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Should You Call a MEDDIC to Improve Your Sales Procedure?

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The Point: When should you call a MEDDIC to improve your sales procedure? Yes, we meant to spell it “MEDDIC” instead of MEDIC! Why? If you’re old enough to remember the television series M*A*S*H (or a Hulu Plus subscriber), you know the benefit a Mobile Army Surgical Hospital for the front-line position. We would argue that Business Sales/Marketing is similar to wartime, inasmuch you most likely will have casualties. Instead of these casualties being life/death, they are go/no go for the campaigns you run as an organizational Sales/Marketing Leader. So, in this post we explore the MEDDIC sales procedure… Enjoy!

Should You Call a MEDDIC to Improve Your Sales Procedure?

The MEDDIC Sales Procedure

An acronym, MEDDIC stands for Metrics, Economic buyer, Decision criteria, Decision process, Identify pain, and Champion. This sales procedure emphasizes better customer qualification—determining if you should expend effort getting a prospective customer into your sales funnel.

The MEDDIC Sales Procedure

The MEDDIC sales procedure is a B2B sales methodology that was developed in the early 1990s. The process focuses on better customer qualification, in other words, determining whether you should put effort into getting customers into the sales funnel. Supporters for the MEDDIC sales method assert that pitching more qualified customers leads to a greater closing rate, which in turn increases sales performance.

MEDDIC is an abbreviation for Metrics, Economic buyer, Decision criteria, Decision process, Identify pain, and Champion. These are the six steps concurrently utilized to identify customers within the MEDDIC sales process.

Metrics

The first step is to determine what the client hopes to achieve in gaining from your product. The gains must be easily quantifiable. For instance, the business may wish to increase the amount of products that they produce by four times the rate or they may need to bring their products out within a half-hour or to cut down at least 20% of manufacturing expenses.

These metrics allow you to explain the economic advantages from your service. Once you’ve identified this is important to the customer, it is possible to demonstrate that your solution can provide a high Return on Investment (ROI). If you are able to justify your solution from an economic perspective, in theory you’ll be just a few steps away from closing your deal.

Economic Buyer

You must know who’s the company’s buyer of economics that possesses the authority to decide and approve spending. In most cases, you’ll be speaking to someone additional in the organization than just your current contact (For example, the decision could come from a Consensus Committee). Knowing the business buyer’s mindset and their perspective will assist you in closing sales because the buyer’s veto power means they are the only one that needs to be convinced.

Plan on directly contacting the economic buyer to learn about their success metrics, their expectations, and their decision-making process. However, in certain situations speaking directly is not possible, and you must attempt to gather these details about the buyer from the person you have contacted. Utilize these details to ensure the purchase appeal to the buyer even if they aren’t going to necessarily be affected directly by the sale.

Decision Criteria

Also, you must know the business’s criteria when making its choices. Businesses are frequently faced with different options from various sources and are forced to review and choose. If you can understand why they arrive at their decisions then you can tailor your message accordingly.

The criteria for judging differ, but generally businesses consider factors such as ease of use/integration, budget restrictions, and possible ROI in making their decision. If the prospective company doesn’t have clearly defined criteria for making decisions, you could ask them to write it down on paper. This is a way to show that you meet all the criteria they have, and potentially showing them the “Why?” associated for them to not accept an offer.

Decision Process

The decision process will tell you what factors influence the decision-making capabilities of the company and the process that decision making takes as well as which are actually taken and then followed up on. The decision process should include the person who is responsible for making a decision, the deadline they work on, as well as any formal approval procedures in the process.

If you are aware of the process of making decisions, you’re less likely to miss out on the sale because of stagnation. You know precisely what has to be done for the company’s part to conclude the sale, and you are able to work to fulfill those requirements. If, for instance, you are aware that the economic buyer has ok’d the purchase but hasn’t completed the follow-up procedure documents, you may make an effort to have that paperwork completed, thus closing the deal.

Identify Pain

A client must be in need prior to deciding to seek the solution. In other words, no change will occur until the pain associated with staying the same (doing nothing) is greater than the pain associated with changing (switching vendors to you!) It’s essential to determine what that requirement is or what’s making them feel pain (suffering?). The pain may be manifested in various ways, such as high costs as well as slow production and poor revenues. Find out what pain your customer is feeling and figure out what solution you can offer to alleviate the discomfort. What happens in the event that they fail to choose the right solution, or make a mistake? What will be the solution to be able to fix the problem?

