The Importance of Qualifying The Economic Buyer
Time to read: 5 minutes
What is an Economic Buyer?
An Economic Buyer is typically just one person within an organization and is the final authority in whether your product, service, or solution will get any of the budgets. In some cases, the Economic Buyer can also be more than just one individual - it could be a whole committee, board, or advisory group.
How To Find The Economic Buyer?
The actual term ‘Economic Buyer’ is sales lingo, and this is important to remember - no one from a buyer’s organization will walk up to you, shake your hand and say “Hi! I’m the Economic Buyer!"
It’s down to you to spot the Economic Buyer through a strict, process-driven, and intuition-based process.
Make Sure You Do Not Under-Qualify
The most common mistake that most salespeople make is the under-qualification of Economic Buyers. A poor identification and qualification process for an Economic Buyer will see the seller to misidentify the Economic Buyer and halt the search.
They may have found the ‘Budget Holder’ and believe that he is naturally the Economic Buyer - this could not be further from the truth. The ‘Budget Holder’ is not an official title in the same way Economic Buyer is not - customers are never going to proactively tell salespeople how their budget process works.
Finding the Economic Buyer can be an incredibly arduous task - not only is there a puzzle as to what roles are assigned or associated with the budgetary policy, but it is also a business process that is confidential and restricted to inside eyes.
An important rule for sellers who are trying to find the Economic Buyer is this: do not tie in budgetary roles or processes as the focal point of your qualification. Budget Holders are inversely related to finding the Economic Buyer. Their role is built around having access to and management of budgets for various departments.
The Economic Buyer is different from the Budget Holder because they will have access to and utilization of these budgets, and will have the power to adjust budgets to get more funds. They will typically have this flexibility because they are allowed to create positive changes for their business.
An Economic Buyer will be someone who will resonate with Metrics at a far higher level than an incorrectly qualified candidate.
Another mistake sellers make when trying to find the Economic Buyer makes the ‘CEO’ mistake, similar to the Budget Holder error. This is the other end of the spectrum, however, a process of over-qualification opposed to under-qualification. A CEO will of course have access to department budgets and the power to wield them but is very rarely ever the Economic Buyer.
How To Correctly Quality The Economic Buyer
To fully understand what the Economic Buyer is, your criteria for qualification need to be completely on point. The following criteria should be applied to an individual in a customer business in your qualification process:
They have the power and authority to veto project progress and the influence to stop/start it regardless of your Champion
Their primary end goal is to fulfill the objectives of the organization. They will have a significant say in quarterly and annual reports and meetings
They can get access to funds that aren’t necessarily attached to budgets
They will be the ones taking the brunt of responsibility for profit/loss situations
They will be in the contractual process, most likely the ones to authorize sign-off or approvals.
The Decision-Making Process For Economic Buyers
Once you have qualified who the Economic Buyer is, it is crucial to understand the decision-making process that they go through. They will not care about the functionalities and features of your solution, what they will care about is how it impacts the bottom line of their business.
If you want to know how to put a solution firmly in the decision process of an Economic Buyer, you have to make them remember yours distinctly.
By applying to problems, obstacles, and pain points, your Economic Buyer is far more likely to care about your product and services over competitors. Ultimately an Economic Buyer cares about three things when it comes to making a decision:
How much does it cost?
How long till the organization realizes its value of it?
How easy is it to use for the people in the organization who will need it?
Economic Buyers will use their previous experiences with sellers as a reference point for their process with you - it could mean they are more experienced and intuitive to the factors in the decision, but they will also have the potential to be warier. You should look for connections you may have at an executive level or higher to reassure and monitor the progress of your deal with the Economic Buyer.
The Economic Buyer Post-Deal Success Plan
Once you have won the deal with the Economic Buyer, they will typically not have any more direct action toward your solution.
The very best salespeople know that it is crucial to keep your Economic Buyer updated on how your solution is being implemented into the business - this will get so many more rewards later on down the road and pay dividends for the effort it requires.
If you keep the Economic Buyer updated, especially on the success and problems your solution has solved, the potential for successful upselling in the future is boosted. The Economic Buyer could also become a focal point for referencing when it comes to future deals if they are needed.
The Economic Buyer is the person with the ultimate authority, the power to decide between the red light and the green light on a deal.
It is so important to engage with them and do it well as you go through - an important tip is to have sales leaders attending Economic Buyer meetings - its the opportunity for the seller and Champion to put on a show for the Economic Buyer, but it is incredibly important to have support by a sales leader in that meeting.
The sales leader also has the ability to finalize decisions that the seller alone may not be able to make. This tactic could make all the difference as you try to close a deal with an Economic Buyer.