4 ms·

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

by 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.
- prakash 17y ago
  You just have to ask.
jseliger 17y ago
Yeah. Joel Spolsky wrote about this stuff in his essay on pricing: http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html http://www.joelonsoftware.com/articles/CamelsandRubberDuckie... : Notice the gap? There's no software priced between $1000 and $75,000. I'll tell you why. The minute you charge more than $1000 you need to get serious corporate signoffs. You need a line item in their budget. You need purchasing managers and CEO approval and competitive bids and paperwork. So you need to send a salesperson out to the customer to do PowerPoint, with his airfare, golf course memberships, and $19.95 porn movies at the Ritz Carlton. In other words, there's a natural price delta between end-user software and "enterprise," or whatever you want to call it, software. People seem to keep rediscovering this over and over again.
wavesplash 17y ago
That said, there are times when you want to price high enough to force the issue to the board. Most importantly when the pain your product addresses becomes a corporation-wide priority. You want to get buy-in from the execs before your competitor does and knocks you out of a department level deal.

by edw519 17y ago

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.
prakash 17y ago
You just have to ask.

jseliger 17y ago

Yeah. Joel Spolsky wrote about this stuff in his essay on pricing: http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html http://www.joelonsoftware.com/articles/CamelsandRubberDuckie... : Notice the gap? There's no software priced between $1000 and $75,000. I'll tell you why. The minute you charge more than $1000 you need to get serious corporate signoffs. You need a line item in their budget. You need purchasing managers and CEO approval and competitive bids and paperwork. So you need to send a salesperson out to the customer to do PowerPoint, with his airfare, golf course memberships, and $19.95 porn movies at the Ritz Carlton. In other words, there's a natural price delta between end-user software and "enterprise," or whatever you want to call it, software. People seem to keep rediscovering this over and over again.

wavesplash 17y ago

That said, there are times when you want to price high enough to force the issue to the board. Most importantly when the pain your product addresses becomes a corporation-wide priority. You want to get buy-in from the execs before your competitor does and knocks you out of a department level deal.