On January 20, 2022 Medallia announced that it has entered into a definitive agreement to acquire Thunderhead, the leader in customer journey orchestration, or like the press release states it, leader in every-channel journey orchestration.
The transaction is expected to close in the first quarter of this fiscal year.
The stated benefit for customers is that “with the combination of customer experience insights and journey orchestration, organizations can have a single view of the customer journey and use real-time interactions to improve experiences and loyalty.”
Thunderhead is expected to “strengthen Medallia’s ability to power individualized journeys and conversations at scale, across all online and offline channels, helping Medallias’s thousands of customers continue to increase their brand loyalty, sales and growth.”
Thunderhead founder and CEO Glen Manchester says that “the acquisition heralds the next era of customer experience. We pioneered the idea of the customer operating system, with our closed-loop customer engagement platform powered by continuous listening, feedback and learning, all actioned through our unique fusion of journey orchestration and real-time interaction management (RTIM). With Thunderhead, Medallia can ensure that every single aspect of the customer lifecycle – marketing, commerce, sales and service – will be a seamless, relevant, and frictionless experience.”
Tl;dr
Watch my snap analysis – or read on.
The bigger Picture
The name of the game is CX (platform). As with any platform game, it is crucial to have enough scale. On top of this, the markets for CDP, segmentation, personalization, real-time interaction management and customer journey orchestration are converging.
A CDP provides the persistent and transactional data foundation that allows the delivery of the additional value that insight and action can deliver. Structured and unstructured customer feedback are important components for the identification of the next best action or next best (part of) the conversation. This incremental delivery of value is what the diagram below demonstrates.
Figure 1: From CDP to CJM
There are not many independent leading customer journey orchestrations left. Leading specialists have been Kitewheel (now part of CSG), Usermind (recently acquired by Qualtrics), Pointilist (just acquired by Genesys). All these acquistions have been “in the name of” CX. There are some smaller specialists like Roojoom, BryterCX, InQuba. These are VC funded. I guess their owners are already looking forward to further consolidation. Alterian, NICE, Coveo or Engage Hub are no journey orchestration specialists but offer a broader portfolio of solutions.
Figure 2:Journey Orchestration Players based upon Forrester Wave Q2/2020
My PoV and Analysis
The delivery of this additional value through making incoming data actionable is exactly where the value of the combination of Medallia’s and Thunderhead’s capabilities lie. Medallia has its roots in the enterprise customer feedback (i.e., service) world whereas Thunderhead works pretty much agnostic to the company’s functions.
Thunderhead had and has a series of strategic partnerships with Microsoft, Salesforce, and now SAP, that did not prove to be overly successful. Especially the partnership with Salesforce went sour when Salesforce acquired Evergage to become its new “Interaction Studio”. The partnership with SAP is still active and it remains to be seen how it is affected by this acquisition. On the other hand, I am still asking myself in how far Thunderhead benefited from these partnerships.
Thunderhead pioneered journey orchestration based upon behaviours. To my knowledge, the company is the only one that follows this approach (happy to be corrected, shoot me a message). In addition, Thunderhead is the only company that does not only have real-time interaction management capabilities but is also – as the only company – recognized as a leader in both, real-time interaction management and customer journey orchestration.
In brief, Thunderhead is a diamond in the market, maybe a not yet fully polished one, but still.
I am not surprised about the fact that Thunderhead did get acquired, just by whom. I would have thought that it’ll be a bigger company than Medallia. But then, both companies are swimming in the CX pond, which is full of sharks. This makes a privately owned company with a unique technology like Thunderhead, which naturally has fairly limited finances, an interesting candidate. As for Medallia, the Thunderhead technology helps the company getting out of the enterprise feedback and voice of the customer corner and into the open of the CX pond.
Qualtrics is the main competitor of Medallia and the Qualtrics acquisition of Usermind may very well have forced Medallia’s hand. This is on top of Genesys moving out of the call center corner and repositioning as a CX brand as well. Medallia itself having just been acquired by a finance investor should have helped.
Which also raises the question what benefit lies for Thunderhead in this acquisition. More and/or better/bigger customers? For one, there is the hopefully soon to be productized integration into the Medallia stack as a key data source and information/action destionation. Many interaction points and therefore journeys short and long can be informed and fed with the combined solution set.
Second, and that is probably more important, in the words of a colleague: Thunderhead desperately needs a CDP type of solution, a system of record, underneath its stack. One of the challenges always was an overlap with the partner solutions while not offering the foundation. This can now be changed. Medallia can act as a system of record.
It is up to the joined forces of Medallia and Thunderhead to deliver the possible synergies. And there is no reason to expect that this is not going to happen.
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