Customer feedback management vendor Medallia’s announcement of its intention to acquire customer journey orchestration (CJO) vendor Thunderhead is the fourth acquisition in the customer journey orchestration space in six months. First, CSG acquired Kitewheel, followed less than a week later by Qualtrics’ acquisition of both Usermind and Clarabridge. And in October, Genesys announced its acquisition of Pointillist and Kitewheel, Usermind, Pointillist, and Thunderhead were all Leaders in The Forrester Wave™: Journey Orchestration Platforms, Q2 2020.

As my colleague Colleen Fazio writes in her blog, Medallia’s acquisition of Thunderhead is an expected response to the Qualtrics acquisition of Usermind last year. The acquisitions of Usermind and Thunderhead by customer feedback management (CFM) vendors, as well as that of Kitewheel by CSG and Pointillist by Genesys, reflect the diverse uses of CJO platforms for customer experience (CX) as well as contact center, marketing, and real-time interaction management (RTIM) — an angle my colleague Rusty Warner discusses more in his blog.

Journey orchestration platforms measure and model the impact of journey behavior on KPIs (e.g., revenue, customer lifetime value, and churn) through real-time data, decisioning, and tests with end customers (e.g., for individual customers and behavioral segments) or employees. They adjust to customer or employee behavior in near real time using existing predictive and rules-based delivery models to make decisions that improve the journey flow and drive desirable outcomes. All four acquisitions are part of a push to get closer to the customer and employee experience by focusing on journeys as customers’ lived realities.

There are three trends driving this flurry of acquisitions, and many of the acquisitions are efforts by vendors to tackle multiple trends:

  • The need to balance quantitative and qualitative customer insights and set them in a journey context to orchestrate real-time, contextually relevant customer experiences across the customer lifecycle. This includes the need to access richer emotional data and understand the role of emotion in customer experience to deliver empathy.
  • The need to connect customers to the right employees (agents, intermediaries, etc.), with access to the right insights, at the right time, to orchestrate more meaningful experiences that drive loyalty-eliciting emotions such as trust.
  • The need to bridge the gap between customer data, journey science, and journey design. Design researchers and data scientists both possess the tools necessary to derive customer insights. In most organizations today, the two personas work independently, which can lead to an incomplete view of the customer experience.

What does this mean for customer journey orchestration technologies and their buyers?

  • Greater clout in a previously emerging technology space. The CJO market has been characterized by small, nimble players innovating at a rapid pace. The acquisitions add clout to four key leaders in the CJO space, boosting geographic presence, vertical market focus, access to customer and employee profiles, and partner networks. Platforms like Usermind, Kitewheel, Pointillist, and Thunderhead will have the scale of resources and market reach to build on their journey innovation, provided they keep their focus on customer journeys.
  • More scalable use cases that impact the ROI of CX and bridge silos. During the pandemic, journey orchestration helped firms respond to changing customer behavior in real time. It has been critical to crisis preparedness and recovery. If acquirers Qualtrics, CSG, Genesys, and Medallia help to resolve misunderstandings in relation to the right time to invest in CJO and proactively help bridge organizational silos (e.g., with hackathons and tailored insights for specific functions), CJO could reach critical mass, improve experiences, and deliver business benefits.
  • More differentiation from competing technologies … Further differentiation from RTIM, cross-channel campaign management (CCCM), and customer data platform (CDP) platforms by combining (1) journey taxonomies (and time-series or path analysis to visualize moments of truth, bright spots, and friction points in journeys) with (2) rich emotional data across purchase, marketing-led, and customer service journeys (full customer lifecycle) and (3) journey behavior analysis for individual and groups of journeys across the customer relationship.
  • … but also a danger of diluting the journey-centric focus. Many of the acquisitions highlight the “journey” as the secret sauce: “Every business outcome — good or bad — is driven by a journey,” according to Qualtrics’ press release, and according to Medallia, “Thunderhead will strengthen Medallia’s ability to power individualized journeys and conversations at scale, across all online and offline channels.” Much will depend on how and at what pace CJO is integrated. We hope the journey context doesn’t get lost in translation.
  • Opportunities to gain market share for pure-play CJO platforms during the integration phase. Depending on the pace of integration for the four combined entities, the continued focus on customer journeys, and the readiness of the market to embrace CJO (on steroids), there is an opportunity for smaller, more pure-play CJO platforms to win market share.

To read about the impact of the acquisitions on CFM vendors, check out my colleague Colleen Fazio’s blog. For a perspective on the impact on RTIM, read my colleague Rusty Warner’s blog.

Do you have any questions about this acquisition or about what’s next in customer journey orchestration? I look forward to sharing more in my research and discussions with Forrester clients via inquiry.