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Freshworks Sales

To empower businesses of all sizes to deliver exceptional customer and employee experiences by becoming the leading CX/EX platform globally

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To empower businesses of all sizes to deliver exceptional customer and employee experiences by becoming the leading CX/EX platform globally

Strengths

  • PRODUCT: Unified customer and employee experience platform with AI capabilities enabling cross-sell opportunities across the full product suite
  • PRICING: Disruptive pricing model that's 50-60% more affordable than competitors, making enterprise-grade software accessible to SMBs
  • EXPERIENCE: Intuitive user interface and implementation requiring minimal IT support, reducing TCO by up to 40% compared to legacy solutions
  • GROWTH: Strong net dollar retention rate of 107% indicating successful customer expansion and low churn rate (under 15%)
  • MARKET: Global presence with 66,000+ customers across 120+ countries providing diversified revenue streams and reduced market risk

Weaknesses

  • AWARENESS: Low brand recognition compared to established enterprise players like Salesforce and ServiceNow, especially in North American markets
  • ENTERPRISE: Limited penetration in large enterprise accounts with only 20% of revenue coming from customers above $50K ARR
  • PROFITABILITY: Ongoing challenge to balance growth investments with path to profitability; negative operating margin of -8% in recent quarters
  • TALENT: Difficulties attracting and retaining specialized sales talent for complex enterprise deals against competitors with stronger compensation models
  • INTEGRATION: Product integration challenges across acquired solutions creating friction in cross-sell motions and unified customer experience

Opportunities

  • AI: Capitalize on Freddy AI capabilities to differentiate products and create value-driven upsell opportunities across the customer base
  • MID-MARKET: Expand mid-market segment (100-1000 employees) where Freshworks has price and usability advantages over enterprise-focused competitors
  • PARTNERS: Develop stronger channel partner ecosystem to scale distribution globally, currently only 22% of revenue comes through partners
  • VERTICAL: Create industry-specific solutions for high-growth verticals like healthcare, fintech, and manufacturing to increase deal sizes by 25-30%
  • PLATFORM: Expand developer ecosystem and marketplace integrations to increase platform stickiness and create network effects

Threats

  • COMPETITION: Increasing downmarket push from enterprise players like Salesforce, ServiceNow offering SMB-focused solutions at competitive prices
  • CONSOLIDATION: Market consolidation with larger vendors acquiring point solutions to create integrated offerings that compete directly with Freshworks
  • ECONOMY: Economic uncertainty causing extended sales cycles (increased by 18% YoY) and budget scrutiny, particularly in SMB segment
  • SATURATION: Maturing CRM and helpdesk markets with 75%+ penetration in developed markets forcing price competition and margin pressure
  • INNOVATION: Rapid AI advancement requiring significant R&D investment to maintain competitive feature parity with larger, better-funded competitors

Key Priorities

  • FREDDY AI: Accelerate AI integration across product suite to differentiate offerings and drive upsell opportunities
  • MID-MARKET: Realign go-to-market strategy to focus on mid-market expansion where Freshworks has clear price and usability advantages
  • VERTICALIZATION: Develop industry-specific solutions for high-potential verticals to increase deal sizes and competitive differentiation
  • PARTNERSHIPS: Expand channel partner program to extend market reach and reduce direct sales acquisition costs

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To empower businesses of all sizes to deliver exceptional customer and employee experiences by becoming the leading CX/EX platform globally

OWN THE AI ADVANTAGE

Differentiate through AI that solves real business problems

  • ADOPTION: Increase percentage of customers using Freddy AI capabilities from 38% to 60% by end of Q2
  • INTEGRATION: Complete Freddy AI integration across 100% of product suite with consistent experience and capabilities
  • AUTOMATION: Launch 20 new industry-specific AI workflows that deliver measurable 30%+ efficiency gains for customers
  • ROI: Develop and publish 15 customer case studies demonstrating quantifiable business impact of Freddy AI implementation
WIN THE MIDDLE

Dominate the underserved mid-market opportunity

  • ACQUISITION: Increase mid-market customer acquisition by 40% vs previous quarter through targeted campaigns
  • SPECIALIZATION: Create 5 industry-specific solution packages with vertical-tailored messaging and implementation
  • ENABLEMENT: Train 100% of sales team on mid-market value proposition and competitive positioning against enterprise vendors
  • VELOCITY: Reduce average sales cycle for mid-market accounts from 65 days to 45 days through simplified buying process
SOLVE FOR SPECIFICS

Create industry solutions that deliver superior outcomes

  • HEALTHCARE: Launch healthcare-specific solution bundle with HIPAA compliance and 5 industry workflows by end of Q2
  • MANUFACTURING: Develop manufacturing solution with ERP integrations and industry KPIs, generating 15 new logos
  • FINANCIAL: Create financial services package with compliance features and secure messaging, closing 20 new deals
  • TEMPLATES: Build 25 industry-specific templates and dashboards that reduce implementation time by 40%
MULTIPLY OUR REACH

Scale distribution through strategic partnerships

  • RECRUITMENT: Add 50 new solution partners across target verticals with proven expertise and customer relationships
  • REVENUE: Increase partner-sourced revenue from 22% to 30% of total new business pipeline by end of quarter
  • ENABLEMENT: Launch partner certification program with 200+ partners certified on core products and vertical solutions
  • CO-SELLING: Implement joint go-to-market programs with top 20 partners, generating 100+ qualified opportunities
METRICS
  • Annual recurring revenue (ARR): $610M
  • Net dollar retention rate: 110%
  • Customers >$50K ARR: 1,850
VALUES
  • Do What Matters
  • Think Customer
  • Own Your Success
  • Be Real

