When Should You Fire Your Customers?

when-should-you-fire-your-customers

Focus is precious, especially for a growing business. Focus is the only way a business can differentiate, by repeatedly delivering perfectly crafted experiences to the perfectly fitting customer. One of the biggest detractors of focus is wrong-fit customers.

How do you know a customer is wrong for your business?

For one, they cost you more than they bring in. Your team ends up spending a disproportionate time with a wrong-fit customer, whether that is giving attention to customers who are frustrated that they can’t do what they want to do, or helping them figure out crazy workarounds.

A wrong-fit customer chose you and bought your product for the wrong reasons, use your product in a way you don’t fully support and make demands that you aren’t necessarily set up to deliver on.

Put simply, it’s a lose-lose relationship.

The wrong kind of customer takes away your focus

fire wrong customers

At Kayako, we’ve suffered greatly from selling to wrong-fit customers in the past. We tried to be something to everyone because we didn’t want to miss out.

While we have many enterprise customers who use Kayako successfully and in really amazing and effective ways, serving small and medium size businesses (SMBs) is what we are geared up to do best.

I recall one instance in the early days where a large enterprise customer (let’s call them BigCo) approached our sales team eagerly. They wanted to use Kayako to serve internal employees – easy enough, right?

BigCo, however, had only one objective: HR workflow. Their requirements certainly stretched the limits of Kayako’s workflow functionality. There are powerful workflow tools built in to Kayako to help businesses handle customer requests at scale. These same tools can be used in other ways – some of our customers also use Kayako for bug tracking, change management and approvals.

For BigCo, our awesome support team prepared creative use cases and presented them to BigCo’s evaluation team. They showed them that they could (with workarounds – “you could do that if you twist this knob, put this thing there…”) achieve their stated requirements with Kayako.

All the boxes got ticked, and BigCo signed up to Kayako with a significant contract. It was a big win for the team.

But fast forward three months later, and that big win wasn’t feeling so great anymore. Yes, BigCo were able to achieve their stated requirements with Kayako three months ago, but requirements can change. And requirements did change.

It became clear to BigCo that while their evaluation team had ticked all the boxes, Kayako couldn’t adapt with BigCo, because Kayako wasn’t built to do what they wanted.

BigCo blamed us: they felt Kayako was missold to them. They felt cheated and they were angry. We were flooded with feature requests and implementation demands, which while they would be useful to BigCo, were pretty much useless to the rest of our customers.

Say hello to burnout

It turns out that there’s a real, quantifiable impact when support reps are paired with unresolvable cases. Their moods turn negative. They start taking fewer calls. They take more breaks.

Supporting the wrong kind of customer means starting on the back foot on every request and interaction. Because there is a fundamental mismatch between what the customer expects and what we’re able to deliver to the customer, the support team loses their empowerment. It becomes that much more difficult for the support rep to be the customer’s advocate and deliver success to the customer.

This paints a grim scene: burned out support reps, resentment, interpersonal friction and an unmistakable dent in productivity. Working with a stream of impossibly demanding customers day in, and day out would drain anyone’s emotional energy and enthusiasm.

Our support and product team had their attention taken up by BigCo firefighting: talking to and calming down angry administrators, building features features for BigCo, trying our best to keep BigCo with us. They were unhappy to be with us, and we were unhappy that we simply couldn’t turn BigCo into a happy customer.

The cost of a square peg in a round hole

All this distraction was a big sacrifice: we had a big contract in hand, sure. But we were spending way less time building value that would help our many other customers advance.

Where did we go wrong? We showed everything BigCo could do with Kayako, but we didn’t have the conversation about what would be best for BigCo’s goals. We didn’t take the time to learn about their future plans. We ignored all the warning signs that BigCo was trying to fit a square peg in a round hole, and we were helping them mash it in.

After a frank and amicable conversation with BigCo, we parted ways on good terms. While we didn’t cut the cord immediately, we did have to fire our customer. We gave BigCo the option of ending their contract early, and gave them all the support they needed to migrate onto a better fitting, specialised platform.

Customer centricity doesn’t mean trying to be everything to everyone

focused energyHigh performing, customer centric companies don’t bend over backwards to create imaginative workarounds and new features for each and every customer. They don’t allow themselves to pull in all directions at once.

Instead, the best companies relentlessly focus. They focus on their ideal customer and on building an offering that suits them perfectly by giving the customer the shortest path to success. Focusing energy in one direction means you can go a lot further.

