MEDDICC Decision Criterias How to Master and influence

In this article, you will gain a deeper understanding of how customers make decisions and how they use decision criteria to choose the best option. I will show how the requirements and needs of different departments can be found in the customer's request documents. You will get tools for how to influence the customer's decision criteria so that you and your solution become the customer's obvious choice. I will also give examples of how, long before the customer's buying journey starts, you can influence them in different ways. But the chapter contains a firecracker, perhaps your competitors have or are trying to influence the customer's decision criteria. You will therefore also receive a battery of questions to examine how your competitive situation looks like, so that you can make a decision whether you should work harder to win the business or should you withdraw.

Above and under the budget line

Consider that managers in an organization make two types of decisions, what to do and how to do it. Decisions about what to do are normally made by the managers who are part of the management team. They are involved in making the strategic decisions and allocating the money the business has to spend, they set the overall budget. These managers are above the budget line. They can also reallocate the budget at any time during the year. Their decision criteria are about return on investment, ROI, on meeting laws and regulations, on future-proofing technology platforms and on maximizing profit and cash flow. For listed companies, the share price and the valuation of the company are important decision criteria. The decision criteria are about which investments create the most value, in the short or long term. The investments should help the management team reach its metrics, KPI. Therefore, you must do your research so you know which metrics and thus which decision criteria the management team has to make decisions. If their decision criteria are not met, there will be no investment at all.

The managers at lower levels in the organization are below the budget line. These middle managers are given the task of carrying out the investments with their budget and at the same time reaching their targets, KPI. They decide how the investment should be made. After all, the managers have their existing operations to take into account. They need to find solutions that enable top management's decisions to be implemented in practice. Based on the management team's decision they choose the solution and supplier. Their decision criteria are much more detailed. They create all the requirements that you see in a request for quotation. They create basic requirements, conditions that a supplier must fulfill and should requirements, things that are good if the supplier can offer these, but they are not decisive. I have seen requests for quotations that contain more than 100 requirements that the supplier must be able to fulfill. The middle managers create decision criteria for making decisions about how the investment should be made, not which investments. Very often, middle managers take the initiative for new ventures. They see business needs better than top management. But if they are to get a budget and approval to carry out the investment, it must meet top management's decision criteria. Here there is often a gap, the middle managers focus on what a solution should look like and the top managers, those who sit above the budget line, on what investments should be made. If you mostly sell to middle managers who are below the budget line, you need to have control over both their decision criteria and top management's.

It is easy to lose sight of the big picture, what does the customer want to achieve and why? What metrics and decision criteria do managers who are above the budget line have?

How to know if you have a competitive advantage or not

I promised that you would get help with some questions to see if you have a chance to win the business or if your competitors influenced the customer's decision criteria so that you have already lost. It is never too late to challenge the customer's requirements specification. Some of the best salespeople I know always try to do that. If they are not successful, they refuse to participate in the procurement.

An example of this was when an IT company received a request from one of the largest food chains in the country. The client wanted a quote quickly on a very detailed proposal. The sales manager saw that it was a competitor that influenced the request and assessed the chance of winning as minimal. Furthermore, his technicians believed that the solution would not work very well. They decide not to submit a quote. The customer was surprised and contacted the sales manager's CEO to push for a quote. It was clear that the customer's buyer wanted to get more quotes but not let any supplier meet the management team.. But the CEO also said no. After several conversations, they agreed that the sales manager would put together a team that created an alternative solution. If the customer's management team approved it, they would be allowed to meet with the customer's management team. The management team liked the sales manager's innovative ideas. A few days later they had the meeting. The management team saw that their decision criteria could be met, that they could achieve their metrics. But it took a long time to get the middle managers to change their decision criteria, a whole year. The middle managers had very specific technical decision criteria that they did not want to deviate from. In the end, the sales manager and his team won the deal. The example illustrates the conflict that often exists between what the managers above the budget line want to invest in and the middle managers' decision criteria.

Here are some questions you can ask managers above and below the budget line

- Would you be completely opposed if we help you create a basis for a requirements specification based on our experiences from similar customers?

- It seems that your decision criteria are very detailed, how did you arrive at them?

- How did you do your research on suppliers and solutions before you decided to enter into a procurement?

- In the request for quotation there are several requirements for products and services that our industry colleagues can deliver, how do you assess alternative solutions?

- Would you say no to a proposal from us that completely turns the solution you asked for upside down?

- If you were to choose us, how would you end the collaboration with your current supplier?

But dont forget that people make emotional decisions and justify them with rational arguments!

Jens Edgren, Master MEDDICC instructor, CEO

[email protected] www.meddicc.se

Inspired by Mike Bosworth