Be as precise as you can about the customer’s issues. For instance, knowing that the customer is losing money because of slow production is vital. However it’s not sufficiently specific or abstract to put into use. It is specific though if you know that they’re losing $300,000 per month due to their production process because it isn’t nearly the speed it ought to be. In this scenario, you could propose your solution with a specific and persuasive method for improvement therein.

Champion

Find a person on the inside who’s invested in your progress and who pushes to help you. The person who champions your cause is likely to be the one who is the most affected by the company’s struggles or who will benefit the greatest from the solution. Since they’re interested in your solution, they want you to succeed and will leverage their influence to market the solution internally.

Your champion doesn’t necessarily need to be in an executive or other executive position (but it sure does help), but they should be respected. A person who is known as self-centered and uninterested in advocating for you is never the best choice. However, having a champion who has influence and respect on your side could make all the difference in closing future deals.

Should You Use the MEDDIC Sales Technique?

The MEDDIC sales technique is an easy checklist for your sales operation. It will ensure that your sales are backed by all of the details that you need and the easy acronym makes it simple to recall what that you’re required to know. Since the MEDDIC sales procedure is based on learning rather than making sales through tricks it’s simple to use even for people who aren’t considered to be “salesy.”

Furthermore, the MEDDIC sales strategy provides you with the data you need to be able to precisely assess your prospects. Once you understand more about your prospective clients you will then know if they’re worth your time. This will aid in forecasting your sales since you’ll not be creating leads that won’t be profitable in your pipeline for sales.

Implement the MEDDIC Sales Procedure – Where to Start?

As you can see from the previous steps, the MEDDIC sales procedure provides specific guidelines on how to gain more information about the potential customers you are targeting to convince them of your service or product’s worth. How do you get your sales reps to use this method?

Begin by visualizing the process. It’s not only the basics of MEDDIC, but how the steps are tailored for your company. This could involve creating an outline of the collateral you should use at each step or conversation trees to aid reps in identifying winners and points of contention (These are in your Sales Playbook, right?)

Next, make sure that your sales reps keep accurate records of meetings with prospective customers and other interactions using their MEDDIC procedures to make sure they are following the entire MEDDIC process. For instance, you could add fields to your CRM that correspond to each of the steps or develop a template such as the one below.

SUMMARY

If you are able to qualify and understand your clients Your sales team will be able to focus their time on opportunities that are most likely to work and discover the value that will get this deal across the line to “Closed Won” status! If you’d like more information on how we can help you implement MEDDIC or other Sales/Marketing best practices, CONTACT US today.

Sam Palazzolo, Managing Director

Why Your Startup Won’t Raise Capital – Top 5 Reasons

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The Point: We’ve been thinking a lot about why your startup won’t raise capital and identified the top 5 reasons. At Tip of the Spear, we’ve seen a lot of startups achieve success, and unfortunately even more failure when it comes to raising capital. While raising capital isn’t the only strategy entrepreneurs should pursue for their venture funding (See our post on Customer Funding), there are certain do’s and specifically don’ts associated with raising capital. So in this post, we’ll explore the top 5 reasons why your startup won’t raise capital… Enjoy!

do you really need venture capital

What’s so Special about Raising Capital as an Entrepreneur?

Raising capital is an important step for many entrepreneurs because it provides the funds needed to start and grow a business. Some of the key benefits of raising capital include:

  • Funding Business Operations: Capital is needed to cover the costs of starting and operating a business, such as purchasing equipment, hiring employees, and marketing the business.
  • Facilitating Growth: Capital can be used to invest in new initiatives and expand the business, such as by entering new markets or launching new products or services.
  • Improving Financial Stability: Raising capital can help a business weather financial storms and become more financially stable over the long term.
  • Increasing Valuation: By raising capital, a business can increase its valuation, which can be beneficial when the business is eventually sold or goes public.
  • Attracting Talent: Having access to capital can make it easier for a business to attract top talent, as employees may be more likely to join a financially stable company with a bright future.

