Software company Medallia built its account list for 10 years before accepting venture funding in 2011.
Now the customer experience management pioneer has more money to back its operational and international expansion: a substantial $150 million growth equity round led by Sequoia Capital.
The total so far: $255 million.
Never heard of customer experience management? Don’t feel bad. The concept covers elements of traditional focus groups, call center interactions, account loyalty and “frequent buyer” programs, social media monitoring, and online reviews management. In fact, it’s tough to name a single competitor that covers so many of these different processes, and that’s what got its new backer so excited.
“This is a category creation company,” said Sequoia Capital partner Doug Leone, now a Medallia board member. “Billions of dollars are spent every year to figure out what customers think. Medallia helps companies engage in conversations, figure out what people want, and how to sell more.”
Leone connected with Medallia co-founders Borge Hald and Amy Pressman the old-fashioned way: a cold call. He stumbled across the company’s name while checking references during a CFO search and was curious. It took a while for him to book a meeting.
It’s easy to see why Sequoia’s team was intrigued. Former Netflix CMO Leslie Kilgore and ServiceNow CEO Frank Slootman are also directors. Medallia’s account list includes “hundreds” of companies including Airbnb, Four Seasons, Sephora, and Zurich Insurance Group. According to Hald, who is the company’s CEO, its message resonates particularly with companies in financial services, retail, telecommunications, and hospitality.
Four Seasons, for example, has used Medallia for the past six years to track interactions from the moment a guest is greeted at the door to the moment he or she checks out. It’s particular about this, for a very good reason. Consider this observation from the company’s founder, Isadore Sharp: “The outcome in our industry normally depends on the front-line employees—doormen, bellmen, waiters, maids, the lowest-paid people—and often, in too many companies, the least motivated.” Since it started using Medallia’s software, Four Season has used those insights to reduce negative survey responses by 38%.
The capital infusion disclosed Tuesday will support new product features, although Hald declined to be specific. You’ll also see the company do a lot more hiring in Europe. Medallia’s global workforce has already doubled in size over the past 18 months to more than 700 employees.
“We help companies be proactive with every customer, to make sure no customer is underserved or poorly served,” Hald said. “The system provides measurements and coaches improvements at every important touch point. It allows for discovery of ideas and rigorous testing of those ideas.”
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