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Bowery Capital > Sales  > The MEDDICC Sales Qualification Process with Russell Sachs: Full Transcript
Work Market

The MEDDICC Sales Qualification Process with Russell Sachs: Full Transcript

This is a transcript of the Bowery Capital Startup Sales Podcast – The MEDDICC Sales Qualification Process with Russell Sachs (Work Market)

MB: Hey guys, welcome back to the studio with my good friend Russell Sachs, he is EVP of Sales and Business Development at Work Market. Welcome to the show Russell.

RS: Thanks. Thanks for having me.

MB: So give us a little background on you and who you are and where you came from. You obviously had a great career as both seller and manager of sales, people on teams and just tell the listeners sort of where you came from and who you are.

RS: Yea great. I actually had a weird start to sales. I actually started my career as a trial attorney. I spent 5 years doing complex litigation and you know the late 90s went and realized there had to be a better way. I started to get fascinated about technology and what was happening in the evolution of technology. I have a good friend who was a venture capitalist and he was incubating an idea around e-mail, because at that time e-mail was the killer app. You know, we sat back and thought about what people needed. I understood it from the business side, because if email was down, I couldn’t communicate with clients, opposing council, the courts and so we went down the path of building a solution that focused on helping organizations to make smarter decisions on how to put together the email environment, optimize, routing optimizing traffic, and shortly after we raised our first rounds, the Bubble Burst in late 90s, we ended up recapitalizing the company. We knew we were in a great space and we started a new company called Message One and Message One was what really got me like the bone and the chops to kind of where I am today. It was focused on email high availability in email archiving and for period of 2003 to 2008, we just were seeing great growth, just hyper-growth, so if their primary email system went down, rather than spending all this money for second mail system, may it have functional email environment 80% of the functionality and 20% of the cost. Ended up scaling up business, running sales and then later an enterprise sales team and ultimately sold that to Dell and when Dell acquired us, I ran Dell’s SaaS business for few years and they had acquired a company called Grow and once they acquired Grow, I moved into their services line and ended up growing in learning half of North America and shortly before I left, all the North America for services Sales and that is kind of my back and how I got into it.

MB:And then how did you so, now you are at Work Market, what sort of lead you from Dell and that experience to Work Market.

RS: Well, you know one thing I will say was I realized that I really was passionate about leaving mentoring people. I had a fantastic mentor who really taught me the ropes around sales and proper software sales and when I was at Dell, I learnt a ton around operating a bigger organization, managing basically a network of field reps across United States, but I missed the passion of creation and one of the privileges we get from being an early stage company or in an early stage companies you are essentially creating something where nothing existed before. A great opportunity, a great time for me to get back into the scene.

MB: Were you in New York prior or were you?

RS: I was. I was actually working out of Texas and then after about a year and half, I moved back to New York.

MB: Got it. Got it. So give us may be just a transition into Work Market. Just give us background of the company where you were when they started and where they are after that?

RS: Great, so when I first met Work Market, what I found were two fearless founders that were really taking advantage of the new way that people work. There is an explosion in freelancers and contractors. You know more and more people are making a lifestyle choice to become a freelancer or a contractor. Enterprises love the idea for the operational efficiencies, the cost savings, the problem is if they don’t have the proper tool, software and network to actually harness this fundamental tectonic shift, you know it is impossible and so what Work Market does is that they insert themselves right at the forefront and they allow enterprise companies to manage the entire process of finding, verifying and managing and engaging freelancers at scale and the focus is how do I hire hundreds of free lancers and put them onsite to a particular location to do a particular task, without sacrificing quality. So when I met them, they were doing about couple of hundred thousand bucks in transactional revenue and what that meant was every time a job float through the platform, you know they would take piece of the action and they hired me to change to go to market strategy and really change the way we sold Work Market. When I got there, I started moving us towards SaaS based model where subscription license 1, 2 or 3 years and ultimately we would have a commitment from the customers as opposed to come and go as they pleased and so that was a really fundamentally challenging thing because the people that we had at that time had never sold SaaS before. They were transaction based employees.

MB: So did you inherit any sellers?

