Press

Medallia to Acquire Stella Connect

It seems like a lifetime ago when we started Stella. We were sitting in a 15’ x 15’ windowless room in a mini-storage building in lower Manhattan. That was March 2010. Since then, our ambition has always been to create a world with better customer service. We believed that providing a superior customer experience would be the ultimate differentiator for a business, and we’ve spent more than 10 years relentlessly pursuing ways to help companies measure and improve on that front.

What started as a customer service ratings and data company has evolved into a market-leading SaaS solution that drives customer service performance for hundreds of world class businesses including Walmart, Mercedes-Benz, Quicken Loans and Warby Parker to name a few. These companies share in our belief that customer-facing employees are not resources to optimize but rather human beings to inspire and engage in a way that leads to great customer experiences.

Our belief is that customer-facing employees are not resources to optimize but rather human beings to inspire and engage in a way that leads to great customer experiences.

 

Today, we’re beginning a new chapter as we announce some big news: Medallia (NYSE: MDLA) is acquiring Stella Connect. You can read more about it in the press release here.  Given our long journey to this point, we thought we would take this opportunity to reflect on where we’ve been as well as share our excitement for the road that lies ahead. 

In 2010, we set out to build the first objective rating system for measuring the customer experience (CX) of online retailers. Ecommerce was exploding with growth at the time, yet we found there was limited transparency for consumers about which online stores would actually deliver on their promises of “outstanding customer service.” At the same time, traditional retailers were rapidly expanding their ecommerce operations, customer service teams and fulfillment centers to meet the online demand. They were looking for ways to increase their ecommerce IQ and learn how to keep up with best-of-breed online players like Zappos, Diapers.com and Amazon (before Amazon acquired both businesses).

We discovered we could solve both problems by unleashing mystery shoppers as well as callers, emailers and online chatters to become customers of thousands of online stores and compare their shopping and customer service experiences. In other words, we built an operation to stress-test the ecommerce customer experience.  Out of this operation, we produced proprietary research that contained on-the-ground insights for each online store. It was a new and compelling data set.

On the consumer side, Google became the main distributor of our customer service ratings via Google Seller Ratings. On the retailer side, we built a syndicated data product called Stella Metrics. Retailers could leverage our platform to access data and insights that would help them measure, benchmark and improve their customer experience. 

By the end of 2015, despite several years of growth, we discovered we may be missing the bigger opportunity. First, many of our retailer clients were struggling financially as they found it increasingly difficult to compete with Amazon. Second, our data licensing model made it difficult to align our pricing with the value and scale of the organizations using our data. And finally, when we visited with users of our solution in contact centers, we found that many were using elements of Stella Metrics to drive agent engagement, recognition and motivation of their frontline teams. Stella Metrics was never designed for that use case and would not be able to address that challenge at scale. These learnings showed us that we were in fact missing the mark…but we had insights on where we needed to go. 

It became evident that the bigger, more important problem standing in the way of our ambition to create a world with better customer service was how to supercharge individual frontline agents to be at their best every day, with every customer interaction. Enter Stella Connect. 

We launched Stella Connect in 2016 as a simple solution to drive frontline engagement with agent-focused customer feedback. Our central focus was humanizing the agent in any customer service team, big or small. It was clear out of the gate that our early users loved Stella Connect, so we knew we were on the right track. We expanded the product quickly to help with other day-to-day functions that boost agent engagement and performance like coaching, 1:1s, rewards and recognition, and real-time QA. 

With the backing of our investors and assistance from early adopter customers on Stella Connect, we decided to make the dramatic leap in pivoting fully into this new opportunity. After six years of tireless work and tens of millions of dollars invested, this pivot was anything but straightforward. We eventually sold the original business to a company established in that space, and since then Stella Connect has blossomed, emerging stronger as a result. It would never have been possible without the passion and energy of our team as well as the trust and support of our customers and investors.    

Fast forward to today, Stella Connect is among the fastest growing software companies in the customer service performance space, and we are fortunate to work with the most innovative service teams in the world. Our success and growth over the last few years has validated our belief that frontline agents should be managed like the vital, high value professionals they are, not like cogs in a machine. Our Net Promoter Score (NPS) of 85 is a best-in-class marker of the satisfaction and trust we have built with our clients.    

As we look ahead, we are focused on both expanding our capabilities and scaling our reach. Organizations around the world are seeking out ways to better support, manage and engage their remote or WFH customer service teams, and we are in a position to massively help by way of joining forces with Medallia. As we have gotten to know their team and their vision, it’s clear Medallia shares our view on where the customer service world is headed and the kind of impact our combined solutions can have in solving the industry’s growing needs and challenges.  

Medallia is the global leader in capturing, analyzing and actioning on experience data from both customers and employees. Stella Connect was created at the intersection of the customer experience and employee experience, so it’s easy to see how well we fit together. Medallia’s ability to capture signals and feedback from anywhere, along with their deep expertise in AI and analytics for business leaders make for the perfect complement to Stella Connect’s focus on driving action and performance on the frontlines. Not only do we have highly complementary technologies, but we also share similar company values and an obsessive approach to enabling the success of our customers. We could not be more excited about what we will be able to accomplish together. 

Building this company has been an incredible journey. We would not have made it out of that mini-storage building without our amazing team, our inspiring customers and our supportive investors. Thank you for your support and trust over the years!  And we definitely wouldn’t have made it very far without each other there to support one another, push the pace and drop a joke or two through the inevitable startup tribulations. 

We’re on to the next exciting chapter with Stella – we can’t wait to see you there!   

Jordy & John