Wistia knew this from the get-go, and even helps customers find an alternative if they’re not the right fit. Dave Cole, Wistia Support Pro says:

“We have a clear sense of the type of customers our product is built for. And if our product is not a good fit for certain potential customers, that’s OK!

It’s better to help them find a different service that better suits their needs than to try and make them happy with Wistia. If we worked tirelessly to serve all the people interested in Wistia, we’d end up having a customer base comprised of people with extremely disparate needs, and we’d be dead in the water.”

In other words, if they’re not the right customer for Wistia, they don’t try to keep them. There is no benefit to either side.

Don’t cast a wide net for customers – fish for your ideal ones

There’s one great way to attract the ideal customer and keep everyone else at bay: talk straight to them.

Unbounce talks straight to their ideal customer in their marketing, and with great results. Check out the strong, clear messaging they’ve developed on their homepage.

Who is Unbounce for? Marketers who want or need to build landing pages without an IT team. Their CTA (“Build a high-converting landing page now”) speaks to a customer who needs to convert customers fast.

Everything Unbounce does is targeted to digital marketers – their blog full of helpful conversion tips, the Call-to-Action podcast, and their resource center. They’ve effectively built a tribe of conversion-driven marketers, and it works perfectly for them.

A landing page product could be pulled in a lot of directions.  After all, a developer or a designer’s ideal landing page tool would probably look different. It’s clear that Unbounce isn’t for them.

Conclusion

Listen to those warning signs in early sales conversations. If you feel like you’re bending too much, you probably are. Invest time in understanding your customer’s future plans and goals with your solution, and not just today’s requirements. Success is not achieved when you make that sale; the hard work is up ahead.

Set your business up to help your customers achieve success by understanding your ideal customer, and learning when to say no to wrong-fit customers. Your team will thank you for it! And that’s what a win-win relationship looks like.





Customer Support State of the Profession 2016 Report




Don't miss our latest success secrets

Want the best customer support and startup content delivered straight to your inbox?

About the author
Jamie Edwards

Working on helping our customers deliver customer service so good it becomes their competitive advantage.

  • Darryl

    I have to say that I take exception to this line:

    >>> While we have many enterprise customers who use Kayako
    successfully and in really amazing and effective ways, serving small and
    medium size businesses (SMBs) is what we are geared up to do best.

    I could not disagree more. Kayako says they are geared up to serve SMB,
    but at the same time look at the prices they charge for their
    software. Kayako is some of the most expensive software out there. We
    have been very vocal to Kayako about how expensive their software is for
    such a small number of users (only 5). For example, Fusion only gets
    you 5 staff license and cost 2000 USD per year. How is this priced to
    the small business market? This is pricing out alot of SMB’s.

    When we first started using Kayako years and years ago Kayko software
    was reasonably affordable and user licenses were not an issue, there was
    actually great value in the product which is why we started using it.
    Infact we had unlimited user license until v4 when Kayako suddenly
    pulled all our staff licenses and limited us to 5 users. Kayako’s
    business model has changed for the worse, in my opinion, its all about
    money and they’ve lost track of the small business market – the
    companies like ours who helped build Kayako into what it is today.

    • Hey Darryl – thanks for your feedback and I am really glad you’re getting value from Kayako.

      More than 90% of our customers are SMBs, and the significant majority of them would very much fall under the ‘very small’ and ‘small’ business categories. They’re achieving great success with Kayako.

      Our customers use and trust Kayako to grow their business through great customer service. I think our current pricing is a relatively small investment to make in such a big objective with such fantastic rewards (happier customers, more loyal customers, more customers).

      We try our best to price and charge fairly. We aren’t in the business of squeezing money out of our customers to get rich. We simply want our customers to grow, and we want to help them grow. So that we are able to do that, and live up to our customer’s expectations, we have to grow ourselves: our support, our platform, our functionality.

      I understand that $2,000 may be a lot of money to spend in one go for our on-premise product, which is one of the reasons why most of our customers choose Kayako OnDemand, which starts at $24 per month per agent.

      That said, we are working on rejigging our plans, to include a plan that has a lower barrier to entry for very small businesses – stay tuned 🙂

    • Oops, I missed this bit of your post:

      Infact we had unlimited user license until v4 when Kayako suddenly pulled all our staff licenses and limited us to 5 users.

      When we launched Kayako 4 in November 2010, we invited all Kayako 3 customers to swap their license for an equivalent Kayako 4 one until 2012: were you able to take up that offer?

      • Darryl

        Hi Jamie,

        Thank you for this feedback and for not censoring my public post. I
        am very happy to hear you are considering fixing your pricing to
        allow for smaller companies to continue to use Kayako and to
        continue to renew their subscriptions each year.

