What is the advantage of providing your users with a custom subdomain

ZenDesk, Azure and many other Paas/Saas providers give their users a custom URI containing the user's company name or app id as a subdomain, as in acme.zendesk.com or app1.azurewebsite.net and I'm curious about how this is useful.

It's cool to have your own subdomain prepended to a provider's service but are there benefits to doing this other than the cool factor? I'm particularly interested in the benefits to the provider, not the customer. Does this approach used with partitioning resources (client [x] goes to server [y], client [a] goes to server [b])?

Also, is this commonly handled with server redirects or does one need to manage a DNS zone file?

This seems like something I'd like to do with my app so I'm trying to learn how I can make the best use of this approach but it's really difficult to find the information I need amongst a hoard of irrelevant search results.