Avoid The Long Grass With The Economic Buyer
You have done the hard work; you’ve identified a significant pain point that your solution can solve, you have qualified this over the course of the sales cycle and built your business case to demonstrate a compelling return on investment that is associated with your solution BUT…. your deal gets kicked into the long grass and you have to wait for next year’s budget allocation to get the green light.
The Economic Buyer is yet to prioritise your project!
No matter how long you spend qualifying the pain, nurturing the relationship with your Champion and having them shout from the rooftops how good your solution is, if you haven’t;
- identified the Economic Buyer
- related the pain and your solution to the company goals
- and established your project as a priority
you will remain in the long grass!
With the Economic Buyer being the ULTIMATE owner of the budget and decision maker, they can prioritise ANY spend which means prioritising projects within budgets and reorganising who gets the money first.
COMPANIES REPRIORITISE ALL THE TIME
Budget cycles are planning cycles. They are a way for a company to determine long-term spending plans and strategies, however, whilst ‘budget’ is often music to salespeople’s ears, in these budget cycles you have just as much to lose as gain.
Think COVID. It hit mid-March. Many companies with a December end of year had ‘budgeted’ for items and dished the money out into the company on January 1st. By March, CFOs clawed back these monies to prioritise COVID projects.
COVID was just the beginning too. Added to this we now have the many macro-level issues which have become the norm:
- raising interest rates
- supply chain issues
- the great resignation
- the cost-of-living crisis
- and, of course, the horrors in Ukraine.
Budgets are financial placeholders. With the changing landscape, finances are constantly assessed and deployed to make the best of the limited funds available for any organisation.
If you are in a budget cycle - longer than 6 months right now, I’d say that you just are not important enough to top-line growth and margins.
Or perhaps you haven't met the right person to make that link…
It’s really easy to not talk to the right person to convey your solution's importance to a company’s objectives. When we get a nod from anyone in an organisation, we can get fearful of asking too many questions or offending someone. However, to qualify is our job, so we need to push through this fear to ensure our message is understood to accelerate our deals.
When identifying your Economic Buyer we recommend a little red-herring-bingo, use these terms to trigger some extra qualification to find that ultimate decision maker:
- The budget holder. Great you think, they hold the budget therefore naturally they are the Economic Buyer.
The budget holder can, in some instances, have their budget taken away from them. Unless they are the ultimate decision maker, they are not the Economic Buyer.
2. The signatory. Just because someone has the authority to sign documents on behalf of the company, this does not make them responsible for signing off deals. Often a signatory is nominated for regulatory reasons and as a result, is far removed from the decision-making process.
3. The Champion’s Boss. Depending on you having identified the correct Champion in the first place, simply going one level above your Champion, without confirming that they are the ultimate decision maker, does not guarantee to find you the Economic Buyer.
4. The project sponsor. This makes sense insofar as the project sponsor is often in charge of running the business. However, we are not looking for someone who is running the business, we are looking for someone with the discretion to move budgets based on changing priorities, without having to look elsewhere for approval.
To maximise the chances of your deal getting done, it is therefore essential that you identify the ultimate decision maker – the person who can allocate, or reallocate budget spending without having to go to anyone else for approval.
QUALIFY, LIKE A CHAMPION.
By this point you should have already identified and started to build your relationship with your Champion, so use them. Your Champion works in the organisation, they should be able to provide you with some helpful information and clarify any mistakes you might have made when developing the org chart.
Ask them about the last project they had approved:
- What was the process they went through to get it done?
- Who were the other people involved in the process?
- How do these people relate to the Economic Buyer?
Use all of this information to help you verify the org chart that you made:
- Who reports to who?
- Who has responsibility for what?
- Who holds the pain that you have identified?
You will be looking for someone in the C-Suite who has a bonus aligned with board objectives.
You will be looking for the holder of the profit and loss, and therefore the holder of the pain that you can solve.
You will be looking for someone who talks about business outcomes during your business meetings, who needs to know, isn’t just interested to know, the return on investment.
The Economic Buyer will be focused on the benefit of solving the pain and will be acutely aware of the downside of doing nothing. They will be motivated by the value the solution will bring once implemented in their organisation. They will count this value in terms of cost saving or revenue generation, the impact on their P&L.
Just like you did with your Champion, once you have identified who you think is Economic Buyer, you will have to build a relationship with them:
✔️ Lunches, dinners, meetings, and calls are all vital to building trust
✔️ Clearly articulate your value in line with their [and their company’s] objectives
✔️ Be useful to them, provide them with customer & industry knowledge that they can’t get from within their organisation
✔️ Make connections for them - industry peers, customers, speaking connections
✔️ Do what you say you will and when you say you will
At each stage, just like you do with your Champion, qualify whether this individual is in fact the ultimate decision maker, and therefore your Economic Buyer or not.
If you start to get the impression that they will have to go to someone else for approval, requalify.
More often than not we start too low down the org chart.
If you think you have your Economic Buyer, just check how they relate to the executive board as that’s often who the real Economic Buyer is.
If you are interested in new ideas, inspir’em sales meeting exercises and lesson plans are available to continue the development journey of your teams. Contact us today to further boost your sales and see your revenue grow.
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inspir’em was founded in 2019 delivering coaching, training & consultancy to help individuals & sales organisations grow.
We provide solutions for:
- sales management training
- sales and leadership training
- Go-To-Market strategy
- MEDDIC best practices
- Hogan leadership assessments
- sales organisational design
- key hires/sales execution.
inspir'em run in-person MEDDIC sales management training programmes and have an online sales management course for those who wish to work at their own pace.
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