        Kayako OnDemand is not a great solution for us because it requires
        you to host our data which is not a route we want to go, and it also
        breaks our local integrations. Kayako OnDemand was never something
        we wanted or something we bought into years and years ago when we
        first purchased Kayko.

        You say in Nov 2010 you invited users to swap – we never received
        any such offer, and all though we’ve mentioned this many times to
        your sales and support team nobody has ever honoured this for us and
        instead has focused on charging us as much money as possible (that’s
        how it feels).

        For all the great things you say about Kayako and the product I
        would agree with you, the product is great, your business model –
        not so much…. the business model of the old Kayako was alot more
        customer focused and priced for small and very small businesses.
        2000.00 per year is alot of money for a small business, and for
        those who fork it out like we were forced to to expect a further
        2000.00 each year is just poor business in my opinion.

        I used to love Kayko until all the changes and money grabbing
        tactics that started with Kayako 4. Please don’t take this as me
        bashing Kayako – just me giving you my honest feedback. I used to
        love Kayako, but that was until you put your prices thru the roof
        and took away all our user licences. It should not cost a small
        company 2k per year for Kayko – change this way of thinking and
        you’ll keep a loyal customer.

        • Daryll: I’m sorry we didn’t do a better job at communicating the Kayako 4 offer information. We tried our very best to reach everyone (the offer was open for 2 years after the launch of Kayako 4 on our website, blog, the customer portal, and we included it in all of the Kayako 3 end of life communications). But it seems we didn’t.

          Thank you again for your feedback on our pricing. I am sure that when we launch our new plans, we’ll have a plan focused on smaller teams that will be perfectly suited to you.

          • Darryl

            Thank-you for your follow-up, and for agreeing that
            communication could have been done better, but that said there still
            exists and opportunity for Kayako to right the wrongs of the past, and
            this goes a long way to support my first post about how it seems the
            Kayako business model has deteriorated to the point of CASH FIRST
            customer care SECOND. I have voiced numerous how I am unhappy with the way Kayko revoked our unlimited licenses and neglected to properly service our account when we were upgraded from v3, yet – each time it falls on deaf ears, and nobody is willing to do anything about it – are you Jamie? Your own sales people have required us to
            pony up another 3 thousand dollars PER YEAR, how is this Kayako working
            to serve the small business market and help them thrive and grow? In
            this exact blog post you advertise to be there for the small and very
            small business owner, but at the same time Kayako is exploiting long standing Kayko clients who prior to this were very happy with Kayako.
            With that said, I would like to ask you publicly ask what is Kayako
            willing to do here? Are you going to restore the licenses you took away
            from us, and are you going to fix the broken business model @Kayako, or
            do we have to cut our losses fire Kayako as a vendor and find a new
            vendor who will better value our long standing business relationship?

          • Darryl – bear with me, as I am confused about this bit:

            Kayko revoked our unlimited licenses</blockquote

            I think we might be crossing wires, because we haven't revoked any licenses. Just so we're on the same page, can you confirm my understanding:

            You purchased your Kayako 3 license prior to November 2010, and then we released Kayako 4 in November 2010.

            During the next two years, we gave existing customers an upgrade offer to Kayako 4. To take advantage of this offer, customers simply needed to renew their license for a year to exchange their license for an unlimited Kayako 4 license.

            After two years (which is when we shut down the Kayako 3 license systems), customers who had not renewed their license to upgrade to Kayako 4 could continue using Kayako 3 license. If customers decided they wanted to upgrade to Kayako 4 later, they could do so by purchasing a new license.

            Did you renew/upgrade your license between November 2010 and 2012? If you did, then you will have a Kayako 4 unlimited license and should still have access to it.

          • Darryl

            Jamie – simply put, like Paul we have been a loyal Kayko customer for Years. We were on v3 and had an unlimited user licence with you (Just like Paul posted below) – when we upgraded to v4, you guys revoked our unlimited user license and limited the number of account we could have. When we finally noticed this and brought it to the attention of Kayako (numerous times I might add) – we were told that we were offered an option to keep our unlimited license – we never received any such offer from you and though we keep asking for it to be honoured nothing is being done about it.

          • jmekayako

            Darryl: did you renew/upgrade during the upgrade offer, which was offered between November 2010 and 2012?

            If you did, you will have an unlimited Kayako 4 license which we were offering in exchange for Kayako 3 licenses as part of that upgrade offer to customers who renewed/upgraded in that time.

