The Freshworks story began nine years ago, when founder Girish Mathrubootham’s television set broke—and his poor experience with customer service sparked his decision to develop a new customer service solution, dubbed Freshdesk.
Since then, the company has morphed into Freshworks. Over the years, the company has added sales, marketing and other customer engagement solutions to its product line up. Freshworks, which was established in Chennai, India, with its global headquarters in San Mateo, CA, is on a growth trajectory. To date, most of its 220,000 customers are from the ranks of small and medium businesses (SMBs), but Freshworks is expanding its sales and marketing efforts to woo midmarket and larger organizations.
With this in mind, I was interested in attending Refresh19, the company’s end-user event, held last week in Las Vegas, to learn more about how Freshworks intends to become a force in larger companies, while still remaining true to its SMB roots.
Here are my top takeaways from the event, which also featured a full day analyst session.
Indian Democratic Design: At The Heart of Freshworks Development Philosophy
Freshworks success in the SMB market is largely due to its commitment to the principles of democratic design, which have guided development at the company since its inception.
Freshworks featured Marcus Engman, former Head of Design at IKEA, at the event’s keynote. IKEA originally popularized the democratic design concept, which is based on five key principles: Form, Function, Quality, Sustainability and Low Price. These tenets are behind every IKEA product, from idea creation to manufacturing, into the store, and then into the hands of customers.
Freshworks has adapted this mantra to create the philosophy of Indian democratic design, with a pledge to design software to “empower all businesses.”
As Mathrubootham noted in his keynote, products built for the U.S. market don’t necessarily translate in India and other places around the globe. The principles behind Indian democratic design include:
- Simplicity. Is the solution truly intuitive and self-explanatory? Will users be able to access and use it right off the bat, in their existing environments? It’s not easy to make complex business solutions that do a lot of sophisticated things simply, but Freshworks conducts extensive research with users, with the goal of providing them the applications they need with as close to a frictionless experience as possible. Mathrubootham noted the example of PhonePe, a company that introduced a device that looks like a calculator that enables small Indian merchants without WIFI or POS systems to accept digital payments over cellular networks.
- Self-reliance. Can customers around the globe get up, running and self-sufficient with the applications quickly and easily? Freshworks self-service model aims to make it easy for users from different backgrounds and varying levels of experience and savvy to get productive with its solutions with little or no assistance.
- Scalability. Freshworks started in the SMB market, designing for the masses of SMBs—not just very large, well-resourced large enterprises. While it is now moving up to also serve larger customers, it insists that it will continue to develop products that work for businesses of all sizes.
- Craftsmanship. Well-crafted software should be extremely intuitive. Freshworks asks customers questions to better understand what works, what doesn’t work, and how they would like things to work. The company focuses on designing its solutions so that every icon, label and workflow makes sense and optimizes the customer experience.
- Affordability. Since Freshworks is designing for even the smallest of businesses, from developed to developing countries, affordability is a key tenet in its democratic design philosophy.
Freshworks Evolution from Service Solution to Customer Engagement Platform
Freshworks positions Freshworks as a tool its customers can use to create “customers for life” through more personalized and effective customer engagement. Freshworks’ messaging centers on what it terms the “infinite customer engagement loop.”
Freshworks’ current portfolio covers solutions to help its clients “manage the customer engagement lifecycle from marketing through service.” The company’s first and flagship product is its Freshdesk customer service solution. Over the years, Freshworks has made acquisitions to extend its portfolio.
At the event, Freshworks announced Freshsuccess customer management software, slated for availability in January 2020. The company intends to deliver its marketing, sales, support, and success solution via a unified platform to provide its customers with a shared, holistic view of the customer across these functions.
Bringing this unified suite to life will be key to enabling customers to capitalize on the four key trends Freshworks believes will drive customer engagement:
- Contextual engagement, to understand who the customer is and what drives their behavior.
- Predictive engagement, to anticipate customer needs and fulfill them.
- Anywhere engagement, to serve customers consistently across purchasing and engagement channels.
- Collaborative engagement, to enable teams to collaborate with less friction to serve customers.
For instance, Freshsuccess will give users detailed views and analysis of customer behavior, enabling them to create health scores, identify red flags, boost customer retention rates, get better customer insights, and make it easier for customer engagement teams to collaborate.
Expanding Freshworks Into the Midmarket
Freshworks roots are in SMB, which it defines as companies with 1 to 500 employees. It uses a product-led, inbound sales model to serve this market, with a focus on low-touch, self-service sales for SMB customers.
A few years ago, the company realized it had also started to infiltrate 500 to 1,000 employee organizations, which it categorizes as midmarket—and was making inroads into larger enterprises as well. To better capitalize on these opportunities, Freshworks created a field-led outbound sales and marketing team to cater to the different decision-making and buying behaviors of larger companies.
However, even as Freshworks moves upstream, Mathrubootham maintains it will remain true to its SMB roots. Targeting the midmarket is very intentional, but Mathrubootham says Freshworks will only pursue larger enterprise deals when these businesses can use its solutions without a lot of customization—so that they don’t deflect Freshworks from its democratic mission.
It can be all too easy for vendors to lose SMB footing when they start chasing bigger deals that require complex customizations and accommodations.
However, Freshworks commitment and focus on democratic design—and a conscious effort to veer away from deals that require extensive customization to meet the prospect’s needs—bodes well for its continued ability to serve SMBs.
Meanwhile, although the promise “Customer 360” is nothing new, vendors have a hard time fulfilling on it. Many vendors have acquired multiple solutions over the years, and customers often have to make substantial investments to integrate them get the unified views and workflows they need.
With Freshsuccess, Freshworks is doing the tough integration work to get all of its applications running on an integrated platform–so that its customers don’t have to. If Freshworks can take the integration burden off the backs of customers, it can claim substantial differentiation versus key competitors, such as Zendesk and Salesforce. This is relevant for all customers, but particularly for SMBs, who often can’t afford pricey integrations.
Freshworks still needs to address back-office integration with financials, inventory, logistics and other functions that must also integrate with customer-facing solutions to provide a true 360-degree customer view.
Overall, however, Freshworks focus on driving value for customers and its diversified presence in both developed and developing countries, and the introduction of Freshsuccess bode well for the company, and its continued commitment to SMBs.
© SMB Group, 2019