QUALTRICS: SCALING AN INSIDE-SALES ORGANIZATION Case Solution
Why inside sales have worked so well up to now and why revisit the structure now?
The inside sales model has worked successfully for Qualtricsuntil now and there are a number of the reasons for this. First, at the time of the evolution of the organization, this sales model was not planned at all and it was thought out of necessity. The inside sales model had been built based on three key elements.
First, the phone based customer acquisition process to save money and call potential clients through phone with a single sales person, Ryan Smith. Second, the compensation culture of the company was variable which enabled the model to manage the cash flow for the company. Third, the nail it then scale it strategy worked well through which Ryan first target the academic clients and in this way Ryan built a beachhead among the top business schools.
The inside sales model of the company was quite flexible and it gave its employees a considerable amount of autonomy. As long as the managers generated results, they were given free rein to develop their own sales teams. In addition to this, a trial and error approach had been adopted by Ryan under whom Ryan allocated the resources to Watkins, who treated the resources as his own. Under the trial and error approach, there were six core attributes, which had emerged by the unique sales team organization.
These core attributes included uncapped commission, which motivated the employees, a multi-level sales model that included four levels of the sales team, a focus on hiring the top performing local graduates and bringing in diverse range of the reps to reach out to the customers. The use of the war rooms to diagnose the issues where everybody was given equal voice regardless of their tenure and finally a reliance on radical transparency. A transparent culture evolved at Qualtrics where the progress of each of the employee was monitored through an odometer and the objectives set by Ryan cascaded throughout the organization.
Another important factor for the success of the inside sales model of Qualtrics is the Trojan Horse customer acquisition strategy. Under this strategy, Ryan’s team was able to close small deals with small units within the larger organizations. The Ryan’s philosophy behind this strategy was that multiple small deals would help the company to close out and convert into one large enterprise scale model. These all reasons show that why the inside sales model has worked so well up to now. However, now the company was looking to scale its operations on a global platform through diversification in the offerings, extended market, extended customer base and targeting the larger clients. Therefore, it was important to revisit the structure and to decide that whether the same inside model could be adopted or a new model should be developed.
Which of the approved options would you propose to Agostina and Smith? Why? Work out detailed operational implications of your preferred option?
There are two approved options, which are available to Agostina and Smith, and these are described briefly below:
Option 1: Scale the Existing Sales Model
Under this option, Qualtrics would continue with its current inside sales model as the entrepreneurial culture was critical to the success of the company. There was internal support for this model because under this model a large team of inside sales reps would be fortified and expanded and additional experienced reps can be recruited to fuel the phone based sales model of Qualtrics.
Option 2: Introduce a large scale sales team
Under this option, an experienced, field sales team would be introduced as this model has proven to be effective for large transactions and for customers with complex needs. In addition, under this model he field sales team would be distributed around the world and business would be conducted through in-person and virtual meetings. All the sales team members under this model would have large deal experience. A higher salary would also be paid to all the existing reps to motivate them.
Recommended Option & Operational Implications
After analyzing both the models, it would be more appropriate to go ahead with option 2 model as Agostina had extensive experience with managing large field sales teams and this would help to reduce the risk of the path. This model would be more effective if we look at its operational implications. For instance, under this model the company would be able to serve large deal clients around the international markets of the world such as Ireland, Dublin and other parts of Europe. In addition, with the expanded product suite and increasing credibility in the marketplace, therefore, the addressable marketplace had to be extended and the new model reps would have the experience to achieve this. Lastly, the new model would help the reps to sell one off products as well as comprehensive platform solutions to large clients, which make a large field sales team model more appropriate......................................