6 ms·

Selling to enterprises

66 points by prakash 17y ago

tom_pinckney 17y ago
I vowed after my first startup never again to build an enterprise product for this reason. Plus I don't like golfing and drinking with some random guy in Omaha trying to convince him my product solves one of this top three problems.
- prakash 17y ago
  During my 3 years doing enterprise sales at Akamai, I learnt a ton of things from my customers and met some really interesting people. Not all enterprise sales involves golf and drinking and schmoozing. Edit: I would also add that you tend to learn a lot more about your product from your customers. In addition, once you target a certain industry and speak to all the major players, you get some insight that helps with product, sales, marketing.
  - tom_pinckney 17y ago
    Yeah I didn't mean to sound like that's ALL there is. But I was time and again surprised how often buying decisions had nothing to do with the product, company's need etc. I guess I was perhaps a little naive :)
    - prakash 17y ago
      So was I when I started. There are so many reasons folks buy that doesn't involve our product or company, it's mind boggling.
mscantland 17y ago
When a customer is going to spend more than $100k, they look for a relationship to minimize risk. Golf and similar activities are what the buyer demographic does with their friends. Do people really think that customers that sign up for $10/mo "to-do" apps are more sophisticated buyers than enterprise customers? In my experience, many people who complain about the enterprise sales process are failing for their lack of real domain expertise not their distaste for "schmoozing." They are also usually underestimating the intelligence of their customers and unwilling to build relationships. Disclaimer: My companies do enterprise software. Edit: I've also played golf exactly once in seven years since we started.
edw519 17y ago
The #1 question to ask when selling to the enterprise is, "What are the spending authority cut-offs?" Nothing means more. Funny, in my experience, the 5K and 100K numbers are pretty accurate. I recently assisted in the purchase of business intelligence package. The CIO (my contact) had authority to spend up to $100K. Anything more had to go the board, and that "just wasn't going to happen". One vendor knew what to ask and bid $93K. The two others were much higher. Guess who (automatically) got the sale. The other 2 may have been better, but we'll never know. They were effectively eliminated by rules they never asked about. At the low end, almost everyone has authority to spend up to $5K, even users. They bring in desktop software or SAAS under IT's radar. There's huge demand for solutions to their problems that fit under their spending limits.
- DanielBMarkham 17y ago
  It's interesting you bring up users spending "against" IT's wishes. In larger organizations, there's quite a bit of that going on. IT wants to control the desktop, make enterprise-wide decisions, use favored vendors, have total integration, etc. Users just want their problem to go away. And there have been many, many purchases at the low end based on user problems and not corporate policy. Perhaps you'd call that Commando Enterprise Sales. Go in under the radar, keep a low profile, and spread virally.
  - patio11 17y ago
    Relatedly, you can shave the educational purchase cycle from 18 months to under 3 minutes by selling directly to the teacher rather than to five decisionmakers in three buildings, including two whose sole job is to say "no" to everyone.
- weaksauce 17y ago
  How willing are the people to disclose the spending authority cut offs?
  - edw519 17y ago
    Very willing, especially when it's in their own best interest to make a deal. Remember, these are people trying to solve their problems without going up a level for permission. Of course, any good salesperson will find this out on Day 1.
RobertL 17y ago
Article makes some good points but I prefer to refer to the "enterprise" market as the "Corporate IT" market. There is some huge potential here and this is mostly because of the points brought up by dixon. I've spent a lot of time the last couple of years trying to figure out clever new ways to market to these folks and if I ever figure it out you'll probably be reading about me and my clever techniques on techcrunch.
rgrieselhuber 17y ago
How does this apply to subscription-based models? I'm guessing that the valley of death bounds change when you're talking about monthly recurring revenue. If most managers can approve a $5,000 purchase without much hassle, what's the magic number for monthly subscriptions? Is it $5K/12? Higher? Lower? Also, with subscription-based sales, you often have the opportunity to sell more plans to the same organization if your product solves their problem. Is there some magic number that people have experienced here? If it's proven by one business unit, can you get enough "grass-roots" support to equal something close to $100K/12? That would be nice because it cuts down on the timeline of the initial sale and is a natural way to recruit internal champions.

