Listen to the Story
The requirements for businesses to meet and exceed the demands of customers and employees have never been higher. Now, everyone is accustomed to the instant gratification of getting whatever they want, whenever they want it—at any time and from anywhere. These modern consumer experiences have led to higher expectations for business interactions, and attracting customers to stay, buy more, and share their delight is increasingly challenging.
Business users need powerful and intuitive software to solve problems for the customers and employees they serve quickly. Yet, they are often forced into using software applications mandated by senior decision makers—executives who do not use the application daily and have a limited understanding of how it works or how it meets the users’ needs.
Many companies are turning to cloud software in response to rising customer and employee expectations that have intensified over time. The SaaS revolution, born almost 20 years ago, promised to free organizations of all sizes from the shackles of the client-server paradigm of business software.
While first-generation SaaS providers successfully reduced the burden of buying, provisioning, and managing on-premise infrastructure, they largely mimicked on-premise applications with the user experience. Legacy SaaS software suffers from the following drawbacks:
- Not purpose-built to meet users’ needs
- Expensive with a high total cost of ownership
- Prolonged time to value
- Not accessible for companies of all sizes
Freshworks strives to empower businesses with simple yet powerful software they can rely on to delight the customers and employees they serve with its SaaS products and subscription business model. How? In this strategy story, we will decode the business model of Freshworks and its products. We will understand what does Freshworks do and who its competitors are.
What is Freshwork? What does Freshworks do?
Founded in 2010 by Girish Mathrubootham and Shan Krishnasamy begin, Freshworks aims to make it fast and easy for businesses to delight their customers and employees. Freshworks does this by taking a fresh approach to building and delivering software-as-a-service that’s affordable, quick to implement, and designed for the end user.
Unlike legacy software, Freshworks builds tech that works for everyone, making it easy for IT, customer service, sales, marketers, and HR to do their job and delight their customers. More than 50,000 companies use Freshworks’ SaaS to enable a better customer experience (CX, CRM) and employee experience (ITSM, HRSM).
Crucially, companies do not have to choose between moving fast and satisfying unique requirements. Freshworks offers a marketplace with over 1,100 pre-built apps to help companies customize their solution. Through drag-and-drop functionality and low/no-code customization, companies can configure Freshworks’ solution to meet their needs just as easily as it is to try or initially buy.
Freshworks’ subscription business model allows businesses to trial and adopt. As users start to realize value, they rely on Freshworks’ software for their day-to-day workflows, expand usage within their organization, buy additional functionality, and evangelize Freshworks’ software within their organizations.
This helps Freshworks generate better insights and automation capabilities, which further enhances Freshworks’ value proposition, and a virtuous cycle is established. The cycle enables robust Product-led growth (PLG).
Freshworks’ self-serve software drives down TCO and makes adopting Freshworks’ software affordable.
- It does not require an army of expensive consultants and IT resources to implement.
- Custom business requirements typically can be addressed through pre-built applications available in Freshworks’ marketplace rather than through expensive professional services.
- Maintenance is minimized through having a common platform that all Freshworks’ products use and having a self-service library that addresses many common problems.
What is the business model of Freshworks? What are the products by Freshworks?
Customer delight: Freshworks’ software enables personalized and context-aware interactions across multiple channels, enabling users to be highly responsive to customer inquiries.
Employee delight: Freshworks’ products are designed to optimize employees’ experience, including the most advanced technologies that are easily accessible and are not burdened with unnecessary features or process layers, enabling them to focus on their job responsibilities and spend less time navigating bloated, unwieldy, difficult-to-use software.
Instant onboarding: Freshworks’ intuitive UI allows users to learn Freshworks’ products quickly, allowing them to serve their customers’ needs better, faster, and more efficiently and avoid lengthy and expensive implementations and high ongoing software maintenance costs.
Extensibility and customizability: Businesses can also build custom internal applications to extend the capabilities of Freshworks’ products. To date, businesses have built over 2,900 custom apps to address their specific use cases. In addition, Freshworks’ marketplace provides access to over 1,100 applications developed and published by third parties that businesses can plug into their Freshworks solution to extend the product further.
Accelerated user productivity. Freshworks’ products contain automation and collaboration functionality that enhances user productivity. Freshworks’ products augment human engagement by automating processes to address and answer customer and employee requests.