RS: Oh yeah! Inherited sellers and I actually trained my sellers on MEDDICC which we are going to cover today.

MB: Got it. So may be that transition, you sort of are in the organization, you have adopted the process, Russell just mentioned called MEDDICC which is the topic of our discussion. How did you kind of come across this you know MEDDICC framework and was it invented by you what was the inspiration, how did you sort of seek to employ this at Work Market?

RS: Yes, so I wish I could take the credit for creating it. I will take credit for facilitating it and bringing here to North East, but you know I had a tremendous sales leader in my previous life and what I learnt about MEDDICC was there are lots of different ways, lots of the programs that cost a whole lot of money to train people on how to think about and frame customer conversations and MEDDICC is, it is such an easy way. It is like 8-min app, it is such an easy way to really understand where you sit in an account and do it officially and you know I implemented it at Message One and it was implemented at Message One and it changed in a way our trajectory and I used it ever since the first time I was introduced to it and I still use it all these years later and it is just basically all the most obvious things that people fail to ask themselves where they sit an account and so it is a framework in a process that I have instilled on my team and benefits of MEDDICC is you know it aligns your entire team so everyone is speaking the same language. Everyone is using the same framework and analysis so that when you go through forecasting and understanding where you sit on a deal, judgment is really taken out of the equation. You are all speaking the same terms and understanding what the same questions you need to ask to figure out where do I sit on an account, what are my chances of winning this account, what do I know and what don’t I know. And really, it just gets everyone more aligned.

MB: Sure. So other than alignment, a lot of the podcasts that we record and talk to are generally speaking to early stage SaaS founders just before we dive into the actual process flow in the background of every component of MEDDICC, when do you think it is appropriate for a company to implement this. Is it, look immediately when you start selling, is it hey I have got a few SDRs or AMs and they need to be a little more aligned. Is it larger all sales organization, when, in your experience because you have been sort of small, medium, and large companies on the sales side and employed this strategy in all organizations and you know give kind of the younger SaaS founder an idea of when this is appropriate to really get behind.

RS: I would say the beauty of MEDDICC is that it could be used by the founders themselves. This is something that starts with the founder. When you are getting that first new deals, the questions and analysis do not change, so what I know about it is, it is a system that scales and in fact, I would tell you, I would submit it is better for early stage and mid-stage than it is for fortune 50 companies that you can spend months of training and hundreds and thousands of dollars training your sales force, so this is designed for a founder to embrace and then role it out across the organization.

MB: Got it, makes sense. So may be why don’t you just give you kind of a high level of what MEDDICC actually means in practice, what are the sort of 7 modules that you are going to talk to listeners today about.

RS: So MEDDICC is an acronym and it really stands for 7 most pivotal things that you need to think of and analyze to understand where you sit in any given deal, alright so MEDDICC stands for Money, Economic Buyer, Decision process, decision criteria, identifying pain, champion and competition and we will go through each one of those modules but if you think about what do I really need to know, so understand whether or not I am going to win this account, those are things that you really have to understand where you sit and with each of them, you could either be sitting in a great position, we call that Green Flag or you would be sitting in a bad position, we call that Red Flag or it could an uncertainty which means you have to understand more in that particular module.

MB: Got it. So may be dive into money, the first module.

RS: The most obvious one, so money is really about understanding, is this budget and so who owns the budget so the key question is where is the funding vehicle and does that funding vehicle exist and how do you establish a business benefit, a quantifiable business benefit or return on investment to that customer. Why are they talking to you right? Is there a return on investment for that? So the key questions are some of those that you need to themselves do I understand who owns the budget. Is that funding available right now? If it is not available, is there a process within your organization to get that money to go pay for it and do you have to cost justify this purchase and that is what you are thinking about when you are thinking about money. Just because someone is talking to you and saying they love your product and they are getting all excited doesn’t mean that they can buy it and for us especially when you look at the scale, you have limited resources in finding that qualified buyer that has money to buy something right now.

MB: Sure and may be then to sort of follow up on the money point, you have obviously thought through and employed some tips and tricks on ways to really understand where is the funding vehicle so may be if you could just touch a little bit on that as the M component.

