The Sales Qualification and Forecasting Method You Need to Know About
What Is MEDDIC All About Anyway?
MEDDIC is a handy acronym that fortunately doesn’t have anything to do with the medical industry. It stands for:
- Economic Buyer
- Decision Criteria
- Decision Process
- Identify Pain
(We think the acronym is a little forced, but we’ll roll with it.)
The idea behind MEDDIC is simple: to help sales teams better qualify potential customers and waste fewer resources pursuing opportunities that aren’t worth the resources, or aren’t likely to close.
It all goes back to the idea that much of sales success involves choosing the right targets. In other words, if you win or lose a deal, it isn’t just about your pitch, or your business case, or any other selling motion; it may also be because you went after the right (or wrong) customer.
What makes for a “right” or “wrong” customer has nothing to do with whether or not you won the deal. (Saying, “It was the right customer!” because they paid you money may be technically right, but it doesn’t do much for the long run – maybe you just got lucky.)
A “right” customer is someone who fits the profile of an organization with the means to buy what you’re selling, the need for it, and the interest in it. When those three qualities align, you win (assuming you were persuasive enough to convince them).
MEDDIC helps you predict which customers will be the “right” customers to pursue – which customers are worth spending valuable time and money to obtain. The more you chase after accounts in this pool, the more likely you are to hit your numbers – to the point where you can be more selective with which deals you’re working.
In this sense, sales isn’t “just a numbers game” – more doesn’t necessarily result in more.
Let’s look at each component of MEDDIC (which, again, we have to point out has nothing to do with hospitals).
Metrics are ways to determine success and worth.
These are often called key performance indicators (KPIs). However, while all KPIs are metrics, not all metrics are KPIs.
Whatever you call them, metrics are important because they’re how customers evaluate the economic benefit they’ll receive from your product or service.
Whether it’s in increased product demos, quicker sales cycles, lower employee churn, shorter time to market, higher website traffic, or anything else you can put a number to, metrics are things your solution needs to meet (or be likely to meet) if a customer is going to be interested.
What you and other sales pros want to do with metrics is:
- Understand what the customer values the most, so you can tailor your pitch to them, and
- Determine if your product/service can meet customer expectations of performance (i.e. Can it do what they need it to do?)
Metrics aren’t magic, but they are helpful in selling and forecasting future sales. If you can understand and communicate value here, you’re more likely to do so with similar customers in the future.
We think the term “economic buyer’’ is a bit redundant; after all, aren’t all buyers “economic”?
Redundancy aside, an economic buyer is the contact inside the company who has the actual, real power to authorize spending.
This person is considered to be a type of decision-maker, but note that the person controlling the purse-strings and the ultimate “yes or no” decider may not be the same person. This is where understanding customer roles* within the real hierarchy of a company (as opposed to a simple, one-dimensional org chart) is essential.
*Read this if you like “The Office” – it’s fun.
It’s crucial to understand the economic buyer’s needs, priorities, and mindset. If at all possible, you’ll want to have conversations with them about the metrics they use to evaluate whether or not they should agree to a deal, any expectations they have, and how they are involved in the overall buying process.
Ensuring that sales teams are identifying buyer types within your CRM will enable you to use data in future pursuits as a means to proactively get multi-threaded with the right buyer types. You can leverage this data to understand which personas are involved in deals that are won versus lost, the number of stakeholders you need to engage in a pursuit to win, or how many supporters/champions are on your side and the win-rates associated with that metric (three supporters – win rate 30%; four supporters – win rate 35%) for example.
This component is important to understand because it provides a blueprint on how the company makes decisions about solutions and the vendors who provide them.
Deals are competitive. Chances are, any situation where a business is considering a solution will have more than one vendor in the mix. They have to compare and contrast all of these competitive options to figure out which they should choose – which means if you grasp the criteria they use, you can help them make the right choice (i.e. you).
The list of possible criteria a business can use is a mile long. Criteria can range from budget constraints and projected ROI to how easy the solution is to use, total implementation and integration time, and how well the solution plays with their current infrastructure.
