Today’s podcast is a two-parter and features interviews with Tom Eggemeier, Adrian McDermott and Matthias Göhler, which took place at Zendesk’s recent Relate event, which took place in Las Vegas on March 25th-27th. Tom Eggemeier is the Chief Executive Officer of Zendesk, Adrian McDermott is the Chief Technology Officer at Zendesk, and Matthias Göhler is EMEA Chief Technology Officer at Zendesk. We talk about all of the latest developments at Zendesk, some of the big product announcements, starting another revolution and how knowledge is the coal in this latest industrial revolution.

This interview follows on from my recent interview – AI-driven search volumes are exploding and what brands should be doing about it – Interview with Vivek Pandya of Adobe – and is number 537 in the series of interviews with authors and business leaders who are doing great things, providing valuable insights, helping businesses innovate and delivering great service and experience to both their customers and their employees.

Here are the highlights of my chat with Tom:

• Mikkel Svane, on this very podcast back in 2012, talked about how Zendesk was leading a customer service revolution.
• This is the second revolution for Zendesk – a resolution revolution.
• We’re hoping to be one of the rare companies that reinvent customer service for a second time.
• Underneath our resolution platform, there’s a lot of announcements, many of which are agentic in nature, and that’s going to drive the shift from where we are now, for example categorizing and using Gen AI to categorize tickets, automate responses etc to actually being agentic in nature and solving some problems, taking some actions.
• I think the big differentiation for us is that I think we are the best at helping customers strike the right balance of agency and creativity on one side and control on the other.
• We have over 30,000 customers with a help center and knowledge base. And, we just put our ultimate GPT (UGPT) – generative search – in the help center and it’s free for all customers.
• We’re working on our help center so that we’re able to (with Knoweldge Graph and Knowledge Builder) analyze all of your articles, all of your tickets and all your voice data to identify any gaps in your knowledge base. We’ll then use generative AI to create articles for you to approve to help you plug those gaps in your knowledge center.
• Those new articles can then be automatically translated across languages.
• The simple things like cleansing your data are actually so important and it’s often overlooked.
• We have 18 billion interactions where people basically give a thumbs up or thumbs down and we use that anonymized data to post train LLMs to make them even more and more accurate.
• We really see customer service going from reactive to proactive in the coming years and the lines between service and sales are probably gonna blur.
• Zendesk is creating a service OS.
• Zendesk has done a great job of building a horizontal platform that was always focused on customer service. We are now launching our Employee Service Suite, designed specifically for internal support teams such as IT and HR, with plans to extend that to IT Asset Management in the coming months.
• We are aligning our financial success with your service success.
• We’re only going to charge our customers if they use our AI agent AND if the agent resolves the problem.
• We assess those results through quality assurance, which is more traditional AI and machine learning. We then do a manual subset with the customers. We’re very, very accurate on assessing whether we have solved the problem.
• Zendesk is intent on becoming an ‘UnCaas’ player, in contrast to many of the clunky CCaas players out there, with the acquisition of Local Measure (pending regulatory approval).
• I hear other vendors say we’ll automate 80 or 90% of all of your interactions. However, I’m always highly skeptical of those sort of numbers.
• I like to give really wide ranges to customers. I’d say something like…. I think we can automate between 20 and 80%. And if you give us a couple of days to go analyze your data, I can get within 10 % of what we can go automate.
• Etsy launched our advanced AI agent about six months ago and we’re at between 30 and 40 % now, automated resolutions for the interactions they’re having with their customers.
• Catapult Sports: We’ve been able to automate a ton of interactions for them while improving their CSAT score by one percent. When you’re getting the best in class an increase of one percent that’s really, really good.