RS: Yes, the first thing I always coach people on is triangulation of information. Like sales people love anybody that talks to them, by nature, gravitate towards the first person that shows us some love and just because you are speaking to person A, and person A tells you oh! I can pay it, Oh! Johnny can pay for it, doesn’t necessarily mean that they in fact are the person that can pay for or Johnny could pay for it, so triangulation. What does that mean? That means I should be talking to more than one person in an account and I should be asking the same questions, hey who really owns this and at the end of the day who has the money to buy this? Once you get more than one person pointing in the same direction, you start to triangulation information. You want to find the person that also can pull the strings so just because money isn’t available, find the person that is unconstrained by budget availability. The other thing I would tell you is suggest to somebody, hey sounds like this is really important, why haven’t you done something before and what does it cost you to not take care of this problem. Like if you just keep going the way you are going or is there a cost associated with this. The more information you get, easier it is for you to cost justify a purchase.

MB: Sure, well that makes sense. So that is money. May be move on to economic buyer, E of MEDDICC.

RS: So not only do we want to know if there is budget available, but at the end of the day if you want to understand who is the ultimately signatory for this project. Who is the person that has final authority to yes and that is tough one because everyone says I own this, I own this, I am the person that controls it but at the end of the day whose John Hancock has to go on that signature. That is the person who is holding the strings and that is the person that can say even if everybody else says no and the tricky thing is finding the economic buyer and that is finding the person that owns the budget category is a trick. Remember you can’t sell something to somebody who can’t buy and that is a fundamental trap that a lot of sales people fall into. They are selling to someone who at the end of the day cannot purchase.

MB: And so that in my opinion one of the hardest thing to really understand who exactly is the right person, what do you think of some and what are some of the things that you employ while marketed. There are other companies that you have been out where you have been able to learn from this.

RS: The things that I always tell me my team to think about one, betting on how much it cost is going to be different person that has ultimate say, so the fact is to determine who the economic buyer are, is the dollar amount. They are sometimes market conditions. In good market conditions, it may be easier to sign off than tougher more conditions and also is there a familiarity with me or my organization or does one of their competitors have, it is funny how quickly the economic buyer emerges when a person finds out that their main competitor is using it, so there are all kinds of things that you can really use to identify right, so what I would say is some of the questions that you should ask always is, is the economic buyer aware that I am actually talking to someone in the organization? I may not have direct access to them right away but do they know what we are talking. Have they agreed that there is a project and a problem that needs to be get fixed? Do I have access and if not, how do I get access? So a lot of times, I coach to my team, hey the person that you are talking to, they may be an influencer so get on the other side of the table, make it about you and him or her together, how you are going to help him or her look like a rock star to the economic buyer, right. You got to team with them. You know some of the difficulties are sometimes we are blocked. The person doesn’t want to share information or you have a trouble figuring it out or if I am a younger sales person, I may be uncomfortable talking to the Chief Financial Officer of Fortune 100 organization, so you know what always try and show why it is in person’s best interest to bring the economic buyer on early. Use your manager, use the CEO, use your advisors, use your board members to try and get into the economic buyer for someone that is higher in the organization that you feel comfortable talking to. Triangulation, again just like triangulation for money, triangulate who the economic buyer is. Luggage partners practice and prepare and those are the things that I think are essential to cover who the economic buyer is.

MB: So we got money. We got economic buyer. Walk us kind of through decision process, the first D in MEDDICC.

RS: So, the decision process is once I have figured out that this is the product or this service that makes sense for me and my organization, what are the series of steps that an organization must approve or go through in order to approve your software or service, who were the individuals that can make go, no go or advance, not advance decision. So we have to figure out does this got to procurement, does this go to legal, do I put it or submit it before an advisory board and these are committees that needs to approve. So there are so many different things that happen depending upon how big of a project this is, how important of a project this is, how expensive it is, so understanding from the point someone says yes this sounds like it is the right solution, now the song is just beginning, now you have to figure out how do I navigate through the organization.

