Careers at Medallia
Medallia’s mission is to create a world where companies are loved by their customers.
In 2001 Amy Pressman and her husband Borge Hald were employed as consultants at Boston Consulting Group. One of her projects involved working with a group of senators on the issue of U.S. competition with Japan in the automotive and electronics industries. Pressman observed during her research that there was a strong emphasis on improving manufacturing quality in America. One of the ways companies were going about doing so was collecting detailed benchmark data. However, she noticed that there was little attention paid to enhancing the services sector in the same way.
Pressman believed that the Internet, which was coming into its own at the time, could be a useful and cost-effective tool for achieving this task. She felt that an ideal sector of focus would be hotels, since it is such a competitive field. They could obtain data to gauge their customer satisfaction levels not just with direct competitors, but also with other hotels in their brand. Excited by the idea, she and Hald left BCG to plan a company, called Medallia. They met with various hotel chains about conducting a pilot program. However, the 9/11 terrorist attack occurred shortly afterwards.
The event led to a downturn in travel and thus, hotel stays. Undeterred, the two focused on building the company. Their vision involved leveraging technology to assist service firms with self-improvement. The primary activity would be monitoring customer experience, as they felt it was a good barometer of company performance. While many businesses distribute surveys and comment cards, the information often does not come quickly enough for them to make a meaningful change. The two wanted to make the data operational by enabling the companies to track it in real time.
The couple launched Medallia in late 2001. The firm got off to a decent start, generating revenues by the start of 2002 and becoming profitable by the end of the year. Over the next decade it focused on gaining more customers and raising funds. Starting in 2012 it received significant investments from Sequoia Capital - $35 million in 2012, $20 million in 2013, $50 million in 2014, and $150 million in 2015. The infusions helped to foster more growth – Medallia’s revenues increased in 2013 by over 50%, and it garnered clients ranging from 7-Eleven to General Electric. It now has 300+ customers.
Benefits at Medallia
Business model of Medallia
Medallia has a mass market business model, with no significant differentiation between customers. The company targets its offering at firms across industries that wish to monitor customer feedback in real-time. Its customers are primarily in retail, financial services, hospitality, automotive, telecommunications, and the business-to-business space.
Medallia offers five primary value propositions: accessibility, convenience, customization, performance, and brand/status.
The company’s solution creates accessibility by enabling firms to collect customer feedback through a wide variety of vehicles, including paper surveys, e-mail surveys, mobile feedback, social media, web intercept, receipt-based codes, and live agent collection. It can also import data that has been gathered in other systems, including CRM, ERP, PoS, and e-mail.
The company’s solution offers convenience by providing a graphics-based and intuitive interface that is easy to understand and use. In addition, its “Ask Now” feature enables users to conduct concurrent real-world tests on multiple customer segments. Furthermore, it allows users to analyze data in real time. Lastly, it offers mobile apps so clients can use the solution wherever they are.
The company’s solution offers customization by making reports and actions personalized to individuals in a client firm according to their role (e.g., the CEO vs. someone on the front line). Moreover, each module has a configurable interface that enables users to change everything from customer segment to time period to organizational scope.
The company’s solution has demonstrated strong performance. Its implementation team can get clients up-and-running within 12 weeks, and has a 100% success rate. In addition, within the first year of system deployment, clients’ NPS scores typically increase by five or more points.
The company has established a strong brand as a result of its performance. It claims to be the fastest-growing provider in its market, with 50% growth between 2014 and 2016 alone. It has one of the highest NPS scores in its industry, and a 95% customer retention rate. It has 300+ clients, who include 8 of the 10 biggest hospitality firms, as well as the world’s largest insurer, automotive company, mutual fund company, and energy distributor. Specific clients include prestigious firms such as Macy’s, Four Seasons, Verizon, Honeywell, Sephora, Sodexo, and Mercedes.
Medallia’s main channel is its direct sales team, through which it acquires most customers. The company promotes its offering through its website, social media pages, participation in various forums and conferences, and the offering of public training opportunities.
Medallia’s customer relationship is primarily of a self-service nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features a “Resources” section that includes articles, assessments, benchmarks, brochures, case studies, eBooks, infographics, reports, videos, webinar recordings, and white papers.
Despite this orientation, there is a personal assistance component in the form of Medallia Institute, a paid training program for clients. The program features courses and workshops on customer experience management and best practices in the use of the Medallia platform. The company also provides phone, e-mail, and social media support.
Medallia’s business model entails maintaining and updating its platform for its clients.
Medallia maintains partnerships with the following groups:
Professional Services Firms – The company works with these firms to provide clients with executive-level guidance on the business process and organizational changes necessary to become a leading customer-centric enterprise. Specific partners include Accenture, Appirio, Cx Team, Deloitte Digital, Gallup, Ipsos, Lieberman Research Worldwide, TNS, Common Font, and Waypoint Group.
Application Technology Firms – The company integrates its offerings with those of these firms to extend its functionality and provide clients with complementary capabilities. Activities include simplifying deployment, certifying interfaces, and creating custom or industry-specific solutions. Specific partners include Bazaarvoice, Salesforce, TripAdvisor, and Genesys.
Medallia actively invites organizations to learn more about joining it in partnership by contacting its business development team. It provides education and support tools to chosen firms.
Medallia’s main resource is its proprietary software platform, which serves more than 300 clients. It also depends on human resources in the form of technology, sales/marketing, and customer service employees. Lastly, as a startup it has relied heavily on funding from outside parties, raising $255 million from Sequoia Capital in four rounds as of July 2015.
Medallia has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver are likely sales & marketing expenses, fixed cost. Other major drivers are in the areas of research & development and customer support/operations.
Medallia has two revenue streams:
Usage Revenues – The company charges a fee for access to its platform. Sales staff must be contacted for a pricing quote.
Training Revenues – The company charges for educational courses and workshops provided to clients and the general public.
info: Borge earned a Bachelor’s in Business Administration at University of Michigan and an MBA at Stanford University. He previously served as a consultant at Boston Consulting Group, an Associate at Morgan Stanley, and as a Financial Analyst at P&G.
info: Amy earned a B.A. in History at Harvard University and an MBA at Stanford University. She previously served as a consultant at Boston Consulting Group, a legislative aide on Capitol Hill, and an investment banker at Goldman Sachs.
info: Ken earned an M.S. in Systems Engineering at Virginia Polytechnic Institute and an MBA at Stanford University. He has held several executive roles in marketing. He oversees Medallia’s customer experience from product design to service.
info: Mike earned a B.S. at the University of California, Davis and an MBA from Santa Clara University. He previously served as a Partner at Khosla Ventures and as the CFO and EVP of Finance at Polycom. He heads Medallia’s IT, real estate, and finance functions.
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