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Align the learnings

Freshworks Sales Retrospective

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To empower businesses of all sizes to deliver exceptional customer and employee experiences by becoming the leading CX/EX platform globally

What Went Well

  • REVENUE: Q1 2023 revenue grew 20% YoY to $147.7M, exceeding analyst expectations by 3.2%
  • RETENTION: Net dollar retention improved to 107%, up from 103% in previous quarter, showing stronger expansion within existing accounts
  • FREDDY: AI adoption exceeded targets with 38% of customers now using Freddy AI features, up from 22% a year ago
  • ENTERPRISE: 40% increase in customers with ARR >$50K, showing improved upmarket traction

Not So Well

  • PROFITABILITY: Non-GAAP operating loss of $11.6M (7.9% of revenue) missing target of 5% loss
  • CASH: Cash burn increased 15% QoQ due to higher sales and marketing expenses that didn't deliver proportional growth
  • CHURN: SMB segment churn increased to 22% annually due to economic pressures and competitive pricing from enterprise players
  • SALES: Average sales cycle extended by 18% year-over-year, impacting new customer acquisition velocity

Learnings

  • FOCUS: Broad market approach diluting impact; need for greater focus on ideal customer profile and vertical specialization
  • PRICING: Value-based pricing showing better results than feature-based pricing in competitive deals
  • PARTNERS: Channel partners delivering 30% higher LTV customers than direct sales, indicating opportunity to expand partner program
  • PRODUCT: Customers using multiple products have 62% better retention, highlighting importance of cross-sell initiatives

Action Items

  • SEGMENTS: Realign go-to-market strategy to focus on mid-market (100-1000 employees) where win rates are 2.3x higher than enterprise
  • INTEGRATION: Accelerate cross-product integration to improve multi-product adoption and increase customer stickiness
  • PARTNERS: Expand channel partner program with improved enablement and incentives to drive indirect revenue from 22% to 35%
  • VALUE: Develop vertical-specific ROI models and messaging to accelerate sales cycles and improve competitive positioning

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To empower businesses of all sizes to deliver exceptional customer and employee experiences by becoming the leading CX/EX platform globally

Strengths

  • FREDDY: Proprietary AI assistant Freddy integrated across all products providing unified intelligence layer for customer and employee experiences
  • ADOPTION: 25,000+ customers already using Freddy AI features with 80% reporting significant productivity improvements
  • SIMPLICITY: AI capabilities designed for business users with no-code/low-code interfaces driving 3x faster adoption than competitors' solutions
  • DATA: Rich proprietary dataset from 66,000+ global customers enabling high-quality AI training across diverse use cases and industries
  • PRICING: AI capabilities included in core product offerings without significant premium pricing, driving higher adoption rates than competitors

Weaknesses

  • DEPTH: Less sophisticated AI capabilities compared to enterprise competitors who are investing $100M+ annually in AI R&D
  • TALENT: Challenges attracting and retaining specialized AI/ML engineering talent against tech giants offering premium compensation
  • INTEGRATION: Inconsistent AI feature availability across product suite creating disjointed customer experience and adoption barriers
  • MESSAGING: Unclear AI value proposition and ROI metrics compared to competitors with well-defined AI-driven business outcomes
  • CUSTOMIZATION: Limited ability for customers to customize AI models for specific business needs compared to enterprise-grade platforms

Opportunities

  • AUTOMATION: Expand AI-powered workflow automation to deliver 40%+ efficiency gains for routine customer service and IT support tasks
  • INSIGHTS: Develop predictive analytics capabilities to help customers identify churn risks and expansion opportunities from interaction data
  • PERSONALIZATION: Create industry-specific AI models for key verticals that deliver 2-3x more accurate predictions than generic models
  • ECOSYSTEM: Open AI capabilities to developers to create marketplace of specialized AI solutions that extend platform value
  • COPILOT: Introduce AI assistants for sales, support and IT roles that can reduce onboarding time by 50% and increase productivity by 25%

Threats

  • COMMODITIZATION: Large language models becoming commoditized with open-source alternatives reducing barriers to entry for competitors
  • INVESTMENT: Enterprise competitors investing 5-10x more in AI capabilities, creating potential feature gap that widens over time
  • REGULATION: Emerging AI regulations requiring significant compliance investments and potentially limiting certain AI applications
  • EXPECTATIONS: Rising customer expectations for AI capabilities that exceed Freshworks' current development and deployment velocity
  • SPECIALIZATION: Vertical-specific AI startups creating purpose-built solutions that outperform horizontal platforms in specific use cases

Key Priorities

  • FREDDY EXPANSION: Accelerate Freddy AI integration across all products with consistent capabilities and user experience
  • VERTICAL AI: Develop industry-specific AI models for key verticals that deliver superior accuracy and business outcomes
  • AUTOMATION VALUE: Create clear ROI messaging and case studies showing measurable business impact of AI-powered automation
  • DEVELOPER ECOSYSTEM: Open AI capabilities to partners and developers to extend platform value through specialized solutions

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AI Disclosure

This report was created using the Alignment Method—our proprietary process for guiding AI to reveal how it interprets your business and industry. These insights are for informational purposes only and do not constitute financial, legal, tax, or investment advice.

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