All of Freshworks’ products leverage Freshworks’ Freshworks Neo platform, which provides shared services that enable the company to innovate and release new products rapidly.
Businesses can use Neo—which provides a low-code development and a hassle-free deployment environment—to extend and integrate Freshworks into their existing solutions and perform advanced analytics to gain insights that help them run their businesses more efficiently.
Customer Experience Product Offerings
Freshworks provides solutions that serve the needs of users in the CX and ITSM categories, and it has also expanded Freshworks offering with Sales and Marketing automation products. These product offerings enable organizations to acquire, engage, and better serve their customers and employees.
For customer-facing teams, Freshworks offers Freshworks’ CX family of products, Freshdesk, including Freshdesk Support Desk, Freshdesk Omnichannel Suite, Freshdesk Messaging, Freshdesk Contact Center, and Freshdesk Customer Success. These Freshworks products allow businesses to delight their customers across touchpoints, streamline customer conversations, and automate repetitive tasks.
IT Service Management Product Offerings
For employee-facing teams, Freshworks’ ITSM product, Freshservice, provides the intelligence and automation businesses need to give employees the “consumer” experience they now expect.
Freshservice enables organizations to use its AI-powered service management capabilities to streamline IT service delivery, including unified incident management for holistic handling of incidents, knowledge management, and change management.
Freshservice supports employee productivity by enabling internal teams to onboard new employees into an organization quickly. With Freshservice’s multi-channel approach for self-service, employees are able to interact with service desks across departments using their channel of choice.
Sales & Marketing Product Offering
For go-to-market teams, the offerings are Freshsales, which businesses use for sales force automation, and Freshmarketer, which businesses use for marketing automation. Freshworks also offer Freshsales Suite that includes the best of the sales force and marketing automation with a unified customer record so businesses can better market and sell to each customer.
Freshteam is Freshworks’ HR Management solution that allows businesses to manage the entire employee lifecycle, including recruiting, employee onboarding, and other HR workflows.
Sales and Marketing Strategy of Freshworks
The foundation of Freshworks’ go-to-market strategy is a highly efficient inbound motion driven by PLG, paid campaigns, search engine optimized (SEO) content marketing, and listings across peer review sites to drive organic traffic.
Leads are ushered into a trial where they experience in-app cues and functionality that prompts conversion to pay customers. Freshworks layers in an outbound sales and marketing motion, as well as a partner-led sales distribution strategy to increase success across the breadth of its market opportunity.
Freshworks’ marketing efforts primarily focus on generating high-quality leads and building a sales pipeline through a combination of growth marketing and brand acceleration programs across online and offline channels. Freshworks’ digital and content marketing teams generate strong inbound demand through effective paid, social media, and SEO tactics that support website traffic growth and conversions.
Freshworks also markets its solutions through targeted online events, webinars, and offline events across different regions, including trade shows, roadshows, and its flagship global user conference, Refresh. Freshworks’ events are designed to promote favorable word of mouth, discovery, and demand generation.
Freshworks made $371 Million in 2021. Freshworks primarily works on a subscription-based business model as substantially, all Freshworks’ revenue is derived from subscriptions, which comprise fees customers pay for accessing Freshworks’ cloud-based software products during the subscription term. Freshworks sell subscriptions for Freshworks’ cloud-based solutions directly to customers and indirectly through channel partners through arrangements.
Professional services revenue comprises less than 5% of total revenue and includes fees charged for product configuration, data migration, systems integration, and training.
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Who are the major competitors for Freshwork?
A significant number of companies have developed or are developing products and services that currently, or in the future, are Freshworks’ competitors for its different offerings.
- Within CX, major competitors for Freshworks are CX suites companies, such as Salesforce, Zendesk, and Zoho, legacy vendors, such as Oracle and SAP, and pure-play vendors.
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- Within ITSM, Freshworks primarily face competition from traditional vendors, such as ServiceNow, BMC, Ivanti/Cherwell, and modern pure-play vendors, such as Atlassian.
- Within Sales & Marketing, major competitors for Freshworks are full-featured vendors, such as Salesforce, HubSpot, and Microsoft Dynamics; legacy vendors, such as Oracle, SAP, and Sage; and pure-play vendors.