Criteria exist whether or not the company has a formalized, by-the-book, decision-making process. Criteria also may vary from business unit to business unit, or even team to team within the same business unit.
In short, you want to know what they think is important so you can show them you meet all the criteria and should be the logical choice.
Closely related to the above is the process buyers use to make the decision and give you a green light or a red light.
Understanding how the gears turn and lead to a yes/no conclusion makes you more likely to succeed. It also makes you more likely to avoid the deal stagnating and hanging out in limbo. You’ll know who to contact and win over, what timeline you’ll need to meet, which legal requirements need fulfilled, and a dozen other hurdles to surmount in order to close.
Again, a company may not have a formalized process. Uncovering whatever process they use, even if it’s an informal one, takes a bit of detective work. (But that’s what makes sales so much fun, right?)
Before a customer buys a solution, they need to have a problem. And you need to know what that problem is.
Identifying the customer’s pressing need – or pain – is vital. Without it, you won’t make a sale. And even if you know of a pain, that doesn’t mean the issue is the customer’s only or even most important need.
There are a ton of ways that a customer’s pain point can make itself known. The more specific you can define it, the better you can tailor your pitch. For example, “We’re losing money” isn’t as good as “We are losing $500,000 per quarter because our production tempo is 25% slower than optimal.”
The goal here is to identify and define the pain and connect that critical need to a solution in a crystal clear way. But sales reps can’t make their pitch compelling if they don’t make it appropriate to their target account’s urgent dilemma.
Finally, a sales team needs to know if they have a hero inside the account who’s going to slay some dragons for them.
In other words, it’s important to identify champions: the contacts who have the influence with decision-makers to open doors and win over leadership.
Champions don’t usually have final decision-making authority, but even if they don’t, they still are integral to the sales process. They know important people, and important people respect them. When they talk, buyers listen. When they knock on doors, those doors open.
With luck, you have an insider who will help carry you along the sales process. They won’t make the sale for you, but with a really great champion by your side, it’ll seem like they did.
Needless to say, if you can find someone invested in your solution and committed to its success, your odds of winning the deal go way up.
What’s the Difference Between MEDDIC, MEDDICC, AND MEDDPICC?
You may have heard of two variations on MEDDIC: MEDDICC and MEDDPICC.
Both variants add a C at the end that stands for Competition. In competitive markets, sales reps need to uncover:
- What other companies are in the mix for their business?
- How do we think we stack up against them?
- How does our customer think we stack up against them?
- What is our one main advantage over the competition in play?
MEDDPICC goes one step further and adds a P for Paperwork Process. This is used in enterprise deals where there’s a very real danger of having the deal get snagged on paperwork and red tape issues as you near the closing stage.
You’ll ask questions like:
- What needs to be signed before we close and who needs to sign it?
- Is there a procurement department or contracting team who we’ll need to work with?
- What legal issues will we need to navigate?
What do we need to do and what do our customers need to do to get all the paperwork in order?
Overall, MEDDIC is a useful way to qualify potential customers and see if they meet the criteria that’ll lead to a successful venture. A target account may not check all of these boxes, but that doesn’t mean the opportunity isn’t viable. The more you understand what has worked well for you in the past, the better you can use MEDDIC to inform the future.
What Is Sales Forecasting and Why Does It Matter?
We all want the ability to predict the future and document predictable revenue.
Unfortunately (or fortunately), we can’t. But in sales, we want to know how much revenue we’re bringing in over the next chosen timeframe as accurately as possible so we can make better decisions for ourselves, our teams, and our companies.
That’s the purpose of sales forecasting: a process to put a number and probability on outcomes over a certain period of time.
An accurate forecast enables better decisions because it lets us know:
- How well we are already allocating resources
- General Sales Velocity (how long deals take) and how much pipeline comes through every quarter that will turn into revenue eventually
- What resources we need to allocate (and how we need to spend them) in the future
A sales forecast isn’t just for the sales department; it plays a role in everything a business plans for the future. Every acquisition, hiring (or firing) spree, merger, expansion, new product release, and pay raise is based on future revenue projections.