            If you didn’t renew/upgrade your license to take advantage of that upgrade offer, then you will still have your Kayako 3 unlimited license, as well as any new Kayako 4 licenses which you might have purchased recently.

            Finally, none of those licenses have been revoked.

            I hope this clears things up. If you would like to discuss further, or if you would like me to look into your account history in more detail, please feel free to drop an email to me: jamie.edwards@kayako.com.

            Many thanks

          • Darryl

            Hi Jamie, I did email you last week but you never replied to my email. As I have already stated – you guys said you sent out an email notice between 2010 and 2012 offering an upgrade and to keep our unlimited licenses grandfathered into Kayako 4 – I have repeatedly said that Kayako made no such contact with us. I have all our emails on record dating back the last 20 years and a searchable archive which nothing can be deleted from. Kayako never contacted us and never offered us this option, instead renewed us at Kayako 4 and revoked all our licenses. Now you guys want thousands and thousands of more dollars out of us EVERY YEAR simply to have more staff logins. Once again – I cant understand how this is Kayako looking out for Small Business – instead its just another way to squeeze more money out of us. As I said, I emailed you privately last week and you never replied to me, if you check your inbox you’ll see my email there, feel free to contact me if your willing to make this right with us. Had you guys priced your software more reasonably for smaller teams this would be a non issue and we likely wouldn’t have even noticed this bate and switch move in v4, but because your prices are so expensive and staff logins so limited you’ve backed us into this corner and it does not feel very good being a Kayko customer in 2015.

          • Darryl: I got your email about approving your comment on this blog which got stuck in the moderation queue (which I did!) but I didn’t see any others. I’ll check again.

            As I said before, we haven’t revoked any licenses: if you still want to access your perpetual Kayako 3 license (and your recently purchased Kayako 4 license), you can find both in your customer area on my.kayako.com. If you’re having trouble locating either, please let me know and we’ll help.

            This is one of the email communications (in addition to what we posted in the customer portal where you viewed and managed your licenses, on the blog, knowledgebase and support.kayako.com) that was sent out explaining what would happen and how to take advantage of the offer: http://us1.campaign-archive1.com/?u=91d815658282050d61ce67016&id=4341be5b61 (while we don’t have email records going all the way back, I can confirm this particular email was sent to you).

            Unfortunately, since we are now outside of the Kayako 3 to Kayako 4 license upgrade offer (offered between November 2010 and 2012), I cannot offer a license upgrade.

            However, I am truly sorry you missed out on the offer and our communications didn’t get through. As a token of that and as a thank you for your continued custom, I would be happy to provide you with a free year extension to your recently purchased Kayako 4 license. I’ll drop you an email about it.

          • Darryl

            As I said before, we haven’t revoked any licenses: if you still want to
            access your perpetual Kayako 3 license (and your recently purchased
            Kayako 4 license), you can find both in your customer area on my.kayako.com.

            ….. Jamie I think you and I both know that using Kayko 3 is not a viable option or a solution, I am not sure why you’d even mention that. You say that your records dont go that far back but that you can confirm the email was sent to me – this makes no sense to me.

            Unfortunately, since we are now outside of the Kayako 3 to Kayako 4
            license upgrade offer (offered between November 2010 and 2012), I cannot
            offer a license upgrade.
            …… Yes we keep coming back to this, everyone keeps saying sorry we didnt connect with you but too bad, its too late and nothing can be done about it

            I would be happy to provide you with a free year extension to your
            recently purchased Kayako 4 license. I’ll drop you an email about it.
            ……. Thank-you for being the first person to actually offer me something in terms of compensation, unfortunately this does not address the issue that I need more staff licenses and that at your current pricing – you’ve priced us way out of being able to justify the cost of using Kayako. I’ll take the free year in the hopes that by that time you will have fixed and published your pricing so that its affordable to smaller teams 15 and under.

            When will you be releasing your new pricing model?

            PS: I never received any email from you.

  • Paul

    I do tend to agree with Darryl – we bought Kayako ages ago, and so got the cheap upgrade to v4, and are happy with that.

    We did used to recommend it to all our customers (many of whom are IT companies themselves)

    But, there is no way we’d have even looked it for more than 10 seconds if it was at the current pricing. $468 per year for 1 member of staff is way too much for a small business to be happy with it. We don’t recommend it any more either, just because of the pricing.

    For 5 users, either $2000/r for a download version or $2340/yr for the on-demand version is way too expensive. You’d need to bring down the price to 20% of that for maybe 3 users to make it worthwhile for a really small company.

