Understanding Your Customer in Three Minutes with the MEDDIC Method

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Avoid ineffective internal business meetings.

Most companies believe that using CRM systems gives them a real insight into business activities, but in reality, the data entered into these systems is often deliberately processed due to human nature. This is a major reason why many CRM implementations are not very successful. A simple and effective method is the MEDDIC methodology. MEDDIC is a way to pulse-check customers in six key directions, truly understanding the problem.

Accumulating knowledge and then applying it is the fastest and most effective method. As Sun Tzu's Art of War states: "The victorious strategist only seeks battle after the victory has been won, whereas he who is destined to defeat first fights and afterwards looks for victory." Business activities done without understanding the customer are a waste of time and money, and most importantly, they squander the opportunity cost.

Time is the most expensive cost, not just for salespeople, but for the company as well. Ten years spent sharpening a sword is in vain if the direction is wrong, and once you turn back, the opportunity may no longer exist.

This is why I want to take some time to explain the MEDDIC method, hoping to help everyone avoid some detours and provide a little assistance.

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MEDDIC is a checklist of 6 business actions, similar to taking a pulse in human body diagnostics.

First, what is MEDDIC?

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l Collect METRICS.

l Who is the Economic Buyer?

l What are the Decision Processes?

l Influence the Decision Criteria.

l Identify Pains - What are the customer's real pain points?

l Build Champions - Establish supporters within the customer's power base.

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Today, let's talk about what Metrics are.

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Note that Metrics should be plural; the more, the better.

Simply defined, they are the quantifiable (or qualitative) benefits produced over time by existing customers using your company's products or services. Ideally, these should be quantifiable in monetary terms.

For top executives or CXOs, this indicator is the most intuitive. It also maintains customer confidence for future purchases.

For non-existing customers, use metrics from other customers for illustration, or use existing customers for references and recommendations.

Having solid metrics supports ongoing purchases from existing customers. Concrete numerical benefits pivot internal opinions towards your company's products and services.

Case Studies Demonstrating the Effectiveness of Metrics

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Case Study 1:

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In 2018, a steel company in Chiayi wanted to purchase casting mold flow analysis software. The general price range for this software was between 2 to 6 million NTD, depending on the modules. We utilized the approach of a phone conference between the vice president of a leading foundry in Hsinchu and the high-level executives of the steel company. During this call, the existing customer explained the benefits experienced before and after using the software, gaining the confidence of the new client.

This project secured an order within one month after a single demonstration.

Case Study 2:

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A 5-year maintenance contract for a large electronics manufacturer.

After software implementation, one challenge is that Taiwanese companies often find it difficult to continue purchasing annual maintenance services from the second year onwards.

We used the monthly maintenance records from our engineers, the record of issues raised by the customer each month, the engineers' solutions, the time spent, and the quantifiable benefits achieved after solving the customer's problems.

These data were used to create a maintenance proposal, convincing the company's senior management to agree to a multi-million NTD five-year maintenance contract.

These examples illustrate the effectiveness of Metrics. However, to understand a customer's metrics, one must first put in the effort. This involves understanding the design-to-manufacturing process, identifying the benefits that your product and service can provide, and then thoroughly communicating and building trust with key users. Because these Metrics results can help Key Users gain internal recognition and opportunities for promotion and salary increases, this represents a tangible mutual assistance beyond just 'soft touches' like offering coffee and beverages.

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2. How to Gain the Trust of Economic Buyers (EBs)?

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Economic Buyers (EBs) are generally perceived as the high-level clients who sign orders, such as General Managers or Chairpersons.

Why are EBs important? The answer is obvious: they are the ones who sign the orders.

However, salespeople usually cannot access EBs initially, unless through personal introductions or references. So, how can we get an opportunity to interact with these EBs?

One method is to create unexpected encounters and then use a three-minute elevator pitch to explain why the client should use your company's products and services. This aims to establish an impression in front of the EB. However, this approach has become less effective due to overuse and the nervous reactions of salespeople. Attractive salespeople still have an advantage (not a bias, just stating a fact).

Another method is through recommendations from high-level executives of existing clients (provided that these executives know the target client's executives and have a good relationship with you and your company, and their experience with your products or services must be very positive), or else it might lead to negative recommendations and loss of business opportunities. This situation is quite common. Therefore, some thoughtful salespeople run pre-meetings with their existing clients’ executives.

The best method is through internal champions within the power base of the client, who can help arrange a meeting or a high-level meeting (HLM). Let your supervisor assist you in these meetings. When meeting with high-level clients like Chairpersons or General Managers, the presence of decision-makers from both sides often leads to more honest discussions. However, there's a risk of receiving negative feedback, which must be considered. If the expectations of the client's high-level meeting don't align with your team's, the consequences can be serious (ranging from losing credibility to job stability risks). Therefore, dealing with EBs is a challenging part of the MEDDIC process, more complex than it seems on the surface. Both experienced and new salespeople can easily falter here. Below, I will illustrate this with an example.