Overall, raising capital is an important step for entrepreneurs who want to build and grow a successful business. So if raising capital is so important, why is it so hard to do so successfully?

The Top 5 Reasons Your Startup Won’t Raise Capital

There are many reasons why startups might not be able to raise capital. Here are five of the most common reasons:

Reason #5 – Lack of a Clear Value Proposition: Investors want to see a clear and compelling reason why a startup’s product or service is valuable and how it will generate a return on their investment. Without a strong value proposition, it can be difficult for a startup to convince investors to provide funding.

Reason #4 – Lack of Traction: Investors want to see that a startup has a viable business model and is making progress towards becoming profitable. Without strong traction in the form of revenue or user growth, it can be difficult for a startup to attract funding.

Reason #3 – Poor Market Fit: If a startup’s product or service is not well-suited to the needs of its target market, it can be difficult to generate enough demand to sustain the business. This can make it difficult to convince investors to provide funding.

Reason #2 – Weak Team: A startup’s team is critical to its success. If a startup does not have a strong and experienced team in place, it may struggle to execute on its business plan and attract funding.

Reason #1 – Competition: If a startup is entering a crowded market with many well-established competitors, it may struggle to differentiate itself and attract funding. This can be especially true if the startup does not have a unique value proposition or a clear advantage over its rivals.

SUMMARY

In this post, we explored the top 5 reasons why your startup won’t raise capital. Be it because of your lack of a clear value proposition, lack of traction, poor market fit, weak team, and/or competition the odds of successfully raising capital for your entrepreneurial startup venture may never achieve success because of the lack of funding. If you/your entrepreneurial dream of success hangs in the balance due to venture funding, Contact Us to explore how we can align/work together.

Sam Palazzolo, Managing Director

Pricing Strategy During Natural Disasters

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The debate surrounding pricing strategy during natural disasters has been around for years and was revived during Hurricane Ian, should businesses increase or hold prices in times of increased demand for goods like gas, water, or bread? In the present, thanks to the impact on social media platforms, a fresh alternative is emerging: Why not reduce prices during these times of crisis?

pricing strategy

The majority of economists oppose the implementation of price-gouging laws , which limit major price increases in natural catastrophes. Instead, they favor raising costs to keep demand in proportion to supply. If you let the market function, economists say that products will be available and only sold to those who appreciate them the most and are willing to pay. The high cost of goods also reduces the need to store up — buyers purchase only what they really need instead of buying/hoarding their purchases. Also as a better profit margin, a higher potential for profit encourages businesses to actively seek more inventory to meet the demand. The most obvious disadvantage is that the absence of these laws place disadvantages towards people with lower incomes who are less able to pay for higher costs.

“Hurricane Ian devastated Floridians, destroying homes and leaving thousands without food, water or electricity. Rebuilding will take months or longer—creating an inexhaustible demand for qualified contractors and debris removal services. Sadly, bad actors may exploit this demand to take advantage of people just trying to rebuild their lives. If anyone encounters one of these scams, or excessive price increases on essential commodities, they need to report it to our office immediately so my Rapid Response Team can stop the fraud and keep others from falling prey.”

Attorney General Ashley Moody, Oct 3, 2022

Contrary to this, the majority of policymakers consider that price levels should remain the same or only raised slightly (for example, 10 percent) in the event of a disaster. They view this as an egalitarian, first-come-first-served method to allocate scarce goods. The drawbacks of limiting market prices are the opposite of the above benefits rapid selling outs, hoarding and the reduction of the financial carrot to increase supply for businesses.

The recent storms have shown the new trend in catastrophe pricing. Instead of increasing prices, some companies are actually moving towards cutting prices on basic goods or services that are in high demand. Why? A lot of businesses are aware that although economists may think it is appropriate to increase prices in times of crisis, the customer experience in their “real world” view this as a negative act, judging it as price gouging. In the long run, profits could be at risk when a business is seen as profiting from an unfortunate event like a natural disaster.

And if the customer experience isn’t a good enough barometer for a current marketing strategy during a natural disaster, take the actions of the Federal and Florida Government. The Florida Attorney General activated Florida’s Price Gouging Hotline with Tropical Storm Ian approaching the state. The activation comes following the Governor’s state-of-emergency declaration for 24 counties. Meanwhile, over at the White House, the President and staff met with oil executives to discuss Hurricane Ian and low gasoline inventories, warning the industry not to price-gouge consumers.