    (FWIW, Freshdesk’s similar product is $1500/yr for 5 users, or free for up to 3 users for a more basic, but still functional, edition)

    • Darryl

      Its even worse when your a Canadian company taking such a big hit on the USD to CAD right now. Aside from that extra hit I agree with you completely, other solutions like Freshdesk, Vision Helpdesk is another more affordable alternate solution as well. If Kayako fixes their pricing to be more SMB friendly I would say with them, but at these prices there is just no way. Paul, did Kayko honour your unlimited user licenses when you upgraded to v4? They took away ours and to this date have not given them back though we’ve requested numerous times.

      • Paul

        Yes, we still have an unlimited user licence, but we have always paid for maintenance/upgrades since we originally bought it in 2007, so we noticed when v4 came out. Unfortunately, I can’t remember the details of what happened back then. Maybe because we had active SUS (upgrades) we just got the upgrade to v4 automatically without noticing.

        • Darryl

          Interesting, we too kept renewing our subscription, but never noticed in v4 they took away out unlimited licences until after they already did it, now its been a big uphill battle to get them back, plus dealing with the huge price increases. I really hope they fix their business model soon, or we’re done with Kayako. Thanks for your feedback Paul and for letting Kayako know you feel the same way I do.

  • Jonathan M. Slivko

    We were actually forced to leave Kayako for another product due to the absurd pricing that they have for small teams ($4k/year for *up to* 10 users on a download license).

    We’ve looked at OnDemand as an alternative – however we opted to host things internally due to the security and privacy (and potential for hacking, etc.) issues surrounded such a shared platform.

    If Kayako’s pricing was more reasonable (perhaps if the pricing for download licenses matched that of the OnDemand product) – we’d consider a migration back to Kayako v4.

    However, as it stands now – no small sized team could afford such a cost for their help-desk (which is already the biggest cost center of any IT based business).

    I think I smell a new blog post coming on – entitled “When should you fire a vendor?”.

    • Hey Jonathan – good to see you here on the blog and thank you for your comment. I’m really sorry to hear that you left Kayako.

      We were actually forced to leave Kayako for another product

      When we launched Kayako 4, we didn’t change the price for our existing Kayako Download customers. We offered a Kayako 4 license on generally the same terms in exchange for their Kayako 3 license – a straight swap. We had this offer open for more than 2 years. If you were a Kayako customer before we launched Kayako 4 with our new plans, you’ll have been able to participate in this offer.

      Thanks for your feedback on our pricing. Daryll and I were discussing the same thing above. In fact, more than 90% of our customers are SMBs, and the significant majority of them would very much fall under the ‘very small’ and ‘small’ business categories. They are the exact definition of small sized teams and many thousands of them are in IT 🙂 They’re achieving great success with Kayako and get a lot of value from it.

      If Kayako’s pricing was more reasonable (perhaps if the pricing for download licenses matched that of the OnDemand product)

      Our OnDemand pricing is roughly the same as our Download pricing: Download for 5 agents costs $2,000 per year. OnDemand for 5 agents costs a little bit more than that.

      Or do you mean you would like to see a monthly subscription option for Download? In that case, the reason why we only offer Kayako Download on an annual subscription basis is because of the amount of support we give our Download customers as they get installed and started, and help with troubleshooting things that relate to their own systems.

      I think I smell a new blog post coming on – entitled “When should you fire a vendor?”.

      Haha – indeed. We were asking for that one! 😉

      • Jonathan M. Slivko

        Exactly – I meant doing a download license as a monthly subscription (ala Vision Helpdesk).

        For those that need an extra helping hand – you can upsell them to a professional services package for a couple of hundred bucks one time fee to cover any support costs incurred on your side (or just include it in a yearly prepayment cycle).

        As for your 5 agent license pricing – that’s all well and good – but, what happens if you need 6 agents? You need to pony up an extra $2000/year. Does that seem particularly fair to you? I’d rather see a model where you actually PAY for what you USE.

        If you don’t use it – don’t pay for it? Isn’t that the whole mantra behind Cloud Services these days? I think that should apply to cloud based software and services as well.

        • Jonathan: all fair points and food for our thoughts. We figured that it would be best not to split up our support levels into different tiers – we also don’t want customers to not have support when they need it, especially in those critical first 60 days.

          You’re spot on about the cloud services mantra. That’s where cloud wins and where we can offer that sort of flexibility for Kayako OnDemand (pay per agent per month, or per year, or per…), but not Kayako Download. I won’t bore you with the details, but to be able to offer Kayako as an on-premise product at all, we have to be a bit more strategic around pricing and who we are charging for what, and our fixed license levels are a part of that.