Additionally, could the EB be a third party to the Chairperson or General Manager? Yes, for example, independent directors or board members, or the second generation of a business family, especially for large-scale projects involving millions or billions. These usually go through a board meeting where key users need to explain the case, benefits, ROI, and risk analysis, followed by a collective board vote. Wise Chairpersons and General Managers will consult relevant directors, influential shareholders, or high-level group consultants beforehand and gain their agreement before bringing the topic to the board meeting. After all, no high-level executive wants their proposal rejected, as it's essential to maintain face and influence within the company.

Case Studies:

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Listed Company's Successor: After months of negotiation, Mr. Wu, the successor of a listed company in mainland China, agreed to implement a software platform. I arranged a high-level meeting and prepared a quotation. The meeting started smoothly, but when asking Mr. Wu to sign, a calm female voice from behind a partition said it was too soon to decide. The voice belonged to Mr. Wu's mother (a major shareholder), whose attendance we were unaware of. This incident was a shock, resulting in lost credibility and affecting subsequent work. This case teaches the importance of confirming attendees' identities beforehand and preparing for potential questions, which can be facilitated by internal champions.

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Local Automotive Manufacturer's Textile Company: In late 2018, a textile company affiliated with a local automotive manufacturer planned to implement ERP. During my visit to their IT department, they asked for a software discount, claiming that the General Manager had decided to use our service. Initially, I thought the 8th-floor General Manager was the EB, but the real influencer was Mr. Lin, a senior consultant on the 15th floor and a former General Manager who had implemented SAP in the group’s automotive factory

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twenty years ago. This is an example of benefiting from the groundwork laid by predecessors. It also highlights the importance of Metrics: if the automotive factory's SAP implementation had been poorly received, this order would likely not have occurred.

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In conclusion, establishing trust with EBs is not straightforward and poses significant risks for salespeople. However, it is a necessary part of achieving Big Apple Deals or Mega Deals. Understanding and navigating the dynamics around EBs is crucial for success in complex sales scenarios.

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Continuing the Discussion on MEDDIC's Six Checkpoints, Today We Focus on the Third Point:

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Let talk about 3th part

3. Decision Criteria (DC).

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As Buddhism says, "Fear not the arising of thoughts, only the delay in awareness."

In the sales process, there is often a sense of arrogance, assuming that existing customer needs are almost certainly secured, underestimating the possibility that the customer’s decision could favor the competitor, who might seem just a formality in the bidding.

So, how do we address this? The key is to add the verb 'influence' before DC, aiming to influence customer specifications, including both technical and non-technical aspects, and ensuring these are considered in the vendor selection criteria.

Technical specifications depend on the product and service, each with its unique features and requirements. Non-technical specifications typically include the company's capital, industry experience, performance with existing customer groups, technical staff experience, industry certifications, etc.

Let's illustrate with a case study:

In 1992, the postal network equipment system was dominated by foreign network companies. At that time, I was in charge of the Taiwanese market for one of the top two network companies in Taiwan. Our sales team learned of a national bridge equipment tender, expecting a need for over 1000 units. Our company had just developed a bridge product, with only two engineering prototypes available, and we made two more for testing purposes.

Due to budget constraints, the foreign network companies expected to drive the tender into multiple rounds to increase the base price. We promised the client that, if our technology passed the tests, we would close the deal within the budget, leveraging our local advantage in Taiwan. Our engineers worked tirelessly to meet and exceed the specifications, which were mostly set by the foreign companies.

You can imagine the scene at the tender opening. After passing the technical bid with four companies, we outbid the three foreign network agencies as soon as the price bidding started.

This example shows how the foreign network salespeople, who were originally at an advantage, failed to pay enough attention to DC, focusing solely on technical specifications and neglecting non-technical aspects.

This order became the largest single order for the network company I worked for that year.

Once again, I emphasize the importance of seriously and accurately checking DC. No matter how good your relationship with the client is, you must influence them to include the uniqueness and relevancy of your company's products and services in the RFP and RFQ.

As Sun Tzu's Art of War says, "Attack where they are unprepared; act when they do not expect it."

Even a great general like Guan Yu can lose Jingzhou due to carelessness. We are not great generals, so we must be even more vigilant.

This is the third part of MEDDIC. The fourth part will continue next week.

Wishing everyone a pleasant holiday.

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Today, let's talk about the fourth part of MEDDIC:

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4. Decision Process (DP): This term needs the verb "Push" in front of it.

Typically, the DP in companies, especially in Taiwan, involves several steps like approval forms, purchase requisitions, and purchase orders. Each form usually requires 3 to 5 signatures from relevant client managers, totaling up to 9 to 15 signatures. Each involved manager often has opinions noted on the forms, as Taiwanese company heads (Chairpersons, General Managers) generally believe that if a subordinate manager doesn’t express any opinion on these forms, they are not diligently reviewing them. This is a semi-public secret for checking subordinates in the workplace.

Thus, you can understand why even moderately large orders (generally over 10 million NTD for hardware, over 5 million NTD for software) are quite challenging.

You might think, given the lengthy process and many required signatures, that all you can do is wait. But waiting can sometimes result in losing the order. The business environment changes rapidly, and external changes can have significant impacts. As salespeople, we can't just wait; we must push the DP.

