their whitepapers and blog posts.

3. And finally, a free trial button for everyone who’s been thinking about investing in Zendesk and this tool finally convinced them.

For us, the first option is the most interesting.

Clicking on the button leads you to the CX trends page where you are immediately welcomed with a Customer Experience Performance Scorecard:

You are asked to enter your industry, company size, customer type, and customer satisfaction score (CSAT).

Clicking next displays additional fields which Zendesk uses to put you in their lead database — preparing the ground for a warm outreach from their sales team.

After filling in the information, Zendesk shows you another benchmark. But this time, Zendesk gives you actual scores about how bad you suck:

Here, Zendesk drills the fact that your customer support could use a facelift by comparing your CSAT scores with the CSAT scores of your competitors.

After that, the dark green section contains two options:

1. Click on “Get the trends” and you’ll get Zendesk’s infamous 41-pages long yearly report on CX trends.
2. Click on “How to apply [the trends]” and you’ll get a short case-study on a competitor from the industry you chose:

Here, Zendesk creates immense social proof by showcasing their biggest clients (#1, #4). They also show you which products these clients are using (#2): an attempt to induce fear of missing out and convince you that you also need these products to become a “high-performing” company (#3).

In case you didn’t click on any of the two buttons and scroll down, you are (again) met with product recommendations and some additional benchmarks similar to the ones at the start of this funnel.

Overall, I think this sales funnel does a wonderful job at surfacing problems and positioning Zendesk as the solution. My only complaint is that it’s unusually long, slightly repetitive, and packed full of unrelated CTAs.

One of the best ways to convince potential customers to buy is by showing them how their colleagues got over a business hurdle using your product.

The content piece that explains this is known as a customer case study.

And Zendesk has over 244 case studies on companies like Riot Games, Vodafone, DollarShaveClub, Uber, and Airbnb, and more.

Besides using these case studies in their online tool as we’ve seen in tip #3, Zendesk uses these case studies to backup customer testimonials at two crucial points on their sales pages:

The first place is below the hero section…

And the second place is below key action buttons…

Having testimonials and customer brand logos on your sales page isn’t anything new. But I’ve never seen a company that invests this much effort into the legitimacy of their social proof — click on any testimonial or customer brand logo and it will take you to a unique case study.

The format of the case studies isn’t anything special. In fact, it’s quite standard:

1. First, a summary explains who this case study is for and what kind of improvements they can expect.

2. Then, after a short introduction presenting the customer, Zendesk writes many problem-solution paragraphs backed by a ton of client quotes.

3. Finally, after a few iterations of the above formula, Zendesk restated the results in the closing paragraph.

That said, these case studies still help Zendesk defuse objections and instill trust in potential customers.

Although the quality of the case studies isn’t that interesting, the amount of them is: how does Zendesk get its biggest clients to publicly reveal their data? And to reveal enough of it for a 2000 word report? And how did Zendesk manage to do this over 200 times?

It turns out Zendesk farms case studies in their Customer Community Program called Luminaries — an exclusive group for Zendesk customers where they get free training, invitations to exclusive events, early access to products, and a chance to network with other Luminaries.

Zendesk uses Luminaries to “spy” on group conversations. Whenever a Luminary shares their story, Zendesk reaches out and gets them to explain more. Since the Luminary has already started talking, Zendesk leverages the momentum and gets them to spill every single drop of useful data.

How do I know this?

Look what I’ve found on one obscure Zendesk’s post about customer community:

In return, Zendesk gives their most vocal and enthusiastic Luminaries special perks in hopes of keeping their loyalty.

Since inward expansion (tip #1) is very important to Zendesk, a community like Luminaries is a gold mine.

If you google a generic SaaS product term, like “top helpdesk software”, the first page is going to be nothing but third-party review sites and articles:

This is because a user searching for “help desk software” is likely looking to buy help desk software — and since this is a costly investment, Google thinks that the best way to satisfy the search intent is by serving a ton of unbiased product review websites.

For “top helpdesk software”, we know this is true because the SERP position history hasn’t changed much in the past 6 months — meaning that the users are very happy with the results.

But is Zendesk worried that they aren’t ranking first page for their main product line?

Not at all.

They realize they’re one of the biggest helpdesk software providers so they will rank #1 on pretty much every review site, anyway.

