The Enterprise Sales Game Has Changed. Have You?
As a venture firm that focuses exclusively on enterprise IT and has backed more than 100 companies, we have witnessed a wide variety of different sales models. Scaling a business rapidly requires the marketing, sales, and product design to all “fit” the target customer in just the right way, and “How are you going to sell this?” is always one of the key questions we discuss with new entrepreneurs.
Selling to enterprise customers is rarely a simple undertaking, as countless veteran salespeople will tell you. The “relationship building” processes in business are often complex—from lead generation to qualification, initial contact to presale, sale to account management and support. On top of that, decision-making cycles can take more than a year with numerous hurdles to clear in the IT, finance, budgeting, and legal departments.
But in the past decade there has been a radical transformation in the enterprise sales process. Today, the most effective relationships are built on performance, knowledge and insights. Making inroads via existing relationships is no longer a guarantee of success. The steak dinner and golf game are out, and making your sponsor look like a champ through actual results is in. Indeed, enterprise selling is now more about “what” you know rather than “who” you know, and the time to revenue can be much shorter.
It’s a new play book, and it requires a different team structure and mentality. Here are five methods we have seen emerging companies use effectively to break into enterprise accounts:
1. Start with a line of business manager. The IT department is no longer your primary target. Decision-making has shifted to the business managers—the do-ers, if you will. If you can convince a functional group head that your service or solution can help drive her business with clear ROI, she will champion the process of getting through the other hurdles to close the sale.
2. Offer a rapid trial. Business leaders are busier than ever and won’t take meetings with every new technology provider that comes calling. To take advantage of this new approach, products and services need to be designed such that a rapid trial (meaning install and go with little to no training required) validates the value proposition. If done effectively, with proper discipline and follow-up, successful trials will lead to broader discussions about where else the solution can be deployed within the company.
3. Take the grassroots approach. The Internet has leveled the playing field for smaller companies, allowing them to find success without having to start at the C-suite. Dropbox, the consumer-facing file sharing company, is a great current example of this kind of selling. A freemium service with a viral business model, this cloud-based storage option encourages users to help the service grow by inviting more friends or spreading it through the workplace. By offering a digestible product lower on the food chain (free storage for personal use), Dropbox can take hold in the enterprise and secure larger sales. This model of online marketing and viral dynamics allows big companies to get on board in a new way, and behooves sellers to target a wide range of prospects, and not focus solely on “elephant hunting.”
4. Make it easy to use. In order for this method of selling to be effective, products need to be highly intuitive with little to no training required to get value. Less is often more with regards to a clean user interface, and integration requirements should be minimized, at least to get started.
5. Track usage. Since most offerings are delivered via SaaS these days, it is easy to track usage in a very granular way. Beyond making sure that your customers are using your product (mandatory for a subscription-oriented pricing model), you want to understand how they are using it and where it can be improved or augmented. You may even learn of new potential use cases. Careful tracking of usage should also lead to better customer service—critical to make sure those renewal and expansion numbers are strong.
Let’s be clear—many of the same tenets of how a small and emerging company should go-to-market remain the same: stay focused, know your target customer, listen carefully when they speak, and provide exceptional customer service. But the methods by which these same companies initiate interactions with their customers have changed. If you are still using the old sales playbook, it may well be time to go back to training camp.
[On October 30, Matt will lead a panel of experienced technology sellers and buyers at the fall B2B IT Forum at the Microsoft NERD Center, where the discussion topic will be “Cracking the Code on Enterprise Selling.”]