66 points by prakash 17y ago

I vowed after my first startup never again to build an enterprise product for this reason. Plus I don't like golfing and drinking with some random guy in Omaha trying to convince him my product solves one of this top three problems.

prakash 17y ago
During my 3 years doing enterprise sales at Akamai, I learnt a ton of things from my customers and met some really interesting people. Not all enterprise sales involves golf and drinking and schmoozing. Edit: I would also add that you tend to learn a lot more about your product from your customers. In addition, once you target a certain industry and speak to all the major players, you get some insight that helps with product, sales, marketing.
- tom_pinckney 17y ago
  Yeah I didn't mean to sound like that's ALL there is. But I was time and again surprised how often buying decisions had nothing to do with the product, company's need etc. I guess I was perhaps a little naive :)
  - prakash 17y ago
    So was I when I started. There are so many reasons folks buy that doesn't involve our product or company, it's mind boggling.

mscantland 17y ago

When a customer is going to spend more than $100k, they look for a relationship to minimize risk. Golf and similar activities are what the buyer demographic does with their friends. Do people really think that customers that sign up for $10/mo "to-do" apps are more sophisticated buyers than enterprise customers? In my experience, many people who complain about the enterprise sales process are failing for their lack of real domain expertise not their distaste for "schmoozing." They are also usually underestimating the intelligence of their customers and unwilling to build relationships. Disclaimer: My companies do enterprise software. Edit: I've also played golf exactly once in seven years since we started.

edw519 17y ago

The #1 question to ask when selling to the enterprise is, "What are the spending authority cut-offs?" Nothing means more. Funny, in my experience, the 5K and 100K numbers are pretty accurate. I recently assisted in the purchase of business intelligence package. The CIO (my contact) had authority to spend up to $100K. Anything more had to go the board, and that "just wasn't going to happen". One vendor knew what to ask and bid $93K. The two others were much higher. Guess who (automatically) got the sale. The other 2 may have been better, but we'll never know. They were effectively eliminated by rules they never asked about. At the low end, almost everyone has authority to spend up to $5K, even users. They bring in desktop software or SAAS under IT's radar. There's huge demand for solutions to their problems that fit under their spending limits.

DanielBMarkham 17y ago
It's interesting you bring up users spending "against" IT's wishes. In larger organizations, there's quite a bit of that going on. IT wants to control the desktop, make enterprise-wide decisions, use favored vendors, have total integration, etc. Users just want their problem to go away. And there have been many, many purchases at the low end based on user problems and not corporate policy. Perhaps you'd call that Commando Enterprise Sales. Go in under the radar, keep a low profile, and spread virally.
- patio11 17y ago
  Relatedly, you can shave the educational purchase cycle from 18 months to under 3 minutes by selling directly to the teacher rather than to five decisionmakers in three buildings, including two whose sole job is to say "no" to everyone.
weaksauce 17y ago
How willing are the people to disclose the spending authority cut offs?
- edw519 17y ago
  Very willing, especially when it's in their own best interest to make a deal. Remember, these are people trying to solve their problems without going up a level for permission. Of course, any good salesperson will find this out on Day 1.

RobertL 17y ago

Article makes some good points but I prefer to refer to the "enterprise" market as the "Corporate IT" market. There is some huge potential here and this is mostly because of the points brought up by dixon. I've spent a lot of time the last couple of years trying to figure out clever new ways to market to these folks and if I ever figure it out you'll probably be reading about me and my clever techniques on techcrunch.

rgrieselhuber 17y ago

How does this apply to subscription-based models? I'm guessing that the valley of death bounds change when you're talking about monthly recurring revenue. If most managers can approve a $5,000 purchase without much hassle, what's the magic number for monthly subscriptions? Is it $5K/12? Higher? Lower? Also, with subscription-based sales, you often have the opportunity to sell more plans to the same organization if your product solves their problem. Is there some magic number that people have experienced here? If it's proven by one business unit, can you get enough "grass-roots" support to equal something close to $100K/12? That would be nice because it cuts down on the timeline of the initial sale and is a natural way to recruit internal champions.