Inaccurate revenue projections lead to regrettable decisions. Maybe the company gets overly-optimistic forecasts and spends money it doesn’t really have to expand production it doesn’t really need. Or maybe the company takes growth too cautiously because projections underestimated revenue, and therefore the business loses market share it should’ve otherwise had. Churn may become a problem, as your customer success team is under-staffed due to conservative projections. You can already see the business implications for poor forecasting.
Decisions in the C-suite are backed up by sales forecasts from sales managers and leaders, and those forecasts are collected from estimates provided by sales reps on the ground floor.
MEDDIC plays a key role because it provides a structured method for reps to predict rather than describe. You’ll not only be able to fill your sales pipeline with more opportunities that are more likely to close; you’ll also be able to quantify how much more revenue you’ll be able to reel in over the next few quarters based on that pipeline. This extends to driving additional revenue from your customer base as well.
Of course, like with any B2B sales methodology that depends on data, what you get out of it is only as good as what you put into it.
How to Use Sales Tech Tools in the Qualification and Forecasting Process
Ever hear the phrase, “Garbage in, garbage out”?
Whoever coined that sublime saying was referring to drawing conclusions from data: the result of your analysis has a lot to do with the quality of the data that you use.
If your data is flawed and inaccurate, your analysis will be the same. If your data is accurate, timely, and relevant, you’re more likely to get a realistic outcome.
We don’t need to belabor how dangerous it is to rely on inaccurate insight. Sometimes not knowing anything about a situation is better than knowing something erroneous and full of errors that’ll lead you astray.
The goal is to incorporate good data into the sales qualification framework: information about target accounts and your internal metrics that will help you more accurately pursue the right type of deals and make better projections.
One major reason why data is often incomplete and misleading is due to how sales teams gather and use it. In other words, sales teams often:
- Lack formalized procedures to gather and input data;
- Don’t have a CRM;
- Suffer from low adoption rates of their CRM and other sales tech tools; or
- Use the wrong sales tools; or
- Don’t use their tools consistently across the entire org.
These problems run rampant in the industry. If any of the above sounds familiar, you are certainly not alone.
The right sales tech solution gives you one source of truth for your account-based data that: everyone can access; is easy to use; and features all your most valuable selling motions under one roof, without depending on disparate systems. A Complex sales cycle further accelerates the need for revenue teams to document different details throughout the process so that everyone involved has real-time access to key information such as goals, challenges, the reason for buying and more.
That all members of your organization can use it in a coordinated manner (hooray teamwork!) is exceptionally important. Otherwise, a sales leader has to piece together the true picture without all the relevant data – and they may not even realize what they’re missing. It’s like putting a puzzle together and missing a few pieces (or starting a puzzle not knowing that they’re missing and setting yourself up for disappointment).
Key account management tools incorporated into CRMs like Salesforce are how sales teams consistently gather accurate data in a way that can help find and process more qualified leads and better forecast sales performance.
For example, Prolifiq’s own tool, CRUSH, is a native Salesforce app that gives sales leaders and team members a platform for a sales qualification framework that takes guesswork (and fear of bad data) out of the equation.
Not even the best process can overcome flawed data or improper tools. Sales tech is a critical component that enables success; without it, errors are sure to happen.
Wrapping Everything Up:
MEDDIC, Sales Forecasting, and Sales Tools
In summary, sales success is as much about pursuing a higher percentage of deals that are more likely to close based on what you know about your business, your customers, and your sales strategy.
A qualification framework like MEDDIC lets you not only find more quality deals to put into your sales funnel; it also lets you more accurately predict sales revenue, which results in more efficient allocation of resources across the entire business, not just sales organizations.
Sales forecasting tools are only as accurate as the data you use, and gathering and analyzing data as a team is difficult to do without a CRM optimized for key account management.
If you want to build a better forecasting process, whether you use MEDDIC or another sales qualification process, follow the proven pathway of:
Gather Data > Qualify > Predict > Plan > Win
Sales isn’t just about quantity, but quality. By focusing your entire sales process around qualification and efficiency, you can increase the chances of winning deals – and hitting your numbers.