MB: Right and on that point, what are some sort of tips and tricks, because this obviously comes up a lot and in many cases you are forced into processes that you didn’t even think existed

RS: Yeah. So, I would say first, triangulate, right? Walk when you have somebody that is helping you navigate. You want to ask what are all the steps that need to happen, right? Again, remember you cannot give your pound of flesh to business supporter if procurement is going to come and then look for their kind of flesh, so it is all about making sure that you are playing in the confines of the rules of the game. Who is the technical evaluator? Who is the financial evaluator? Who is the legal evaluator? Try and break these out. Do I understand the reporting structure? So do I understand the timeframe? A lot of times I tell my team, once they think they understand the decision process to send it back and have somebody confirm it that yes these are the steps that we go through to go from idea to execution.

MB: That is a great point.

RS: All along the way and I would say this for every one of the seven steps of MEDDICC. You want to constantly test and confirm what you have learnt, so if somebody tells you procurement is not involved and you go down the process, before you end those negotiations, you confirm that procurement does not step in, right. You have to constantly test all along the way and by the way, one another thing, always anticipate who is going to try and stop this, or is there anyone who is against this and how do I diffuse that person or that group.

MB: Now that is enormously impactful if you do know that early on. So we have got money, economic buyer, decision process, talk to us a little bit about decision criteria and may be touch a little bit on how that correlates what is different from process component, because there is some similarity.

RS: So the criteria is the basis upon which all the players in the decision process will actually come to go and no go decision, so what are all the features and what are all the outcomes that need to happen in order for us to say yes or no, I want to buy your services, say yes or no, I want to buy your solution, so it is really just one of things that will go into their evaluation process and remember each step in the decision process probably has its own set of decision criteria, so if I am doing the technical evaluation, what are the key things that you need to see for my solution in order for you to give thumbs up to yes this is the product or the service that we are comfortable going forward with.

MB: So process is the full lifecycle of the sell that criteria may sit in within each component of process.

RS: The processes are the steps, criteria it is the decision factor that go into that and one of the key things in decision criteria is to help influence the criteria by which the person or group of people will actually be basing their decision, so what I mean by that is if your secret sauce is something that separates you from the pack, your secret sauce should be inserted into the decision criteria.

MB: Sure and now that makes a lot of sense and then there are sort of tips and techniques in that decision criteria process, is it similar or different, how do you guys think about that?

RS: Yeah. You know there is a saying that the first one in gets to set the tracks, second one gets to diffuse the landmarks, so if you are the first one in there, you want to make sure that when you are shaping the conversation, this is your opportunity to talk about in the course of your conversation what are the unique differentiators that you or your organization has relative to all your perceived competitors and focus on those and I would say focus on three or four, don’t try and give them the laundry list of everything that you do better, three or four fundamentally game changing decision criteria that make you unique get them in early and make sure that you harp on those points because they will be inserted when your competitor steps in, now they got to go figure out how do they get around your unique differentiators, huge points. This is all about you know, it is a game of chess.

MB: Yes absolutely. We are close with this as concept as far as setting the landmarks if you can be in there earlier than other people it is hugely important.

RS: And by the way on the other side, if you are a great sales person, you are always the first in so you need to anticipate what your competitor is doing and diffuse those landmines before they prompt you.

MB: Right. So we got money, we got economic buyer, we have decision process, we have decision criteria, may be move on to identifying the pain.

RS: Yes, so look before you sell anything, your prospect has to recognize that there is a need for change. So either it is there or you have to educate them and that is really what the pain is. Do I understand why this company is talking to me? Do I understand what problem I am truly solving for them, and more importantly, does that company appreciate and put a value on the problem because you may have the greatest solutions since sliced bread and I will tell you my last company we had great solution but no one had real pain on what we were solving and that was the biggest issue, we were lucky enough to pivot, sometimes they don’t have the pain.

MB: And what do you, as this comes up with the lot of companies, hey, I am sort of trying to identify the pain point but there isn’t really as a huger need or maybe I am not presenting it effectively or those sort of techniques that you guys use at Work Market or just broadly speaking that you can suck this out and then I want to sort of keep on identifying pain because I do think there is a component to this that goes unnoticed but can you just gave us some tips.