How to push it? Good question. This is when you need to contact key players, such as the department heads proposing the purchase of your product (service) – they might be managers, assistant managers, or vice presidents. You need to get them to help push the process internally.

But the most important factor is people. Sales is mainly about dealing with people. If you get the people right, you're halfway there. Normally, your key user should report to the EB and get their support and agreement before starting the DP.

Additionally, this information should be communicated to other managers involved in the DP (that the EB agrees and supports the initiative), which can significantly speed up the process. This is a crucial step.

The push I mentioned above refers to the internal part within the client's company. On the other hand, you can also push from the external supplier's role towards the client's high-level executives (EB). For example, you can create time and price pressure by offering limited-time price discounts (annual discounts) or quantity discounts. You can have your company's senior executives call or communicate in other ways with the client's high-level executives (EB).

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?Let’s talk about the fifth part of MEDDIC:

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5. Identify Pains (remember to quantify them)

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It's crucial to remember that 'pains' are plural, which is very important.

When conducting sales, besides understanding our own company's products and services, we also need to understand the customer.

We've all heard many salespeople simply recite product and service features, which can be quite unengaging due to a lack of empathy.

But what exactly about the customer should we understand? Specifically, what are the customer’s pains? And can the products and services you are selling solve or alleviate these pains? This is about identifying pains and then addressing or improving them, similar to how a doctor prescribes medicine based on symptoms.

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Businesses operate in various industries, and each industry, depending on time and geography, plays different roles in the market. For example, Taiwanese companies specializing in ODM, OEM, or branded products all focus on different value activities. Therefore, salespeople need to study the industry of their clients, their value positioning within that industry, their competitive strengths, and their 'moat'. Of course, this must consider the current and foreseeable future pains.

Factors such as technological applications, trade barriers, tariffs, geopolitics, human and financial costs, utilities, logistics, consumer profiles, and competitors can all be pains but also opportunities.

It's important to note that the definition of pains varies at different client levels. A manager's pains differ from those of a vice president, a general manager, or a chairperson. So, creating a consensus on pains is a task for the salesperson to identify.

From this, it’s clear that the work of a salesperson is vital, requiring extensive preliminary research. Using existing pains of similar customers to illustrate, while also identifying the current target client’s pains, is crucial.

This task requires a question-and-answer approach, but the more prepared you are, the more the client will open up, as they recognize your effort.

As mentioned, since pains are perceived differently at various client levels, after collecting pain data, it's essential to quantify it. Convert the pains into monetary terms and think from both positive and negative aspects. What is the potential loss over several years if not addressed? How much could be gained by solving it (or what new customers and market opportunities could be added)?

Don’t rely solely on the opinion of the key user. Their pains might be personal and not significant to the higher management. In such cases, your sales team could end up wasting time and opportunity costs, leading to dissatisfaction in

your sales manager and team, and a decrease in trust in you as a salesperson. This should be handled with care.

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This part of the MEDDIC methodology emphasizes the importance of understanding and quantifying the specific challenges or 'pains' faced by a potential client. It underscores the necessity for salespeople to conduct thorough research and approach sales from a problem-solving perspective, tailored to the unique needs and pain points of each client and their various organizational levels.

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Today, let's discuss the last part of MEDDIC, which is also the most important - the letter 'C'.

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6.'C' stands for 'Champions,' which in a business context means your supporters within the client's organization.

Like the other components of MEDDIC, 'Champions' is preceded by a verb: 'build.'

There's a saying that if you get the people right, you are halfway to success. This is only partly true in sales, where having the right people can indeed lead to success.

Why is 'build' used as a verb here? Because no

client starts as your champion; they become one during the sales process as they recognize the high value and competitive advantage your company's products and services can bring to their organization. This acknowledgement also extends to recognizing you as a competent salesperson.

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We previously discussed identifying pains, which is the process of demonstrating the value your company’s products, services, and your personal capabilities can bring to a client. Building champions goes beyond superficial niceties. Champions are looking for credit in the eyes of their economic buyers (bosses), which is tied to their career prospects within the company.

Who exactly are these champions within a company? Their level isn't always clear-cut, but one way to check is to see if they are within the 'power base' – meaning they are trusted by the economic buyer and their opinions on your products and services are valued.

How can you check this? Typically, by asking the champion to arrange a high-level meeting with the client’s economic buyer. This checks two things: whether they are truly your champion, and whether they have a strong relationship with the economic buyer. After all, high-level executives, whose time is precious, won't meet without a significant reason, like a potential deal worth millions or billions.

So, how do you build a champion? We've discussed the more direct approaches, but we must remember we're dealing with people. It's crucial to understand the personal wins and preferences of your champions. Get to know them, gain their favor, and then their trust.

In this world, few products and services are unique to your company. The key role of sales is to familiarize the client's team with your internal team, building consensus and trust. This is vital for successfully securing orders and ensuring smooth implementation afterwards.

This concludes a basic introduction and application of the MEDDIC methodology. I hope this provides some understanding and helps our friends.

Of course, its application can vary greatly. If you have thoughts or want to discuss your experiences in sales using MEDDIC, you're welcome to do so.

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Thank you.

Freeman Lin

[email protected]

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