Highlights of my chat with Adrian and Matthias:

• One of the superpowers of Zendesk and one of the driving forces of our mission, product and company philosophy, has been this idea that we can democratize the best and most innovative technology and the best practices that we see that people are applying in customer service and CX.
• I think there’s a lot of interest and excitement around the possibilities that come forth from generative AI. But I think there’s also a lot of nervousness because people are like, what is your AI strategy?
• I worry a little bit that one has to have a strategy about a particular technology or API.
• What one should always have is a business strategy about driving the business or customer experience and in particular customer service.
• Annually the industry spends about 600 billion on CX, out of which about 500 is on labor cost.
• When we look at our customer base of 100,000 customers, we saw interaction volume increase 3X over the last couple of years, and we actually expect this to continue.
• This is where I think the third generation of AI agents, which we announced yesterday, will significantly help because now you have a system where the system is much better able to understand intent and requirements from customers and then take action or guide a customer through a process all in aid of helping customers to achieve their goal of 80 % automation.
• The way our third generation AI agents are architected, you describe the 20, 30, 50 things that one can do in a customer service instance for a given company. You give them a name and a description, and then we hand those to an AI agent with a bunch of proprietary prompting, and we say, “Okay, Matthias is going to come online and start chatting to you. Figure out which of these 50 things he wants to do, and if it’s not one of these 50, we’ll hand it off to a human and they can have a conversation with Matthias.”
• I’m excited from a customer service point of view to see what we do with the capacity that we can free up.
• We’ve always believed that customer service is a knowledge-driven endeavor.
• If the AI revolution is the latest industrial revolution, knowledge is the coal.
• I’m really excited about our knowledge builder because I think it will take some of the grind out of knowledge gap identification, creation and maintenance.
• The role for agents is changing from writing text to reviewing, editing, and then approving the text.
• Trevor Noah said “Change is great, but changing is tumultuous and terrible.”
• A good example of how to start: A customer from the Nordics, a telco company. When they started to implement AI agents, they started by working with their human agents and identifying the top 10 processes that are high volume, highly repetitive, and take a lot of time. They defined and observed those processes to see how they could automate them, and then rolled it out consistently. That not only increased customer satisfaction, it also increased employee satisfaction.

About Tom

Tom Eggemeier, is the CEO of Zendesk, and a member of the board.

Most recently, Tom was a partner at the private equity firm Permira, where he was the head of the Menlo Park office and focused on investing and value creation in the Technology sector. In addition to the Zendesk board, Tom serves on the boards of Axiom, G2, Seismic, and Mimecast. Prior to joining Permira, Tom was the President of Genesys, a Permira fund portfolio company and global leader in omnichannel customer experience and contact center software. During his more than ten-year tenure with Genesys, he focused on developing and implementing strategic and operational initiatives aimed at driving value creation across the business. Tom’s previous global experience includes working in Paris, France for almost five years along with over 20 years operational experience in the technology sector leading teams from sales to research and development.

Tom holds a B.A. from the University of Dayton and a J.D. from the University of Chicago Law School.

Tom and his family live in the San Francisco Bay Area, CA. He enjoys traveling, reading history books, and following the University of Dayton Flyers basketball team.

About Adrian

Adrian McDermott has led the product management and engineering teams at Zendesk since 2010. He was responsible for defining and leading global product strategy and product development. In 2021, he moved into the Chief Technology Officer role to focus on engaging customers to create new paths for product innovation that shape the future of customer service. Previously, Adrian served as CTO at Attributor, where he managed web-crawling and content-identification systems for text, video, and images. Adrian was the first engineer hired by Plumtree Software and remained with the company through its IPO and subsequent acquisition by BEA. He also serves on the Board of Directors for Be My Eyes, a visual assistance app and previously for Mandiant, a security software company. Adrian is a Yorkshireman living in San Francisco. When he is not working, you can find him spending time with his wife and two children, pretending he can still code, and advising start-ups.

About Matthias

Matthias Göhler joined Zendesk in October 2021 as EMEA Chief Technology Officer. As a regional CTO, he leads the development of Zendesk´s vision for innovation in customer experience based on the needs of EMEA customers. He is passionate about helping brands realize their goals for market-leading customer experiences that can build deeper customer relationships and brand loyalty.

Matthias has more than 20 years of experience in technology and SaaS industries. He joined Zendesk from SAP where he spent the last 10+ years in their Customer Experience practice building up an industry portfolio for Customer Experience. Prior to SAP, Matthias worked with Gemini Consulting with their strategy practice.

Based in Mannheim, Germany, Matthias also volunteers his time as a coach for various start-ups and social projects.

Credit: Photo by Priscilla Gyamfi on Unsplash