π¨βπ©βπ§βπ¦ The Decision Making Unit
Understanding every facet of a customer, from who uses a product to who pays and beyond β’ 3 min read
A business only exists once it has a paying customer, so understanding who the customers are and what they want is paramount to a successful venture. The wants of a customer can be multifaceted and often include more than one person, so understanding those different sides can make or break a product. In fact, more often than not there isn't a single person involved in a decision so it's useful to think of these facets as separate people.
A useful framework to describe a customer is the Decision Making Unit (DMU), also known as the Buying Center. This concept was first developed by Robinson, Faris, and Wind in 1967, and I first came across it on Disciplined Entrepreneurship by Bill Aulet.
Roles in the Decision Making Unit
The End User β This is the person who uses the product and gets value out of it. Hopefully, they're also the champion.
The Champion β This person wants the customer to purchase the product. They're typically also the end user, but not always.
The Economic Buyer β The one who foots the bill. They're usually the primary decision maker, and sometimes are also the end user and/or the champion.
The Influencer β Usually subject matter experts, they can influence the rest of the DMU, including the champion and the end user. They tend to be external sources of information and feedback, such as website publishers or friends and family. Sometimes they also have veto power, but theyβre often trusted enough that their word acts as a de facto veto.
The Veto βThe person with veto power can do one thing: reject a purchase. They usually outrank the champion and the end user, such as an IT department intervening on the acquisition of computer hardware or software.
The Purchaser βThey handle the logistics of the purchase. Unlike the economic buyer, the purchaser often doesn't have the final say but adds friction through trying to drive prices down or make more convenient arrangements. They are a link in the chain that needs to be pacified, but not sold to directly.
Whoβs Who?
Different products can have wildly different DMUs, ranging from a single person performing all of the roles to a complex web of people across an organization.
Letβs say Iβd like to buy some Oreos. Iβd be the champion, the end user, and the economic buyer. Iβd also be the purchaser, since I would need to figure out how to drive to the store and where to park. If I was watching my diet, I might look up how many calories there are in a box of Oreos: the people behind the website would be influencers. And if someone in my house is pretty adamant that I eat healthier, then theyβd have veto power.
A less intuitive example, however, would be Google search. As an end user and champion, I donβt actually pay to be able to search for the calories in an Oreo. Thereβs no one performing the role of the purchaser or veto, though an influencer might make the case for using DuckDuckGo instead. And yet, Google thrives. What gives?
Well, selling advertisements against user searches might make it seem like the economic purchasers are the businesses buying the ads, but they constitute a different DMU altogether: those businesses would also have champions, purchasers, and all of the other players, including end users. Their end users, however, would be the people buying the ads and adjusting the demographics of who sees them. Bringing those two customers together is what makes the ad-based business model work.
The Decision Making Unit is a powerful concept to understand what makes customers tick. It becomes especially important to businesses that sell to other businesses since there might be many people with a mandate to ensure certain protocols are followed. However, these concepts can still be insightful for simple types of products that sell to consumers. Understanding and catering to the entire DMU can mean the difference between a successful business and a flailing one.