Authority vs. Influence: How to Spot the True Economic Buyer

Introduction: The Most Dangerous Assumption in Enterprise Sales

One of the costliest errors in enterprise sales is made all the time.

That is, the salesperson assumes they know who has authority in the company they are doing business with.

They meet a high-level decision-maker, notice their important title, and think they have identified the right decision-maker. Or they develop an excellent relationship with a highly influential decision-maker but mistake it for authority.

Either way, they make a grave error. It is because in some large companies, the decision-making authority is not with the decision-maker. And sometimes, the decision-maker does not have the authority to approve the deal.

This causes unnecessary delays in the sales process, which could have been avoided. And that is precisely why it is essential to learn how to identify the real economic buyer in enterprise sales.

Understanding the Concept of Authority and Influence

In order to manage enterprise transactions successfully, it is imperative that you differentiate between authority and influence.

Authority comes in a more formal nature. It refers to role and responsibility. It belongs to one who controls the purse strings, has approval rights to make an investment, and is ultimately responsible for making a decision.

It is known as the Economic Buyer.

On the contrary, Influence is more informal. It is related to shaping the minds, influencing the discussions and influencing decisions. They can fast track transactions, align stakeholders and can even become obstacles in a transaction.

Both the terms are equally significant but not the same. Some examples would be:

• A department head can be very supportive of your proposition but may have no budgetary authority.

• A technical expert may shape the requirements but may not hold any authority in making the decision.

• Finance professionals may sign off a deal but depend on others for their inputs.

Differentiating between the two concepts will lead you to identify the Economic Buyer.

Why This Distinction Matters

Not distinguishing authority from influence poses great risks.

First, the most frequent risk that could occur is that of misalignment. Even though the negotiations might look very successful, as there is support from influential people involved, and things are progressing well, once it comes to making a final decision, the negotiation gets stalled due to the lack of alignment with the Economic Buyer.

Second, it is likely that one is engaging with the wrong stakeholder. While spending all efforts on forming good relationships with influential stakeholders, no effort could be made in terms of dealing with the Economic Buyer.

In addition to this, there is also the risk of having a false sense of security and accomplishment.

Even though everything seems to be going well, if the decision-maker was never brought in, it means that nothing will happen in the end, as no decisions will ever be made.

This is why determining the economic buyer in enterprise sales is crucial.

Signals That Point to the True Economic Buyer

Searching for the Economic Buyer isn't just about checking titles. Responsibility, accountability, and decision-making should come into play. There are certain signals you can spot that point to the right candidate.

First, they have the budget. An Economic Buyer is someone who has control over financial decisions. They know how to allocate money and invest in various tradeoffs.

Second, they are accountable for results. This particular person will be held accountable for what your product or service does in relation to the key performance indicators of their business.

Third, they hold the ultimate decision-making power. While other parties might help them decide, ultimately the answer will rest with them.

Other signals might include:

·         Questions are asked that are relevant to the bottom line of the business

·         Risk/reward assessment in terms of finance

·         Participation in closing conversations

Spotting these signals is an integral step for enterprise discovery.

How to Navigate Both Roles

Enterprise deals are complex and involve the engagement of both authority and influence in order to close.

Failure to consider one and ignore another will lead to an imbalance. To start with, it is critical to connect with influencers.

Influencers are important because they help create the right environment inside the organization. They can help sell your solution internally and provide great information on what goes on within the organization. Developing good relationships with them is critical.

Second, it is important to connect with the authority to validate your solution. Even though you might engage with influencers to push the deal, the Economic Buyer needs to buy in at the end of the day. Thus, you should talk to them.

Third, single-threading should be avoided. Enterprise deals are complicated enough that you cannot rely on a single thread, whether they have influence or not. Thus, in addition to dealing with the Economic Buyer, you also need to connect with various influencers inside the organization.

In conclusion, this is an important element of any successful economic buyer strategy.

Maintaining Momentum and Control

One of the major hurdles that arises when selling to enterprises is balancing momentum with control.

Influencers create momentum through their actions. They spark interest, encourage discussion, and push the process forward.

However, if the Economic Buyer does not align with the influencers, then this momentum may result in nowhere.

On the other hand, authority creates control. If the Economic Buyer gets involved and aligns with the influencers, then the deal will be approved smoothly. It becomes easier for the buyer to make decisions.

The point here is not about whether the seller should emphasize influence or authority. It is about bringing both on the same page.

Common Pitfalls to Watch Out For

Even seasoned salespeople commit errors while dealing with authority and influence.

First, salespeople often make the assumption that high-ranking positions equate to authority. Not all organizations centralize decision-making. The senior stakeholder may have a strong influence but lacks authority when it comes to budget allocation.

Secondly, some salespeople shy away from interacting with the Economic Buyer. The salesperson may depend entirely on the champion or influencer to articulate the message. It results in poor messaging and loss of control.

Finally, salespeople sometimes ignore the role of influencers. Salespeople may focus exclusively on authority. They risk building barriers with other stakeholders. Without their input, the transaction may become challenging internally.

These pitfalls hinder salespeople's ability to connect with the economic buyer in enterprise sales effectively.

Conclusion: Deals Close When Authority and Influence Are Aligned

In enterprise sales, it takes more than identifying all the parties involved. It requires knowing not only who influences the process but who ultimately has authority to make the call.

The top Account Executives know the difference between the two. They understand that while influence creates conversation, it is authority that makes things happen. They develop relationships with multiple parties within the organization, yet remain aligned with the Economic Buyer.

Enterprise sales discovery will help them understand their role within the organization and how decision-making works.

What they do then is align both aspects. As long as influence and authority work in harmony, closure comes easily. Momentum transforms into commitment. Conversation becomes a decision. Opportunity becomes profit.

This is what winning enterprise sales looks like.