Here’s Zendesk’s first place listing on G2:

Zendesk has over 2200 positive reviews which, with the fact that they’re ranking first place, creates immense amounts of social proof. Because of this, ranking high on a review website is, in many cases, even better than ranking high on google.

It’s also interesting to see that Zendesk’s competitor, Zoho Desk, has even more reviews than Zendesk — but still ranks second place. Since Zoho is much smaller than Zendesk, we can deduce two things:

1. Other companies invest a lot more effort into getting customer reviews,
2. Even though having positive reviews is the best ways to rank, the algorithm also takes some other data into account.

We can see this more clearly with the crowdsourced grid from G2: the companies in the top right corner will almost always rank high on review websites:

In short, these are the companies that have the highest number of positive reviews (we can see Zoho is placed more right than Zendesk) and the biggest market presence (we can see Zendesk ranks above everyone else, taking home the first place overall).

But even if you’re a smaller SaaS company, don’t let this discourage you. Customer reviews on niche-specific review sites (like G2) are still very valuable and you should pursue them regardless of your market share.

I recently got this message from MailShake — a sales engagement platform I’ve been using.

Even for a relatively small SaaS like MailShake, my (one) review is worth more than $50.

Other review sites where you can list your company are Capterra, SourceForge, and GetApp.

Based on my estimations, Zendesk gets roughly 7,500 monthly visitors from these review sites alone. (Read: warm wallet-ready leads.)

We know that Zendesk customers spend, on average, $500 on Zendesk products every month (tip #1). By combining that with a hypothetical 2% conversion rate and Zendesk is adding $75,000 to their MRR every month.

Besides review sites, there are many other places where Zendesk exerts its influence.

I found one of their whitepapers on the homepage of a popular Customer Experience Magazine, CXM:

For a website like CXM —which gets 120k visitors every month— that’s a lot of valuable homepage real estate dedicated to Zendesk. (Note: this is not a media ad, it’s CXM’s own native link.)

Clicking on the picture takes you to a landing page where you can download Zendesk’s CX report in exchange for joining the CXM’s email marketing list.

So in exchange for brand awareness, Zendesk helped CXM generate email leads by lending them content. Besides strategic collaborations and partnerships, I’ve never seen a deal like this anywhere else.

As we’ve seen from tip #2, Zendesk’s SEO-based “Topic Cluster” content strategy allows them to dominate generic search queries like customer experience and sales…

But Topic Clusters can’t help you rank for specific branded keywords like Shopify, Salesforce, or Intercom…

That’s where Zendesk Marketplace comes in — a directory of 1183+ third-party apps and plugins that you can integrate with your Zendesk products.

(Note: I’m not talking about standard software integrations that send some data from one program to another… I’m talking about entirely new plugins developed specifically for Zendesk.)

With Zendesk marketplace, Zendesk not only got a chance to rank for branded keywords, they also got other companies to develop new functionalities for Zendesk products for free.

It sounds miraculous, so how exactly does all this work?

Zendesk knows that a lot of companies (big and small) would love to piggyback off their success and get access to their large customer base…

Zendesk not only allows this but makes it super easy to do: you can find this CTA near the bottom of the Marketplace Homepage.

The CTA leads to Zendesk Developers Platform where you can get all the tools, tutorials, and documentation you need to build your own Zendesk plugins.

Once you build and submit a plugin, Zendesk creates a unique landing page and stuffs it full of branded keywords:

It doesn’t always work for bigger brands, but for smaller brands this dead-simple SEO technique helps Zendesk rank even right below the main website:

In total, Zendesk Marketplace gets 13,453 organic traffic from non-Zendesk keywords, where roughly 2000 rank on the first page:

Not bad for something Zendesk doesn’t have to do much for.

On top of that, Zendesk gives their prospective customers a chance to “pick their own product functionalities” based on their preferences.

Some community apps got quite popular among Zendesk customers. Here’s a comment from a happy user:

Does this comment make Zendesk, “the industry leader”, look bad for not implementing all desired functionalities?

Yes, kind of.

But at the same time, catering to every need would make their products too complex for the average user.

Not to mention they would have to invest a lot of effort in development AND lose other benefits of having a marketplace.

