Businessmodel of Medallia

Customer Segments

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.

Value Proposition

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.

Channels

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.

Customer Relationships

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.

Key Activities

Medallia’s business model entails maintaining and updating its platform for its clients.

Key Partners

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.

Key Resources

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.

Cost Structure

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.

Revenue Streams

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.