Sequoia Capital has doubled its bet as the sole investor in customer experience platform Medallia, adding another $50 million to its previous $55 million.
This represents one of Sequoia’s largest investments in a single company. “Their transformative impact on how the Fortune 1000 manages customer experience is a testament to their relentless user focus,” Sequoia partner/Medallia board member Doug Leone said in a statement.
“Customers are making buying decisions [with] a wealth of information,” Medallia co-founder and President Amy Pressman told VentureBeat. This means they often do much of their own self-marketing and self-selling, and a modern company’s role is increasingly to listen to what the self-driven, would-be buyer wants — and give it to him or her.
Medallia’s platform listens to the customer by capturing and analyzing feedback from sites, social networks, contact centers, and other channels. It then uses those clues about what the customer wants to help companies guide their approaches to customer experience, through strategy, personalization, and marketing/ad campaigns.
“It’s a fundamental need of business always to understand what their customers need and then embed that into their organization,” she said, adding that Medallia’s effort to instill that understanding into a company’s DNA is a key differentiator from competitors.
“I don’t think of [what we do] as being customer experience,” she said, but as “making companies customer-centric.”
Customer-centricity and “voice of the customer” are frequently heard phrases in the marketing world these days. It’s technology- and business-speak for the kind of customer interaction that is common among countless small, brick-and-mortar businesses, as their proprietors chat with customers, learn their likes and dislikes, and respond accordingly.
“This is a fundamental business need,” Pressman said. “What your customers think.”
Customer listening platforms like Medallia (and such competitors as InMoment or Allegiance) are trying to return that customer focus to online-focused businesses, and to scale it for huge organizations.
“Technology is rehumanizing” companies, Pressman told us. “When we implement that, it changes the culture of the company.”
Founded in 2001, the company didn’t receive any outside investment until 2012, Pressman said. “We were initially focused on [customer experience in] the hospitality industry,” she said. But after 9/11, the hotel business plummeted as people stayed home, and the company didn’t take funding until Sequoia came in with a first round of $35 million when the company entered its second decade.
The most recent funding will be used to beef up Medallia’s software-as-a-service platform to handle an increased volume of information about customers and feedback from them. The text analytics engine, essential for detecting many kinds of voice-of-the-customer sentiments, will be enhanced for real-time analysis. And the company’s offices in the U.S., the U.K., Europe, Asia and elsewhere will be expanded.