          • Jonathan M. Slivko

            “Hi Jonathan: all fair points and food for our thoughts. We figured that
            it would be best not to split up our support levels into different
            tiers – we also don’t want customers to not have support when they need
            it, especially in those critical first 60 days.”

            I’m not suggesting that at all – I’m simply saying that those that need an extended level of support (hand-holding) should be the ones paying for it – not the rest of us in the form of expanded licensing costs (for a product which is already expensive to begin with for companies just beyond the 5 user license, or in some cases even the base license in the case of a 1 or 2 person shop). This, to me, is just egregious and should be revised.

            “You’re spot on about the cloud services mantra. That’s where cloud wins
            and where we can offer that sort of flexibility (pay per agent per
            month, or per year, or per…). I won’t bore you with the details, but
            to be able to offer Kayako as an on-premise product at all, we have to
            be a bit more strategic around pricing and who we are charging for what,
            and our fixed license levels are a part of that.”

            …. and what about the people that don’t implicitly trust Kayako with their business data? Why should they have to shoulder the extra cost of the download license (while also at the same time paying for the server hardware/VM to run it).

            This is especially true in the wake of all of the recent and wide-ranging attacks and hacks across multiple industries. This also brings about the question of ‘who *actually* owns that data’ – does the customer or does Kayako?

            Furthermore – with regards to the OnDemand product – I don’t think there’s an actual written document anywhere outlining the methodologies, etc. that are being used to protect customer data (in a generic format which does not compromise security).

            In reality – Kayako doesn’t even own the servers that it uses for it’s on demand product – those are all leased from a 3rd party (SoftLayer) – which means that we’re implicitly trusting them (via Kayako) to maintain a solid networking/hardware environment.

          • Darryl

            I cant agree more, the security issues and data ownership issues alone are not something to be taken lightly, many companies like ours simply cannot rely on Kayko to host our data, and we should not be penalized for this. As Jonathan just said, we take on all the expense of running the server, managing it and all the costs which go alone with it, we should simply pay a base fee for the software with support as an optional upgrade for a couple hundred per year, none of the complex expensive limited user licenses which nobody asked for or needed.

          • Jonathan: Interestingly, it costs us much, much more to make Kayako available as an on-premise product, in terms of engineering and support (rather than a cloud-only application). If anything, Kayako Download should cost more than OnDemand (but that’s another issue altogether!)

            You have an excellent point regarding a lack of documentation on OnDemand security. Security is our #1 priority across our software and infrastructure. We definitely need to communicate this better – we’ll work on that.

            Many thanks

          • Jonathan M. Slivko

            “Jonathan: Interestingly, it costs us much, much more to make Kayako
            available as an on-premise product, in terms of engineering and support
            (rather than a cloud-only application). If anything, Kayako Download
            should cost more than OnDemand (but that’s another issue altogether!)”

            But yet – in some cases – the reverse is true (doing the math).

            Also – many other helpdesk solutions (both Cloud Based and On-Premise) have managed to hit and maintain price-points far lower than Kayako has (even at v3 pricing) for a product that’s usable and reliable — and at a price point that we can live with.

            I ask you: Why hasn’t Kayako, one of the original pioneers of the space been able to do the same for *both* of their product lines — or at the very least, offer some sort of ‘starter’ package, which you could then upsell to.

            For example – if you had a starter package which consisted of 3 users & unlimited departments — for a cost of say, $500-$1000/year *on either platform* – I think you could make a killing in the market. You could even set it up as a stepping stone to your standard license/pricing models (ala Microsoft Spark – where they give you a 3 year limit) where you’d still end up making your standard license fees since by that point – customers would likely be too entrenched to look anywhere else (nor should they need to – Kayako is a great product – just needs a great pricing model to go along with it).

            I understand that there’s a cost to maintain the brand (i.e. your salary and other marketing related expenses) and the underlying infrastructure (like the blog comment services, the blog itself, et. al.)

            You also keep mentioning the OnDemand (Cloud/SaaS solution) as the future of Kayako for small businesses.

            That’s all well and good – but, the problem with OnDemand is that it will not support many integrations, etc. which require access to the file system/DB to install and maintain (something that Kayako support hasn’t been willing to do at any point as a matter of policy) – thus essentially forcing people who want to take full advantage of the software to the higher license fees — as well as shoulder the cost of hosting and maintaining the environment for themselves.

