Zendesk is introducing a new outcome-based pricing model.
Described by the company as an “industry first” for customer experience, the model is directly dependent on the performance of Zendesk’s AI agents.
Customers who deploy Zendesk’s agents will now only be charged for issues and queries that are resolved autonomously by AI.
The vendor believes that in the current climate, “traditional pricing models no longer suffice,” arguing that its new system is more in keeping with an AI-first customer service and experience sector.
In addition, Zendesk claims that its new model will enable customers to fully understand the value and quantify the results that their AI solutions are delivering.
In discussing the news, Nikhil Sane, SVP & GTM of Strategy and Pricing at Zendesk – explained how the new model was a signifier of the company’s position as an AI pioneer:
“As the industry moves toward more transparent, results-oriented business models, we are proud to lead the way with a solution that ensures companies can confidently invest in AI.
Our outcome-based pricing solution is more than just a pricing model – it’s a reflection of our dedication to driving real, measurable success for our customers.
“As we continue to innovate and lead in AI-powered CX, Zendesk remains committed to listening to our customers and evolving all aspects of our offerings to meet their needs.”
So, let’s take a closer look at precisely how this new solution will work.
Outcome-Based Pricing
The concept of paying per AI agent resolution may sound fairly straightforward on the surface, but as is often the case, there’s a little more to it than meets the eye.
In detailing how customers will be able to maximize the potential of the new model, Zendesk outlined the following three tenets of the solution:
Flexibility: Zendesk offers a flexible AI integration approach tailored to each business’s unique needs and timelines. This allows companies to incorporate AI agents while continuing to use human agents as needed.
Agents can oversee automated resolutions, predict future requirements, and adjust plans to align with business objectives.
Transparency: Zendesk aims to make the pricing model as straightforward as possible, providing customers with clear value and control.
To help with this, the company provides a starter usage level at no extra cost, which enables businesses to scale their AI-driven automated resolutions as needed.
This approach ensures transparent tracking across all channels, helping businesses manage their AI usage efficiently.
Scalable and predictable: To further optimize AI integration, Zendesk provides an in-product dashboard that offers visibility into automated resolution usage and automation rates.
As AI usage increases, the pricing model adjusts accordingly, allowing businesses to scale their operations while managing budgets effectively and avoiding unexpected expenses.
A Growing Trend?
While Zendesk claims to be the first CX vendor to implement an outcome-based pricing model, it is one of many to eschew traditional pricing systems in recent times.
Earlier this summer, when looking for a new contact center provider, Samsung settled on AWS’ Amazon Connect platform due, in part, to its flexible pricing model.
Whereas most CCaaS vendors typically offer yearly pricing plans based on metrics like user count and usage, AWS customers only pay for what they use, offering greater flexibility without long-term commitments.
Indeed, when speaking about the decision to choose AWS, Reuben Lowenstein – Customer Care Manager at Samsung Electronics – highlighted the company’s unique pricing model:
AWS is not a ‘telephony company’, it is an AI company with a modular platform where you purchase what you need and pay for what you use.
NICE is another CCaaS juggernaut that recently announced a revamp of its pricing system via the launch of its Mpower platform.
Previously, NICE offered six CXone packages, with the “Complete Suite” priced at $209 per agent per month.
However, users frequently added additional elements of the company’s Enlighten solution, which were charged at an à la carte rate.
This approach led to rising prices as contact centers frequently added new AI features, causing concerns for CIOs over escalating expenses.
The new MPower plan aims to simplify AI procurement and offer more predictable costs.
Priced at $249 per agent per month, MPower includes an additional usage-based charge for each Autopilot or Copilot session. Despite this, the new pricing model offers contact centers better cost predictability compared to the previous system.
While all three of these pricing models are different, they are all examples of CCaaS vendors looking to offer customers more flexible and innovative solutions.
In a recent discussion with CX Today, Rebecca Wetteman, CEO & Principal Analyst at Valoir, provided some insights on why vendors are moving away from traditional pricing models.
She explained that the industry has finally begun to acknowledge that relying on the number of agents as a revenue metric is becoming obsolete as the role of agents is diminishing.
Instead, Wetteman argues that there is a growing focus on generating revenue through vertical solutions and virtual agents:
Whether you call it consumption based, or value based, or whatever it is, everybody’s having to rethink now their pricing models.
As a result, companies will need to reconsider their pricing strategies, and investors will also need to adjust their valuation methods to account for these changes in revenue models.
More News from Zendesk
In other news, earlier this month, Zendesk revealed that it had expanded its partnership with Meta to introduce Relay, a new outbound customer messaging app.
Available on the Zendesk Marketplace, Relay enables businesses to send proactive messages through WhatsApp and SMS, enhancing customer interactions.
The app allows companies to manage all customer communications within Zendesk and personalize messages using dynamic content and audience data.
The company believes that Relay will help businesses improve customer experiences by delivering more relevant and engaging messages at scale.
Elsewhere, Zendesk recently announced the launch of a venture arm to invest in early-stage AI startups, focusing on seed and Series A rounds.
This initiative aims to keep the company at the forefront of AI advancements and leverage the technology’s transformative potential.
Zendesk Ventures will target startups specializing in customer service or related fields, with a focus on AI and an annual recurring revenue (ARR) of under $50 million.
Through these investments, Zendesk seeks to enhance its AI expertise, expand its app marketplace, contribute to the AI industry’s growth, and identify potential acquisition opportunities.
