Medallia CEO signals end to old-world surveying

Leslie Stretch of Medallia says digital platforms are needed to understand the customer experience in real time.

Today, the ability to deliver product and service experiences that delight customers is almost universally acknowledged as a key aim of CEOs in progressive companies. CX has risen to prominence for lots of reasons. Nobody wants to compete on price because then China wins (or, maybe soon, Indonesia, or another of the "Mighty Five"). An increasing number of us make mobiles our preferred channel and we expect every interaction to be as good as Amazon or Uber. Also, mess up and it's everywhere in Ultra HD on review sites and social networks.

However, a sceptic may wonder if a lot of this is paying lip service, given the shoddy realities of interacting with many brands. Leslie Stretch is the CEO of Medallia, a company that has risen high on the crest of the CX wave. But even he agrees that this is a market that has a long way to go before we call it mature. "Most of them are still back in the annual survey days," he says, estimating that perhaps the number of companies taking CX deeply seriously is around 700.

He should know. Founded in 2001, Medallia enjoyed a float that was hotter than July when it launched on the public markets last summer and on the day we talked had a valuation of about $4.5bn before stocks tumbled on coronavirus fears. Its success is down to its platform for identifying signals relating to customer satisfaction, scanning sources such as online review sites, social media or, yes, those ‘olde worlde' surveys. The idea is to have a live take on exactly what your customer thinks of you: the good, the bad and the meh.

Vital signs

"We raised a great war chest in the IPO and we're acquiring," Stretch says, with the name of the game being to add more detection signals to gain broader, deeper insights. An example: the acquisition of video feedback firm LivingLens.

Stretch was made CEO in August 2018 but the company was founded by the husband-and-wife team of Borge Hald and Amy Pressman. "Other companies built surveys [but] they built a platform that consumes survey output and other signals that we emit in our daily lives as we travel, stay in hotels, consume and buy things," Stretch says.

Sorting through and separating wheat from chaff and signal from noise is a complex challenge and Stretch says his company is investing heavily under the hood in areas such as security, data privacy, performance, scalability, communications and in-memory processing.

"The CX job, we think, is the hardest job," he says. "Once you've cracked that, everything else feeds into it: employee experience, digital, e-commerce… everything is a subset of this overarching domain. It's where the money is, where the quickest ROI is for our customers."

The "return on customer experience" as one Medallia customer describes it, is enormous but it's really part of a broader set of experiences companies are attempting to improve for employees, patients, guests and citizens. In fact, Stretch sees one sweet spot in identifying "the juncture between the employee and customer, and understanding the impact on customer: how do I know the environment is right for the employee?"

You can't do this with surveys because markets and people change too quickly but with an experience platform listening to signals the results of this "three-dimensional radar on customers" are powerful: higher retention, loyalty and more innovation and brainstorming.

In comparison, surveys represent "a big waste of time and money" and a potential source of misleading data. Take an annual survey of fast-food company employees and they will no longer be employees by the time you've parsed the data. But apply digital tools and you have live insights, including big screens detailing exactly what customers think of you if you have the stomach for it. The scope is vast, potentially and Medallia recently became FEDRAMP certified so US citizen experience data can be the next lens.

Stretch says he doesn't really care what the total addressable market size is because opportunities abound at great brands, terrible brands and brands that have lost their way. The technology should also evolve with deep learning applied to analyse text, for example. "There's this insatiable appetite to know more and more and more," Stretch says.

With characteristic Scottish self-deprecation, Stretch calls himself "an old geezer… 30 years in software". But he has collected quite a few experiences in that time, starting out in Edinburgh, moving south to England to work as a programmer and then working for Silicon Valley icons. He earned his spurs at Oracle ("Larry Ellison is the greatest software capitalist alive") and Sun Microsystems ("Scott McNealy was a visionary: cloud computing, utility computing [were] ideas before their time.") Later, he was CEO at CRM firm Callidus Software before selling it to SAP for about $2.4bn in 2018. Now resident in San Francisco, he's also a big admirer of his neighbour, Salesforce CEO Marc Benioff, praising his support of a tax hike to support the local homeless as "really rare … he's maintained his connection with society".

"I'm a benchmarker," he says. "I benchmark all the time." The comments and experiences of customers are shaping the Medallia roadmap, charting a course to identify and capture more signals and more experiences. And listening intently, all the time.