            Furthermore – you cannot custom-brand the OnDemand Kayako URL — it will always be something.kayako.com – support has pretty much verified this time and time again – something that’s possible with desk.com, Zendesk.com and other direct competitors – some for free, and some at a fee-basis.

            At the very least – perhaps maybe have a hosted VPS offering w/ Kayako to take advantage of the cloud and the security that customers require and look for in an on-premise solution.

            If you could build that sort of solution and price it effectively – Kayako could grow larger than it is – full of happy customers – rather than some happy customers and some customers who are left out in the cold because they just don’t fit the model (or they’re stuck in a place where they don’t belong strictly in either model – like alot of us) or some customers who just end up feeling cheated at the end of the day.

          • Jonathan M. Slivko

            N.B. Zendesk offers a $20/year package for up to 3 users (all proceeds go to charity).

          • Indeed, and we are working on an OnDemand starter plan too, for very small businesses and tiny teams who only require basic conversation tracking functionality.

          • Thanks for all your feedback, Jonathan. Where to go next with Kayako Download is something we’re constantly evaluating. A rapidly diminishing number of our customers opt for it (a small percentage opt for Kayako Download today) and that we’re making ever more engineering compromises to make Kayako available as both on-premise and SaaS means it is increasingly expensive to offer. Across the market, a tiny number of very small businesses and SMBs are opting for on-premise solutions across the board. The preference is not just for cloud, but also for all the things that cloud-first enables.

            Also – many other helpdesk solutions (both Cloud Based and On-Premise) have managed to hit and maintain price-points far lower than Kayako has (even at v3 pricing) for a product that’s usable and reliable — and at a price point that we can live with.

            I think the kind of vendors you’re referring to aren’t comparable to Kayako. In the helpdesk software category specifically, there are some small, lower cost install-it-yourself helpdesk solutions out there, like Sirportly or Arctic Desk, but they’re also very small operations and sometimes side projects to other businesses or individual developers. Some businesses would be happy to rely on solutions like that – many others not. What is viable (whether that is in engineering or pricing) what is not viable looks very different at that end of the market to the Kayako end all the way to the Oracle end.

            That’s all well and good – but, the problem with OnDemand is that it will not support many integrations, etc. which require access to the file system/DB to install and maintain (something that Kayako support hasn’t been willing to do at any point as a matter of policy) – thus essentially forcing people who want to take full advantage of the software to the higher license fees — as well as shoulder the cost of hosting and maintaining the environment for themselves.

            Furthermore – you cannot custom-brand the OnDemand Kayako URL — it will always be something.kayako.com – support has pretty much verified this time and time again – something that’s possible with desk.com, Zendesk.com and other direct competitors – some for free, and some at a fee-basis.

            We’re working on bringing integrations and as much customisation to OnDemand as you can achieve with Download. You can already use custom domain names (instead of yourname.kayako.com), for free.

          • Jonathan M. Slivko

            “We’re working on bringing integrations and as much customisation to
            OnDemand as you can achieve with Download. You can already use custom
            domain names (instead of yourname.kayako.com), for free.”

            Not as of a couple of months ago — and certainly not with SSL.

          • jmekayako

            Yep – we’re working on hosted SSL support for custom domain names, but Kayako OnDemand customers have been able to use their custom domain names for quite some time now 🙂

          • Jonathan M. Slivko

            Someone should tell support that then.

          • Jonathan M. Slivko

            Though – realistically – SSL should be a basic feature available to everyone — on their own domain — which should have been released at the same time as when you allowed customers to use their own domain names (for non-SSL – which, is a joke – considering that Kayako is generally used to transmit sensitive business information between customer and staff – at many levels).

          • Jonathan M. Slivko

            “Across the market, a tiny number of very small businesses and SMBs are
            opting for on-premise solutions across the board. In the helpdesk
            software category specifically, there are some small, lower cost
            install-it-yourself helpdesk solutions out there, like Sirportly or
            Arctic Desk, but they’re also very small operations and sometimes side
            projects to other businesses or individual developers. What is viable
            (whether that is in engineering or pricing) what is not viable looks
            very different at that end of the market to the Kayako end all the way
            to the Oracle end.”

            …. and sometime smaller teams/individual developers can turn out better code than a fully developed/vetted team :).

            Edit: How are you setting those quotes?