RS: So like anything else, you have to be expert in your path, in your path, your solution and in your area of expertise so you have to understand how to position your product and how to ask great question to uncover. You cannot just walk in and say do you have pain around freelancers and contractors, you are not going to get the answers right, so how do I use questions to elicit a great response and I would tell you. I wouldn’t recommend for the folks listening that you go to law school for this but one of the great things to be a litigator was I learnt how to ask questions. Right. To uncover pains in an innocuous way. So practice, make sure you have learned and practice within your organization. What are the key questions that we can use to uncover pain and make sure that your prospect understands ramifications of not addressing the problem.

MB: Right.

RS: Sometimes you have to bring it to light. Sometimes they are so used to bang in their head against the wall that it actually feels normal to them. And if you take the wall away, all of a sudden it’s like have you ever sat in the room and didn’t notice the noise until it stopped?

MB: Yeah.

RS: It’s kinda like that they are telling, right. I keep banging my head against my wall that sometimes that we don’t even realize how much money we can save or how efficient that you can make the organization. So you have to bring that to light. Find out what the alternatives are to address the pain. Right. Find out how this pain conflicts with one of their key initiates. One of the things I always owe to the sales team is don’t make it about you. Make it about the customer, what is the customer’s key goals? Read their statements they have published, what is the CEO’s goals they have set for the coming year? And try to align how your product would help them?

MB: Just to close in this point, I mean we find a lot of sales people that are not effective at identifying pain or in some senses the product isn’t addressing a large enough pain. I don’t know if you have any thoughts or coaching techniques. Is this something you immediately sort of go back to your CEO with or is it generally a sales problems? How should young SaaS founders if they are on this point of identifying pain, it tends to be the biggest issue that comes up in many of our companies that we hear the most. So just in case you had any thoughts of how to counteract it or things to think about?

RS: I do and its one of the biggest challenges and its all-round priority. So being great sales rep doesn’t mean, I need to close every single deal that comes in my way. It means I need to have a big enough pipeline, so that I can really focus on the folks that are ready to solve the pain as it comes. So part of it is building enough pipeline, right, so some people you have to develop the pain, some people have that pain immediately. If you are a sales representative, you are unsure of the value or how much pain you company, your offering really has. Sit down with the founders and say them, “Hey, when you built this, what was your inspiration behind it. Where did you hear this? What made you do this?” Talk to the original customers that they bought in or leverage the companies that gave them the courage to go do this. Because in there you will find the nuggets that you can take with you to sell. People love to buy when they have familiarity, so use stories. One of the biggest techniques I tell my team is to use a story of a relevant company that was going through something similar and make it, bring it to reality. “Hey, I had a customer just like you. They didn’t realize how much this was impacting them, we help them build a business case to show them how our product can really you know drive 30% cost savings, deliver first call resolutions that much quicker and so… and by the way XYZ corp now has put 40% profitability back into their company without even realizing.” So its stories that help you get there.

MB: Excellent, so money, economic buyer, decision process, decision criteria, identifying pain, walk us through sort of champion and what that really means.

RS: Champion is I will tell you by far and away the most important of all these points surprisingly enough. If you don’t have a champion, you probably don’t have a deal. And sales people tend to strove between a champion and a coach. A coach is going to tell you what is going on in the organization. A champion is someone that is selling for you under your behalf, when you are not around. So this person and it can be more than one person, right. They sell my solutions when I’m not around. They have an emotional decision and commitment to the product, to your solution. There is usually a win for them internally by evangelizing change. And so a champion is at the end of the day they have credibility, they have informants within the organization and they have a personal win. And that is hugely important.

MB: And how do you may be just from again to stick on the theme of tips and techniques, how do you sort of find the champion or something you guys have learnt walk us through that.

