IBM Acquires Tealeaf Technology, Big Blue Takes Customer Experience Big Data Plunge

By Peter Bernstein May 02, 2012

Who needs Big Data? IBM believes chief marketing officers (CMO) do. In fact, they’ve placed an interesting bet with the announcement of a definitive agreement to acquire Tealeaf Technology Inc., a renowned source of customer experience analytics software. 

The acquisition fills an important gap in the IBM Smarter Commerce initiative, aimed at giving enterprises a full toolkit of capabilities to gain the insights they need to improve their ability to deliver superior customer experiences. 

Reading the tealeaves

“The need to deliver a seamless mobile experience has become increasingly critical to CMOs with global online commerce expected to hit $1 trillion by 2014 and mobile commerce $200 billion by 2015,” IBM noted in its description of the acquisition.  

With over 450 customers around the world, including 30 of the Fortune 100 companies (predominately in the financial services, travel, retail and communications services sectors), Tealeaf provides a full suite of customer experience management software which records and analyzes a customer’s Web site and mobile interactions.  As stated, mobile was a key ingredient here.

 IBM will now be able to give CMOs insights the ability to discern patterns and anomalies across all of their touch points that will allow them to:

  • Improve customer support
  • Transform site usability
  • Tailor marketing campaigns
  • Increase online conversion rates

“Marketers must continuously deliver a better customer experience on both the Web and mobile devices to meet the expectations of today's empowered consumers,” said Craig Hayman, General Manager of Industry Solutions at IBM. “With these new capabilities from Tealeaf, we can not only provide chief marketing officers and other marketing leaders the qualitative insights into how customers actually experience their brands, but show them how to react in real time across marketing, sales and service.” 

Rebecca Ward, Chairman and CEO at Tealeaf, spoke to the great fit with IBM: “Tealeaf's patented technology can be deployed into a business’s current environment with no needed modifications so they begin capturing customer data and delivering optimal experiences immediately.”  She added, “IBM Smarter Commerce is the perfect fit for Tealeaf and further establishes IBM as the leading partner for businesses looking to succeed in today’s fast evolving environment.”

Turning insight into actions

As I noted in a previous article about SAP’s targeting of enhancing the customer experience as a critical area of growth for them and their customers, being able to extract critical information from a variety of enterprise databases, and turning the insights generated through the application of sophisticated analytics, pays off well for investing in Big Data. 

Human knowledge as augmented by machine learning can provide enhanced understanding of how customers experience an enterprise’s people, products, practices and products. Being able to move quickly in a world where the competition is a click away and customers are increasingly both well-informed and fickle to respond to very fluid market requirements, e.g., improving the customer experience is now seen as a top priority.

The customer is truly king, and knowing as much as possible about them and being able to predict and act upon changing tastes and desires means covering all of the bases in terms of collecting and analyzing critical data. It is emerging as the best, and possibly the only way to accomplish the goals of IBM’s Smarter Commerce solutions to improve:  revenues, customer satisfaction, customer service productivity and profitability.

Regardless of the fact that every enterprise has a CMO to be catered to, there are now over 8,000 executives worldwide with “customer experience” in their titles. Their job descriptions vary a bit but at the end of their day their mission is the same – keeping customers happy and buying and look across the entire enterprise for the best-practices that are optimized to achieve that goal.

One thing not noted in the announcement that highlights why covering all of the bases and doing the integration that can give CMOs and others actionable insights is that there are now IBM has been a leader in not just the solutions area, but in the research that validates the importance of all of this. 

Sending a message

Financial details of the acquisition were not disclosed.  The deal is subject to customary closing conditions and regulatory clearance, and IBM says it is expected to close in the second quarter of 2012.  Tealeaf will integrate with IBM's Enterprise Marketing and Management (EMM) Group. As an indication of how important being a dominant player in the customer experience market is to IBM, Tealeaf is part of $3 billion that IBM has already invested in building up Smarter Commerce, which includes the previously acquired assets from Coremetrics, Unica and DemandTec.  

With the addition of Tealeaf’s ability to capture and analyze mobile interactions, IBM has sent a strong message to other companies working in the space – a holistic approach is going to be table stakes.

Edited by Braden Becker
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