          • Jonathan M. Slivko

            “I think the kind of vendors you’re referring to aren’t comparable to
            Kayako. In the helpdesk software category specifically, there are some
            small, lower cost install-it-yourself helpdesk solutions out there, like
            Sirportly or Arctic Desk, but they’re also very small operations and
            sometimes side projects to other businesses or individual developers.
            Some businesses would be happy to rely on solutions like that – many
            others not. What is viable (whether that is in engineering or pricing)
            what is not viable looks very different at that end of the market to the
            Kayako end all the way to the Oracle end.”

            I’m specifically thinking of Vision Helpdesk v4 (their latest release). They charge $150 *one time* per seat — and it more than does the job.

  • Paul R

    Hello All,

    I am really happy to see that a truly constructive conversation is taking place here between the company producing this product and the customers who are making use of it. It is nice to see a company address the feedback from their clients and also make the big choice to gear their product towards their niche market.

    Prior to opening my communications company, my primary job was as a waiter and I learned very early on that my greatest benefit I could give to my guests sitting at my tables was my level of customer service. Engaging, listening and providing solutions to their needs was what made the situation a win-win for both of us. They had a great experience by choosing our restaurant and I had a great experience receiving the “extra” gratuity in the end. Managing the experiences of my guests (clients) is the greatest skill I have brought in to my company with me.

    Having said all that, we are so much more then the product we produce and put on the table. My company is growing now and for the last year I have been looking in to a solution to handle the flow of my support system. I was recommended to check out Kayako, as I was told they had a great product and could handle my needs. And to be absolutely honest, the 2k price tag was the only thing holding me back from signing up. At the time I just surmised that the best thing to do would be to continue to grow my company on my own and then when the revenues were there, revisit this at that time.

    Genuinely if there was a smaller price point to allow me to make use of the product, I would have much preferred growing with you at the same time. When there is the opportunity to grow together, that is when we lay the foundation for a true Win-Win relationship.

  • Jonathan M. Slivko

    Also – as an aside, I wonder what percentage of our combined license fees, etc. go towards projects/initiatives like http://www.kayako.com/free-help-desk-software/. Just wondering.

    • A tiny, tiny percentage. In fact, this page is very much out of date (thanks for highlighting it! :-/) we no longer offer unlimited Kayako Download licenses, and only community support is available for our free licenses. We’ll get it fixed!

      • Jonathan M. Slivko

        You’re welcome ;).

  • Darryl

    Jamie, to be honest I feel the entire user license limitation and pricing should be revamped. For example, it should not cost 100% of your purchase price to renew your software each year. 20% of the purchase price each year would be alot more palatable and more inline with other software vendors (cloud and download base) are doing successfully. If we had to pay a one time fee to upgrade our number of staff seats, and say a 20% yearly renewal to keep the software current, that would be well in-line of what I would expect to be paying and I would hazard to say you’d have alot more happy small business customers recommending Kayako to their friends and colleagues.

    I truly hope Kayako will head the feedback and recommendations that all of us have been putting in here on this blog, as well as other online mediums. Nobody is disputing the fact that Kayako is a great product, we are all disputing the business model and the fact that Kayako is pricing us out of using the software while advertising to be there to help smaller companies grow and thrive.

    • Jonathan M. Slivko

      I agree — if the pricing model wasn’t as convoluted as a Microsoft Windows release and actually made business/financial sense — I might consider returning to Kayako.

      It pained me to have to leave Kayako – but, circumstances were such that paying 100% of my license fee every year weren’t really feasible (which is basically free money for Kayako for the most part — I’ll admit there are costs involved in support and continued dev, etc.) and sales wouldn’t really work with me on that in any large part – so, other options were needing to be investigated.

  • Chris K.

    I had the exact same experience with Kayako:

    I’ve been a loyal customer since 2005, when we purchased a full v3 license. I had it integrated flawlessly with many of our systems. Then, in 2010, I fell very ill and was out of work for a long time. When I finally got around to getting back to work (heart disease will not stop me), I explained my situation and asked if an exception could be made for my unique circumstances.

    The kayako sales team told me that I would have to pay full price (even though we’re working on open-source projects) and that there was nothing they could do. Furthermore, I can’t even access my old v3 license. All that money, albeit eleven years ago, was apparently for naught.

    So I would have to say that I am an example of how Kayako is more concerned about its clients with deep-pockets, and doesn’t care much about its small business followers, especially those who have been with them since the beginning.

    Kayako certainly fired me, and showed me the door.

Related articles
product launch at Kayako took almost two years to happen. Read on to see what we learned.Startup life

How to Royally Screw up a Product Launch — Twice

manager feedbackStartup life

How to Invite and Acknowledge Feedback as a Manager