MEDMEN: What People Get Wrong About the Economic Buyer

00:08 Pim Roelofsen: Welcome to The MedMen Show. This is Andy — 00:10 Andy Whyte: — and that's Pim. What are we talking about today, Pim? 00:12 Pim Roelofsen: We are talking about what people get wrong with the economic buyer. Yes — our friend the economic buyer. What's the thing people get wrong? Well, I think the first thing is not properly identifying the economic buyer. And then, as a follow-on from that, not engaging with them. 00:29 Andy Whyte: Yeah, definitely. I think when you have — as we work with our customers — a very clear set of criteria, traits and responsibilities that economic buyers should have, you run the risk of first of all over-qualifying. Particularly if you say things like "an economic buyer has veto power — they can say no and never say yes, or say yes and never say no." Well, then all roads lead to the CEO. Because even if you've got someone second in command, they can still be vetoed by the CEO. So you have to apply a level of common sense and intuition to that definition, because otherwise you always end up over-qualifying. 01:20 Andy Whyte: And then typically, sellers do business more than once with the same customer if they're doing a good job. So assuming the economic buyer is always going to be the same person is another mistake — and I think that's closely related to what you were saying there. Yeah, because it can change all the time. You could do a deal one month and then another the next, and any number of things can change. The economy can shift, and everything goes through an extra layer of scrutiny. Often that extra layer is where things bubble up for lower values — a person who normally had sign-off authority now has to go to someone else. Your deal size can also change. It's very unusual to have one deal followed by another of exactly the same size. 01:54 Andy Whyte: It's either a land and expand — getting bigger — in which case the economic buyer is most definitely going to get more senior, because you're asking for more money and a bigger investment in resources. Or the other thing that can happen is you do a big deal and then have a smaller upsell, in which case the economic buyer might actually change downward. Exactly. So yes — it can definitely change. You can over-qualify, but you can also under-qualify. 02:37 Pim Roelofsen: How would you describe under-qualifying? Well, I think under-qualifying can happen across different personas as well. Sometimes you have a champion who doesn't have the level of power and influence you need them to have — and by utilizing them, the identification and engagement with the EB is off as well. And then you get this under-qualification. And I think right now — and you touched on this a moment ago — everyone's saying "yeah, it's tough out there." It is, the economic climate is challenging. But really, businesses are still doing well. You just need to level up. If you think about getting access to the right authority, and really qualifying where you get the right engagement going with the right stakeholders — I think there's an opportunity for everyone to just do better by thinking about it more carefully. 03:24 Andy Whyte: Absolutely. And I think one of the mistakes I see people make frequently is assuming that because the economic buyer is typically more senior, they're not going to be interested — that they're just some sort of line in the approval process, and therefore we just need to spend as little of their time as possible. They're very senior, we don't want to bother them. Yeah — they only care about pricing. And actually that's a massive red flag for your selling. Because it tells me that if you use something like the value pyramid, you are too far down on it. If you're selling correctly, you should be attaching your solution to the most important things to that organization. And by nature, the economic buyer is going to care most about those things. So the idea of them not being interested — something's gone wrong. They're massively interested. 04:25 Andy Whyte: And again, if you're seeing that pricing thing, you probably have your eyes on someone who isn't the economic buyer. That doesn't fit the profile. And you said something brilliant I want to pick up on — you said they only care about price. Because we talked about how they care about the actual solution itself, but it's not just about price. They obviously care about price, but they really care more about the economics of it. And what's included in economics is not just the price — it's the cost to the business. What's the opportunity cost? How much investment — not just of money but of resource — has to go into this? 05:01 Andy Whyte: And it's not a binary "is that a good amount or a bad amount" question. It's relative to other projects they'll be looking at. Because beneath an economic buyer, at any one time there'll be multiple champions working on multiple different investments — not just technology, but all kinds of things. And that economic buyer will be thinking: I've only got a finite amount of resources — cash, consultants, project managers, all that. So what they really care about includes time to value, resource costs, and the actual cost from their budgets. Yeah. 05:47 Pim Roelofsen: So what we've got here: people either over-qualify or under-qualify. They don't think it's important enough to engage. They think the economic buyer doesn't care or isn't interested in their solution. Or they assume it's always the same person. 06:04 Andy Whyte: Yeah. I think maybe the final thing to say is that some businesses — a few I know of — are selling to different lines of business within the same customer. They might have a solution for one part of the business and something completely different for another part. And they still think the economic buyer would be one and the same person. So it goes back to the point we were making earlier — you need to build your understanding by triangulating and working with your champion to understand how they buy for that specific thing. 06:26 Andy Whyte: And I imagine a lot of people listening to this will have their ears pricked up at that, because the common place I see this is where a solution is very strong in a particular sector and they're used to selling to a particular economic buyer. If it's a marketing solution, they're used to selling to the CMO. If it's a security solution, the CSO. And then all of a sudden — which is a good thing — the solution gets broader. That marketing solution now helps with customer service too, and the economic buyer isn't just the CMO anymore, it's also the Chief Customer Officer. Yeah — you see this a lot with acquisitions and innovations that are a bit further away from the core portfolio. 07:04 Pim Roelofsen: Right. And we see it with some of our customers as well. So if you start to zoom out a little and adopt this mindset around personas — and especially around economic buyers — there's a lot of value to be unlocked. A lot of things people get wrong about the EB journey — but equally, a lot of opportunity to get it right!