RS: Ya, so you know I always tell my team, are you getting high in the account, wide in the account? So you need to talk to more than one person. Don’t hang your hat on one person, that is the case of death in a sales forecast. Talk to as many people and ask people, “Hey, sounds like John really has a lot of informants in this company. Right?” Is that the case, you want to find somebody that’s a mover and shaker in the organization. Typically when you are looking for a champion, you are looking for someone who may be new from outside, that wants to show and make changes and you are the catalyst that they are gonna make those changes. You know look for someone who has recently been promoted and wants to put their stamp of approval. Look for somebody who marches to their own beat, swims their own the tide. That actually cares deeply and passionately, so we focus on someone who got a personal win, or somebody that will truly differentiates and stands away from the pack.

MB: Got it, makes sense. Money, economic buyer, decision process, decision criteria, identifying pain, finding the champion or champion…

RS: That was like one of the thing like the champion things will go wrong. If sales was easy, everyone would do it and everyone would bust their quotes but you are always gonna be thrown curve balls. And you are gonna need a champion to help you not only let understand what the scores within the organization but to help you right size the ship sometimes when things turn upside down. Remember not only you have a champion but your competitor may have a champion. So you need to understand who is my champion and who is competitors champion. Who’s got more power in the organization? Who has the ear of the economic buyer, it’s not the economic buyer themselves. Those all things you need to think about. I love this stuff, this stuff gets me so excited.

MB: And the last component of MEDDICC competition, can you give us kind of high level there and what that means?

RS: Yeah, we talked a little bit about this. Right. So when you are talking about the competition, you need to understand what is my competition, right. What is their position, how are they gonna sell against me and you need to anticipate their strategy. And you need to think about how the competitors lining up in the same MEDDICC. Like they should be going through their own MEDDICC analysis. And so do you understand who the competitors are? Do you understand what their key strategies are? Do you understand how do they diffuse their landmines and how to set your own traps and are you anticipating their moves? Sales is about strategy, its about being thoughtful, its about listening to the customer and its about reacting in a smart way to what you are hearing, to the information you are being given.

MB: Got it. And you have touched on a bunch of this but may be just give our listeners some tips and techniques there as well just to close it out.

RS: So first of all anyone, anytime I hear that there are no competitors in the deal, I always like come on right. Are you sure right? What are the competitor’s strategy? How do I neutralize my competitor really if I’m in there afterwards? Hey make a smart decision, if you are in there, if you received in RFP and I hate RFP let me just say that. But if you received an RFP, someone just had written it. Is the game decided already before you went through it, if you are dealing with limited amount of funds and limited amount of resources, is it worth the pursue? Where you have to make these starts along, go through the stop process a long way. So anticipate, but don’t assume, you want to set traps, you want to be able to predict the pitch and then diffuse what’s coming at you. And you want to force the competition to react. Remember, you got to stay ahead, anticipate the moves, think three steps ahead.

MB: Perfect, so that is the MEDDICC process: money, economic buyer, decision process, decision criteria, identifying pain, champion and competition. Any final thoughts for the listeners?

RS: Look like anything else this is something that takes practice, it sounds obvious as we go through this, hopefully you are like yeah of course why don’t I think about that? Great tips, this is something I will tell you that, the more you practice at it, the better you will become and the more successful you will become in your own sales pursuits. Its worked for me, its worked for my team and I encourage everyone to practice this and make it your own.

MB: Excellent, for the listeners, we are gonna have Russell’s presentation of this actually up on the blog. He has a nice PowerPoint framework that lays most of what he discussed out, so well will have that up in conjunction with the release of this podcast and just wanted to thank you for coming in. Really appreciate it.

RS: Thank you for the opportunity. Really appreciate as well.

Nic Poulos
Nic Poulos
Nic is a former Partner at Bowery Capital based in New York. Prior to forming Bowery Capital, Nic was an Associate at AOL Ventures where he helped drive investment in and support of over 20 companies, primarily in the enterprise software space. Before AOL Ventures, he served as a Manager at Advertising.com, leading various business development initiatives focused around ad tech and sales. Earlier, Nic worked as a technology investment banking analyst at GCA Savvian Advisors in the firm’s Internet group. While there, he participated in the acquisitions of Broadband Enterprises and Register.com, as well as various early- and mid-stage private financings. Nic holds an A.B. in History from Princeton University.