So, for Zendesk, it’s much better to leave their products as they are and allow other companies to improve them. This way, both companies get exposed to new audiences — Zendesk through the SERP and the integration partner through Zendesk marketplace.

Zendesk has 3360 PPC keywords spread over 2001 ads that lead to 26 landing pages.

If you do the math that’s 1.68 keywords per ad, and 77 ads per landing page.

First, let’s analyze Zendesk’s top performing ads:

The ad copy is a mix of positioning (#1 CRM Software), branding (Zendesk Sell), call-to-action (Try Zendesk for Free), and benefit-driven copy (Increase Customer Satisfaction).

But Zendesk changes the ad copy depending on the search intent. Look at the copy for keywords that start with Zendesk:

The ad copy is made entirely out of branding and positioning statements. Zendesk knows that the search intent behind these keywords is to navigate to the official Zendesk site — and that’s what they’re pointing out in the copy.

Now compare that with the copy from these two ads, designed to steal prospective customers from Zoho and Intercom:

Here, Zendesk is using a strong CTA with a benefit-driven statement.

Also, notice the lack of branding. Branding in ads works best when the target audience is already excited about your company. People using Zoho or Intercom couldn’t care less about Zendesk — but they do care about using “industry-leading software” that’s “easy to set up and simple to use”.

Let’s move on to keywords, offers, and landing pages. The majority of Zendesk’s PPC keywords are either:

• Branded keywords like Zoho, Freshdesk, Zopim
• Generic product names like chat online, crm software, help desk

Branded keywords are responsible for nearly all paid traffic:

Their main offer is a simple 14-day free trial for one of their products: chat, guide, sales, support, or talk.

Each offer has a unique landing page. Here are the most popular ones:

We can see that the top three landing pages get 70% of all the traffic — one of them being Zendesk’s own homepage.

Besides the homepage, all other landing pages have the same simplistic design. For example, here’s the entire landing page for Zendesk Sell:

It’s made out of 7-parts:

1. A short benefit-driven title.
2. A simple product description.
3. No-strings-attached “start your free trial” CTA.
4. Brand bar social proof element showing brands using this product.
5. A short benefit-driven subtitle with a one-sentence explanation below.
6. Four more secondary benefits of Zendesk Sell.
7. Final “Start your free trial” CTA.

Essentially, a list of six benefits with two CTAs and some social proof.

Now look at the landing page for Zendesk’s chat software:

It’s the same!

Since Zendesk is spending between $0,5M and $1M each month on PPC ads, it’s safe to assume that these are some very high converting landing pages.

Near the end of 2015, the marketing team at Zendesk noticed a rise in Google searches for “zendesk alternative”.

Instead of boosting their SEO marketing budget or adding boilerplate text on their webpage, they build a responsive website for a fictitious rock band called Zendesk Alternative.

The team even produced a short rockumentary about how Zendesk stole their name. Check it out below:

The goal was to intercept Google searches for Zendesk alternatives and reconnect churning customers back to the Zendesk universe.

Although it was a whacky idea, it was backed by data. Here’s what brand manager, Ethan Kanat, had to say:

We tend to think of the concept as “the idea” and the data as the “reason for the idea”. And yeah, always pick the weird idea. But remember that even the best creative in the world doesn’t really mean anything if it doesn’t serve a purpose.

— Ethan Kanat, Creative Brand Manager [paraphrased*]

Immediately, Zendesk Alternative was a massive success.

In its viral beginning, Alternative’s website achieved higher customer conversion than Zendesk’s main website.

You might think this campaign didn’t scale since it doesn’t match the search intent…

But after 4 years, they’re still hovering at 2nd and 3rd place for the search term “zendesk alternative”, which gets over 2,900 search volume per month.

Look at spot #4: they’re even above their biggest competitor, Freshdesk.

Based on my estimations, the website gets roughly 350 clicks every month… And since “zendesk alternative” PPC keyword has a CPC of $20.36, the project is still worth $7,120 per month (not taking into account the saved LTV of customers who don’t churn after hearing that beautiful singing).

If I were Zendesk I’d invest more into this webpage. Zendesk doesn’t really have many “us vs. them” comparison sites, so imagine Zendesk Alternative releasing a whole album of “Zen vs. them” songs.

How cool would that be?

Thanks for reading!

If you need any help writing long-form content like this for your blog shoot me a message at Mihael@21writers.com