Zenarate: Why Volition Invested

The Growing Need for Customer Support Training

Customer experience is one of the central battlegrounds on which brands compete. With support often serving as the sole human connection brands have with their customers, 79% of business leaders recognize that investing in customer service is critical for companies to remain competitive. 50% of consumers will switch to an alternative product or service after a single unsatisfactory customer service interaction.

As chatbots progressively handle simple customer inquiries, reps increasingly handle more complex and sensitive questions. The rise of an omnichannel approach to customer support also complicates reps’ workflows, requiring higher levels of competence to navigate customer interactions.

Agents’ ability to skillfully resolve complex inquiries and deliver satisfactory customer experiences is determined primarily by the quality of training they receive. However, maintaining agent quality poses challenges as the industry norm for agent attrition ranges from 25% to 100% annually, and current training processes remain predominantly analog.

Traditional onboarding methods include classroom or Zoom lectures, static content-sharing, multiple-choice quizzes, and listening in on tenured agent calls (“nesting”). The shift towards remote/hybrid work makes it markedly more difficult to keep reps engaged during lecture-based training and complicates nesting sessions. Unsurprisingly, most agents churn during onboarding, as inadequate training leads to a lack of confidence that they have developed the requisite skills to succeed before their first live interaction.

The need for an alternative approach to customer support training is glaring.

Customer Expectations Demand New Agent Training Strategies

We are excited to announce our investment in Zenarate, a next-gen conversation simulation training solution for enterprise call center agents.

The company’s linchpin offering, AI Coach, serves as a virtual role-play partner for agents to rehearse various call types. Like a flight simulator for a pilot, reps can practice live interactions and receive immediate or post-interaction feedback based on their performance relative to the best-practice criteria defined by the client.

The solution possesses an impressive depth in functionality: 1) facilitating both verbal and written practice interactions; 2) simulating the required system navigation and workflow process to resolve a given query type; 3) evaluating the agent not only on the accuracy of their responses’ explicit content but also the use of appropriate emotional tone given the scenario’s nature. The platform provides agents with a highly realistic experiential learning environment, resulting in engaged, prepared, and confident reps providing more robust customer experiences.

Over the past few years, Zenarate accumulated an impressive base of blue-chip customers across multiple verticals and established itself as the leader in a disruptive category. With this strong foundation and an opportunity to capitalize on its first-mover advantage, the business partnered with Volition to further accelerate growth and fund additional product investment.

Why Volition Invested in Zenarate

We are excited to be Zenarate’s lead investor for its $15M Series A for several reasons.

Zenarate has found strong product-market fit solving a key pain point for customer support centers. This is evidenced by its 234% year-over-year enterprise client growth and best-in-class SaaS retention characteristics. Customers attest to the platform’s tangible ROI with 33% CSAT improvement, 52% faster agent speed-to-proficiency versus traditional training methods, and a 32% reduction in agent attrition. Across the board, the clients we spoke with plan to expand their usage of Zenarate, praising management’s long-term vision.

Zenarate has built a competitive moat in a new category. AI Coach is sold with no PII or integration requirements, resulting in the oxymoron of a short enterprise cycle. Its offering is viewed favorably compared to alternatives due to its realistic simulations, ease of use, performance reporting, and top-tier customer support. With this, the company has built strong inroads to leading Fortune 1000 enterprises, resulting in a proprietary data library of best call practices which will become the critical ingredient for facilitating call simulations as large language models become commoditized.

While the call center technology stack remains antiquated, with 60% – 80% on-premises, the market is reaching a long overdue inflection point. Call center cloud software is estimated to grow at a 20% CAGR over the next ten years, driven by hybrid work environments and the expected proliferation of AI-enabled tools. A 2023 survey by Zendesk found that 67% of call center leaders expect to increase spending on AI tools over the next year, with 50% expecting increases of at least 25%. Given that Zenarate sits at the intersection of call centers’ burgeoning adoption of cloud architecture and AI, it is poised to support the industry throughout this adoption curve.

Most importantly, we are deeply impressed with Zenarate’s leadership, CEO Brian Tuite, and Executive Chairman Rab Govil. The pair possess a unique combination of industry domain knowledge, business acumen, and technical expertise while having an ambitious vision to build a large, disruptive business.

We could not be more thrilled to partner with the Zenarate team and are excited to help the company navigate its next stage of growth.