4 ms·
LOI's for enterprise clients are totally fine and tying it to a trial is common in my experience, although in my experience that is for trials that last months
by davismwfl 7y ago
LOI's for enterprise clients are totally fine and tying it to a trial is common in my experience, although in my experience that is for trials that last months and may take weeks to months to configure and setup. We have used LOI's quite a bit to help us find the right business model and to gather support before we were actively making final sales. It also can help you show intent and early demand to investors.
Overall enterprise clients generally are quite receptive to these, at least for more complex products, as they are not contracts, simply non-binding letters which generally also do not require much if any legal review. If you put detailed terms into the LOI that is when things can get stickier and then legal review becomes necessary at most enterprises.
What are you trying to use the LOI for, if you had 10 in the next 2 months what would change? In my view a product that can be tried by an enterprise in 7 days means there is not a ton of complexity to the product and likely a low barrier to entry so an LOI may be useless or worse delay trails and conversions. If after 7 days you know if they are buying or not then why do an LOI? Reality is it may take 1-2 weeks to get an LOI done at a fast moving enterprise and a month wouldn't be atypical at many.
If the product takes 2-4 weeks of setup or you need to install equipment etc at their site than an LOI would be smart to show intent. But you'd still have to define why you want an LOI and what comes after. Is it just because you want to gauge their interest before spending weeks configuring the product, then ok. Is it to show investors demand? If so then it may not help you a ton, as the investors will wait to see LOI to conversion rates since the trial period is so short.