RALEIGH — Doc Shufelt and Alan Pendleton, former execs with Republic Wireless, have spun out a new company called ArenaCX.
The startup recently raised $2 million in seed funding for its software platform that seeks to disrupt the customer service industry. Not surprisingly, Republic Wireless, a low-cost wireless provider, is a customer and says it has achieved a 32% reduction in total customer service costs since integrating ArenaCX into its internal support operations.
WRAL TechWire’s Chantal Allam recently had the chance to get an update from its CEO Doc Shufelt. Here’s what he had to say:
- Tell me about how ArenaCX, and how it got started.
ArenaCX is an AI-powered services marketplace for customer support labor where contact centers compete for a client’s business. ArenaCX works with clients to design balanced scorecards that align with their overall business objectives. Contact centers are scored on every ticket, chat, phone call, or social post according to that framework. ArenaCX’s software platform uses natural language processing, machine learning, and data analytics to identify the type of question being asked and the severity of the issue in order to route each ticket to the team – internal or external – best suited to successfully handle it. The contact center that performs the best earns an additional share of that client’s business the following week.
We designed, built, and honed ArenaCX specifically to serve Republic Wireless’s customers. Republic already had industry leading CSAT and NPS scores, as well as a significant cost advantage compared to other mobile providers, at that time using a mix of internal support agents and contact centers but we believed we could do even better. We had three primary challenges we were trying to address:
- Support demand volatility – requests for customer service support don’t come in on a fixed schedule; even though the daily average might be, say, 100 new tickets, on some days there will be 85, some days 110, and some days 250. The traditional full time employee-based support model makes it nearly impossible to match support supply (agent hours) to demand (tickets, chats, phone calls, etc) because supply is essentially fixed. That means that there are really only two states the system functions in: 1) too many tickets for the number of agents, which meant our queues would grow and our customers would have to wait; or 2) too few tickets for the agents, which meant that we were paying for agents that weren’t actually working.
- Lack of control over key levers – the macro objectives of the business would often change and we had little ability to respond effectively in the typical model. Sometimes the business would need to reduce costs and sometimes it would need to ensure exceptional quality (say, ahead of and during a product launch).
- Vague alignment with contact center partners – in the traditional model, we would have to commit to employing some minimum number of full-time agents at the contact centers
- At Republic Wireless the benefits were immediate – we realized significant cost improvements and every key support metric (like customer satisfaction scores and wait time) improved dramatically.We started to talk to other support leaders about the challenges they were facing with the traditional models and realized that many, almost all of them actually, were dealing with the same problems. We quickly recognized that there is a huge opportunity to disrupt an industry that affects essentially every consumer in the world and that we had not only figured out how to do it, but already successfully implemented it at scale. At that point, we knew we had something special.
- What were you doing at Republic Wireless at the time?
I was running operations and member experience for Republic and Alan was running our supply chain but I really wanted him to start focusing on support. We’d been talking a lot over the previous few weeks about how very basic supply and demand principles were almost completely missing from customer support. Alan’s experience in supply chain gave him a really clear view of what needed to happen—at its core, we needed to free ourselves from making long-term, static commitments in a world that was constantly changing; we needed to be paying for work actually done up to the standard we expected; and we needed to instill healthy competition among the teams delivering our support.
At the time, Alan was hesitant to fully propose such a radical departure from the norm, but as we riffed, his ideas started coming out and I was excited by the possibilities. He finally asked me directly, “Do you want me to tweak what we have now, or do you want me to blow it up and start over?” “Let’s blow it up.”
- What problem does ArenaCX solve?
The most exciting thing about ArenaCX is that it doesn’t just solve one problem for one stakeholder: it solves a number of problems for each key stakeholder, the brand (both their customer-facing teams, as well as Finance department), their end-users, and the contact centers serving the brand’s customers.
For brands, ArenaCX brings significant value:
- Gives support teams access to flexible, cost-effective labor when they need it;
- Provides deep insight and control into the support operation, allowing leaders to make adjustments to their support operation fluidly in response to demands from the business;
- Dramatically reduces the amount of management overhead by short-circuiting the ‘recruit, hire, train, manage, repeat’ cycle and puts highly tactical tasks like shift scheduling into the hands of contact centers (who are experts)
For contact centers, ArenaCX:
- Reduces customer acquisition costs by bringing brands to the contact center;
- Reduces the time and expense to sign and onboard a new customer by enabling a lightweight proposal process built on predefined rules-of-the-game for participating in the network – no more long negotiations over standard contract terms like liability and indemnification
- We make the rules of the game transparent so the contact center always knows what it needs to do in order to keep or increase its share of the brand’s business
For end-users, ArenaCX’s core competitive dynamic and flexible staffing improve the quality of the experience, letting end-users get back to their lives quicker and happier than traditional wait-on-hold models.
- Why did you decide to spin it out as its own company?
Chris Chuang (CEO of Republic Wireless) and I recognized early on that ArenaCX was a great opportunity born from the same innovative challenger DNA as Republic Wireless, but since ArenaCX isn’t a communications business like Republic Wireless and Relay, it just made more sense for it to be an independent company.
- How hard was it to raise $2 million in funding?
It’s never easy raising money at any stage, and executing a seed round in the middle of a pandemic introduced some unique challenges. We were only able to have two in-person meetings during the entire process, from initial pitch through close. We were very fortunate to find partners in Luke Roush and Jake Thomsen at Sovereign’s Capital who not only immediately understood how valuable ArenaCX’s solution could be for the entire support industry, but are also fantastic people who share similar values to ours. Incredibly, I still haven’t yet met Jake in person, but we’ve still been able to build a great relationship and finalize an exciting partnership.
- What will you use the funds towards?
We intend to deploy the funds to three primary areas:
Enhancing our product infrastructure – ArenaCX goes far beyond the matchmaking process between brands and contacts centers; it’s a sophisticated operations management platform that uses deep analytics to constantly tune the routing algorithms to ensure the best possible outcomes for our clients across the network of contact centers working on their account.
Build out the Partner network – A core tenet of ArenaCX’s model is the importance of matching supply with demand and as we bring on more customers, we also need to bring on more contact center partners to maintain balance. We are also planning to expand the variety of skills and domain expertise in our contact center network as well as further expanding geographical coverage.
Add more ticketing system connectors – One of the great things about ArenaCX, especially for small businesses, is that it layers on top of the client’s existing ticketing system with either no or minimal custom integration necessary. That makes it cost effective and fast as well as eliminating the need to engage often highly sought after IT and engineering time. Over the next 6-9 months we want to add native connectors to additional ticketing systems.
- Will you be hiring?
We are hiring engineering positions, starting immediately with a search for a Senior Software Architect. We will also be hiring for additional operations roles. People can view current openings here.
- Where will you be based?
ArenaCX was born in Raleigh, NC and we intend to stay headquartered here for the foreseeable future.
- How has the pandemic affected business?
We initially expected companies to avoid new engagements given the general economic uncertainty, but many businesses are looking for creative ways to bring their costs down while continuing serving their customers well. There are also a lot of industries, meal delivery services, for example, that are seeing a huge surge in support demand during this season. ArenaCX is well positioned to step in and help those businesses succeed. One of the hallmarks of our team and culture is our ‘serving spirit’ so we feel fortunate to have the ability to make a positive impact – for businesses and consumers – during these difficult times.
- Where to from here?
We will keep you posted.