Failed Case Interview, Sharing My Experience and Asking for Thoughts
Hi everyone,
I recently been through my first case interview. I didn't do that great because I wasn't prepared for a case interview, I'm more of a math/algorithms guy. I know that there's no right or wrong answer when it comes to case interviews so I wanted to share my experience here and see what you guys would have said/asked in that scenario!
The case was somewhat straightforward: "A large advertisement company has 100 sales reps and 100,000 clients. Suggest a change that would maximize profit." I was trying to suggest the sales reps can first focus on large clients who are using their service creatively. Then the sales reps can use those clients as success stories and market it to the rest of their client base. The interviewer asked, why focus on large clients when they're already large? And I couldn't defend my argument properly. I think they're looking for a more quantitative approach. What are your thoughts?
Change the attitude of your sales reps - Attitude is everything.
From a quant perspective if they charge a flat rate across the board or based on size adjust the rate up and down (more common) it would make more sense to have 5 clients each paying a 10% fee than 1 large client who might receive an 8% fee but in aggregate have the same bill and require the same man power. Inherently, if any of your smaller customers become large you would also have the opportunity for a strong relationship. Another thought, larger clients = more competition and less guarantee on actually generating profit. Just a few thoughts, but you could defend the case by stating the industry is very top heavy (I have no clue if it is), and that the smaller clients would not generate as much revenue since their fees just couldn't be as large. In a case interview they will always question your argument so just be prepared in every manor possible.
That is such a smart way of handling the question, thanks for enlightening me with your thoughts! With regards to your comment about "it would make more sense to have 5 clients each paying a 10% fee than 1 large client who might receive an 8% fee but in aggregate have the same bill and require the same man power."
Doesn't this depend on the client size? What if 8% fee of the large client is still bigger than the 5 smaller clients each with 10%. But I totally agree with the strong relationship point, definitely something that's worth mentioning.
Thanks again for your input!
Hi,
1) If the case was just that, there was definitely no right or wrong answer. If after some talk, he showed you some charts, it is a different story.
It is good to have an answer first. But before giving an answer straight way, you should probably have asked some question to know more about the case and understand: the revenue and profit breakdown, the selling channels, the clients location, etc… Try to understand the business. Which kind of services/projects the company offers? Are they selling just one service/product? Are all the reps able to sell all the services the company is offering? Starting with these questions, the interviewer will give you arguments for your answers.
You said it is an advertisement company but we don’t know which kind of advertisement they do? Who are the clients? Do they do radio advertisement? Television advertisement? Flyers?
2) I would say that it makes sense to focus on the biggest clients, and that's what most of the companies do. He just challenged your argument to see your thinking process. It doesn't mean that you gave a wrong answer. In the case interviews, I always felt that one of the difficulties was to understand when you needed to stick to your argument and when you should recognize that there is a better option. The interviewer will always challenge your argument. 90% of the time it is just to see how you are thinking. But 10% of the time, it is because you are going in a wrong way or because he is just waiting for a specific answer that will lead to the next question of the case.
3) Assuming that we only have the information you gave, you could have said that : Analysing the selling data, the company would probably find an 80/20 pattern. 80% of the revenues are made by 20% of the clients. Further, big clients probably involves bigger advertising projects and more projects, so more work for the sales team. So one rep will spend more time with each large client. So they could segment their clients doing different buckets: Large clients, medium clients, small clients.
So following your first idea: Instead of doing 100 sales reps and 100,000 clients so 1000 clients/rep, the company could do different client/rep ratio for each segment. Let’s say there are 10,000 big clients, 20,000 medium size clients and 70,000 small clients. It could be 20 reps for the big clients so 500 clients/rep, 30 reps for medium clients so 666 clients/rep and 50 reps for the small clients so 1400 clients/ rep.
I would second pretty much everything that nohelp2015 said. If this is a true case interview, there are usually some hidden details that will not be presented to you without asking questions. Interviewers are looking for how you get to an answer and not so much that you get to the exact answer they had in their head. If no additional details are presented after asking the question, explaining the considerations that you would need in order to come to a solid answer is as important as your final answer. That being said, you always need to confidently present a final answer to the questions and back it up when you inevitably get push-back from the interviewer.
Thanks so much for your response! Your insights are incredibly helpful. I just started reading up on case interviews and asking questions is definitely the key here. I didn't get the hint that the interviewers will always challenge my argument and took it as a negative sign, I should have defended my argument properly instead I kind of panicked. Thanks again for your insight!
Was this an interview for an MBB type firm? If it was, and you just spit out an answer you'd be dinged immediately. To Nohelp's point, you have no idea what the answer to this question is without diving deeper and analyzing what's going on in this business. I would start by looking at what we're selling, who we're selling too, and try to segment those out to find areas where improvements could be made.
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