Zendesk acquires Klaus for AI-backed quality assurance in CX
The customer service vendor acquires the vendor to build out its workforce management capabilities and bring a more integrated experience for users with both applications.
Zendesk's agreement to acquire Klaus, a vendor that uses AI for quality assurance management in customer service, fills a gap in the CX vendor's portfolio.
The cost of the pending acquisition, made public Monday, was not disclosed. The Estonia-based startup had raised $19.3 million since its founding in 2017. The deal is expected to close before the start of the second quarter.
Zendesk already offered an integration with Klaus that lets users use generative AI to automate quality assurance (QA) for customer service interactions between an agent and a customer.
The Klaus acquisition rounds out Zendesk's customer service offerings as a service desk platform, according to Forrester analyst Kate Leggett.
The Klaus product gives you everything that Zendesk has been missing.
Kate LeggettForrester Analyst
Zendesk already offers businesses an agent desktop portal with tools for service agents to help customers. With the Klaus technology, Zendesk is addressing QA for service, which supplies a key new set of capabilities, she said.
"The Klaus product gives you everything that Zendesk has been missing," Leggett said.
Along with the Klaus acquisition, Zendesk strengthened its workforce management position with its acquisition in June of another vendor, Tymeshift, an AI-supported workforce management platform, Leggett noted.
Tymeshift's technology automates scheduling, forecasting and data management processes for customer service agents, which enables agents to devote more time to interacting with customers.
"With Klaus, they've brought that agent quality management piece, and all of these together is a complete customer service solution," Leggett said. "It was a no-brainer acquisition."
Using AI to support QA
Klaus' tools aim to help contact center managers decrease resolution time and interactions per case and identify decreasing knowledge trends for further analysis. Klaus also uses sentiment analysis to better understand customers' emotions while on calls with agents. The company's tools can also identify cases in which more knowledge training and coaching would help improve agent performance during calls.
The acquisition is part of Zendesk's strategy to make QA more efficient and less time-consuming for customer service managers as they monitor a growing number of customer support interactions while increasing ROI, according to Zendesk.
Without AI assistance, service desk managers are limited to reviewing only as many cases as they can in hopes of having a complete understanding of the inefficiencies within the customer service processes.
But with AI support, the number of cases that managers can review multiplies because natural language processing (NLP) can serve up certain cases based on "key themes," according to Valoir analyst Rebecca Wettemann.
"NLP can quickly prioritize and bubble up key themes where agents may be having quality challenges, and they're getting a complete view of all the interactions to determine where they can improve quality, not just the ones that they happen to review in their limited review of cases," Wettemann said.
"So as a manager, rather than trying to sift through sometimes hundreds of thousands of pages of call records, I can instead have the AI do that," she added.
A more integrated experience for customers
The acquisition ought to enable customers of both Zendesk and Klaus to experience fewer vendor management problems with a more tightly integrated experience between the two systems, Wettemann said.
And there may be more prepackaged integrations and a team that incorporates both marketing and sales experts to help customers understand the value of the tools working together, she said.
"For folks that don't have a quality capability but have Zendesk today, it's a great addition for them," Wettemann said.
There are also benefits for both vendors' business strategies. For Zendesk, the acquisition brings more AI-supported tools to its portfolio and expands its capabilities into the QA market for workforce management. For Klaus, the acquisition will give it more name recognition with Zendesk customers.
"It's also a way to tap into a broader customer base and take advantage of Zendesk's footprint in the marketplace," Wettemann said.
A Zendesk spokesperson declined to comment on whether the vendor plans to roll Klaus into the larger company or leave it to operate as an autonomous subsidiary.
Klaus also has several other partners in the CX market, including CX and CRM giant Salesforce. These partnerships point to Klaus' usability and also good cultural alignment with Zendesk, Wettemann said.
"They've already had a chance to test the waters, ensuring that it's not just a technology fit but hopefully a good cultural fit as well, or one that they understand already," Wettemann said.
Where Zendesk could be headed
Zendesk's next move could depend on where its parent company, private equity firm Hellman & Friedman and Permira, wants to take it. Zendesk was acquired by the investor group for $10.2 billion in 2022.
Hellman & Friedman has been known to acquire publicly traded technology companies to take them private, which " gives them more freedom to make investments for growth -- such as acquisitions -- without the pressure of stock market expectations," according to Wettemann.
"Both the Klaus acquisition and the Tymeshift one of last year are examples of acquisitions Zendesk is making to build out its portfolio in hot areas such as AI and workforce management that are part of Hellman and Friedman's strategy to tuck in complementary technologies under the Zendesk umbrella and hopefully increase its valuation," Wettemann said.
Zendesk's next steps also likely depend on its strategy moving forward in the CX market, Leggett said. One path would be to buy a midmarket marketing platform to offer a full CRM system with sales and marketing services, she said.
Zendesk could also team up with an e-commerce company to offer digital-first customer service. The vendor could also continue on its current path of customer support.
"They've made the no-brainer acquisitions, and now they have to think about where they're ultimately going to go, and they could just stay where they are, and double down on their complete customer service suite, and that would be great," Leggett said.
Mary Reines is a news writer covering customer experience and unified communications for TechTarget Editorial. Before TechTarget, Reines was arts editor at the Marblehead Reporter.