Social media is also playing a part in why businesses change their pricing strategy during natural disasters. The consequences of an increase in prices during a disaster — which can occur in a way that is automated through algorithms — typically leads to negative social media postings. While a single negative post isn’t bad, going viral for the business owner — small or large — is never a good thing!

Your pricing strategy and the way your pricing affects the customers during time in need are essential aspects of the brand you have created. The tough times provide opportunities for companies to emphasize their message of caring for their clients. This includes keeping, or perhaps reducing prices, as well in securing a greater quantity of the essential items in order to better serve their customers. 

Think of it this way: Which business do you prefer to work on a daily base? The business which seemed to be financially affluent and abided by the laws of economics (supply/demand) as opposed to one that had its prices held within limits due to manipulation by the government/social media pressures?

Sam Palazzolo, Managing Director

How Brands Use Pricing Strategy to Improve Customer Experience and Increase Brand Value

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The Point: Is the pricing strategy you establish for your organization’s products/services the “right” price? By the “right” price, what’s really at stake is what will enhance the customer experience and increase your brand value. From the pricing studies that we’ve conducted, we’ve seen a number of organizations that are challenged while at a 3-pronged fork in the road when it comes to establishing pricing strategies. In this article, we’ll explore an overview to pricing strategy and the inherent benefits associated with customer experience and brand value… Enjoy!

Pricing Strategy 101

Pricing Strategy can be a powerful tool to increase brand value and attract new customers. Brands use value-based pricing to create a range of products and services at different price points. The goal is to make each product or service stand out from the rest of the market. To do so, brands must create a meaningful difference between their products and those of competitors, and give consumers an apparent reason to pay more. Brands that employ a premium pricing strategy often target a particular segment of consumers.

Pricing Strategy as Competitive Advantage

While low prices are often appealing to consumers, they are also perceived as cheap and can erode brand value. Price changes must be carefully considered, as they are almost impossible to reverse. If a competitor is already offering a product or service at a low price, they may have the upper hand. Using discount pricing can help a business to attract more foot traffic and to clear out old inventory, but it could also lead to negative effects on the perception of quality.

Pricing Strategy and Organizational Goals

Developing the right pricing strategy is essential for any business. There are many factors to consider, so it is a good idea to calculate COGS, profit goals, and customer needs to create the optimal pricing strategy for your product or service. Once you’ve done that, you’ll be ready to start your pricing journey.

Pricing Strategy – First Steps

The first step in creating a profitable pricing strategy is to define your target audience. A target audience’s price sensitivity will help you determine the appropriate pricing strategy. For example, if you have a product with high price-sensitivity, price-skimming may be a good strategy. If you have a limited market, a low price strategy may work well for you.

Pricing Strategy is an ongoing process. Ideally, you should use CRM software to segment your customer base and test different pricing strategies. Developing a successful pricing strategy requires time and effort. However, the right pricing strategy should be well-supported with your go-to-market strategy and marketing plan. In order to determine the best pricing strategy, it’s important to gather feedback from your sales team. You should also evaluate your competitors and gauge their pricing strategy.

There are many different ways to price your products and services. For instance, you can price a product or service above your competitors, while you might be able to match them using a value-based model. For a more profitable strategy, you might want to price your products or services below your competitors. This strategy, however, requires more research and insight into your competitors. It’s also important to evaluate your own costs and resources in order to determine which pricing strategy works best for your business.

Another pricing strategy is loss-leader pricing, where you offer a low-priced item with the hope that consumers will buy more. This strategy works well if you want to attract new customers. If the price of your product or service is a significant part of your business, you might choose to charge higher prices for ink to attract more potential customers.

SUMMARY

In this article, we’ve explored pricing strategy from an overview perspective along with inherent benefits associated with customer experience and brand value. Crucial in establishing the pricing strategy are identification of competitive advantage and organizational goals. We’ve also explored a few additional “first steps” that should be considered in doing so.

