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McClatchy-Tribune  05/23/2014 8:41 PM ET
Q&A: Medallia CEO Borge Hald, on gauging customer sentiment [San Jose Mercury News :: ]

May 23--PALO ALTO -- It's hard to imagine anything more essential to a corporation than knowing what customers think of it. Yet many companies have barely a clue about that because they're using outdated and often painfully slow methods for gauging consumer satisfaction, according to Borge Hald.

So in 2001, Norwegian-born Hald -- whose first name is pronounced BUR-gah -- and his wife, Amy Pressman, founded Palo Alto-based Medallia, which employs various ways to gather that feedback in real-time and incorporate it with other information to help businesses continually know how well they're doing.

After a few tough years, Medallia is growing fast. Its sales increased by more than 50 percent last year, it plans to boost its 380-person workforce to about 600 by the end of the year, and it boasts customers ranging from Mercedes-Benz to 7-Eleven to GE. In an interview that was edited for length and clarity, Hald talked about his company and the plans he has for it.

Q: Why is what you do important?

A: The world is becoming more and more customer-centric. Consumers have an easier and easier time, before they even engage with a company, to understand how good that company is. They do searches on the Web, there are reviews everywhere and it's just easier to find information than it ever has been. So by allowing ongoing feedback from your customers to the organization, you are continuously innovating and making sure that you are delivering value on an ongoing basis.

Q: How do you get that feedback?

A: Let's say you've come into a store and you've purchased something. We will almost immediately send you a quick email asking for some information about your experience. How was it? Give a star rating. Write a couple of comments. And it immediately goes back to the store and they see it.

Q: Is email the primary method you use?

A: We have so many different ways that we can get the feedback. It really depends on the customer. For example, 7-Eleven has an app that consumers can go into a store and use to get coupons and stuff. There is now a way in that app for 7-Eleven to ask for feedback. We will then grab that feedback for analysis. We also scrape the Web for reviews. TripAdvisor. Google+ local. Pretty much any review site you can think of. We have about 50 review sites on a global basis that we get data from. And then there is operational data. For example, a company's contacts center has data like first-call resolution, call length, waiting length, those kinds of things. We grab it all and pull it into our databases.

Q: As an example of poor consumer feedback, you mentioned a bank employee you met who had no idea how he was evaluated in his customer interactions. What did he tell you?

A: He said, "By the third week of the month I get a number. And if the number is higher than 8, then I get a bonus. If the number is less than 8, then I don't get a bonus. And that's all I know. I think the numbers are collected, not that month, but the month before. I don't know what the problems are. I don't know who the supposed customers are. I just know it affects my bonus. And if it gets too low, I'll get fired." That seemed like a really bad system.

Q: What generally happens when the companies you deal with see the feedback you help gather?

A: If you have a strong sort of purpose-driven culture in your company and if you provide your people with a real-time voice of the customer, it's almost impossible to fail. They are so hungry for that information they will find ways to make it useful. The Medallia system will bring immediately the voice of the customer to that person in that bank. They'll see who it is and what they said. In fact, most of our companies, if they get a low rating, will either mandate or encourage someone in that branch to call the customer and talk to them. The first thing they do is fix the problem.

Q: Do you use your customer-feedback techniques to determine how well your own employees are serving your customers?

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