Sam Palazzolo

KEYWORDS: Pricing Strategy, Competitive Advantage, Customer Experience, Marketing, Competitive Strategy, and Organizational Goals

Healthcare CX Transformation: A Broke System Creating Broken Hearts/Dreams

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I’ve spent the last month in/out of some of the country’s largest (best?) healthcare systems. Not as a consultant or venture capitalist working on a healthcare cx transformation, but as a patient. Here is a summary of my customer experience: Regardless of the hospital size, location, and reputation all I can say is, “Come on healthcare… You’ve got to do better than this!” The modern healthcare system is broken, and at the frayed end of the whip is the customer (or patient and their family/loved ones). There is a tremendous lack of patient engagement highlighting the importance and benefits of an omnichannel consumer experience, especially in light of providers and payers (insurance) struggling to communicate with care, compassion, and ethics.

Without Your Health, What Do You Have?

I’ve seen it throughout my professional career/personal life… Those that seemed to put off til tomorrow what they could have been doing today in the hope that they would be in a better position to live the life of their dreams. Of course, some made it happen while others didn’t for a variety of reasons (i.e., poor business decisions, market conditions, etc.) But there is one group that never achieves that nirvana dream life, those that have poor health.

One of my mentors shared with me early on in my professional career, “Just remember Sam… Without your health, you’ve got nothing!” It was meant to be a sobering reminder to take good care of myself (body and mind). But as a freshly minted-MBA graduate with the world as my oyster, I can honestly say that their message rang hollow and didn’t resonate (I instead adopted a “Work hard, play hard” philosophy!)

If it sucks to grow old, and age is the one facet of life you can count on doing (you can/should rule out getting hit by a bus to stop the aging process), then we’re all going to advance in years. Along with those advancing years comes a myriad of opportunities/problems/struggles. And unable to escape the gravitational pull of aging years and health issues, I found myself in/out of several hospitals for nearly all of the last month.

Maybe It’s Just Me, Maybe It’s COVID-19, or Maybe It’s Broken Healthcare!

Healthcare that is of high quality no longer is available in traditional clinical settings and the spread of the pandemic has intensified the shift in healthcare delivery. As healthcare services shift away from the hospital and doctors offices, it’s more vital than ever before to get healthcare consumers involved and build the healthcare experience from that of the customer, or patient. This is not just about better engagement strategies, but also a major improvement in the healthcare customer experience (CX) which has been in a rut in comparison to other industries’ CX (more on this in a minute). As a patient, I struggled with attempting to identify “How can payers and providers enhance the CX and get people involved in their own health right now?” (and apparently so did they!)

Healthcare can draw lessons from methods of engagement for consumers employed by other industries. If you’re like me, you’ve probably seen how fitness, entertainment and other industries demonstrate the way that omnichannel experiences can lead to greater engagement. Digital experiences let companies engage with customers more frequently and in greater depth, not every day or even twice a year, as is the case in healthcare.

In extending the frequency of interactions with consumers to weekly or monthly with omnichannel engagement strategies healthcare providers and payers can offer guidance, education and preventive services that support the business goals and improve health outcomes.

The Consumer Experience in Healthcare Reimagined

The current healthcare CX is not designed specifically for consumers, patients, or their families. The majority of healthy consumers are only engaged a few times per year, and the payers and providers naturally interact more frequently with people with chronic illnesses and/or require immediate treatment. Healthcare systems for consumers are difficult to navigate and the experience is sporadic and confusing (understatement!), with a variety of options and unreliable user interfaces (even face-to-face).

So, what do I want from my healthcare experience? I don’t think I’m alone when I share that healthcare customers want a modern/easy experience, with a central location to get access to the information, navigate and pay for healthcare in a manner that’s customized, digital and always available. Afterall, other industries utilize platforms to provide a consumer-focused and omnichannel experiences for their users, so why not healthcare? These platforms make use of information to orchestrate and create customized user experiences. Consider how Netflix utilizes your history of streaming to suggest content regardless of what device you’re using.

Why Is The Long Road To Recovery So Long?

I find myself healing, perpetually exhausted, and all the while swimming through the seemingly unending stream of bills coming my way. A process that I’m pretty confident has been elongated by healthcare payers and providers. If I sound frustrated, it’s because I am. If I sound optimistic, I am not. I’m left with a continuous thought of, “Come on Healthcare… You’ve got to do better than this!”

Sam Palazzolo, Managing Director @ Tip of the Spear