How Enterprise Sales will Change
Selling into an enterprise in the best of times requires patience due to the complexity of the sales process. In most established enterprises, there are silos between internal groups, and they can be extreme. The people that understand the benefit of your product, those that are in charge of implementation and those that control the purse strings are all different. On average, an enterprise sale requires buy-in from 3 or 4 groups. You will need buy-in from 2/3 to bring the 4th person along. Until they are all aligned, it is almost impossible to get a contract signed. In this environment, companies should expect 8 weeks or longer just to get a contract signed.
The challenges of selling to large enterprises have been intensified by COVID-19. In the current market environment, it is simply unsustainable for new startups to solely rely on large enterprises for revenue. As such, startups need to innovate across their sales processes, starting with the pre-sales process. Companies that have strong inside sales teams will have an advantage. Companies need to find a way to enable remote product experimentation without putting enterprises at risk or requiring full deployment. Creating environments for mock interactions, remote POCs and self-service product exploration will become paramount. Enabling such flexibility and remote capabilities in the pre-sales process dovetails with changing needs in the integration process. Even after winning the deal, startups need to deploy remotely and painlessly, even for larger, client specific integrations.
Product pricing innovation is also a must in the new world of enterprise sales. Startups need to rethink traditional pricing strategies, incorporating greater flexibility and ingenuity. We suggest white boarding a variety of potential scenarios — different possibilities and the relevant response. Every aspect of the product becomes a feature taxonomy. Pricing should have different tiers and be clear and consistent but flexible — easily mixed and matched to meet a prospective customer’s needs and comfort level. Enterprises adopt software from startups when they have a real pain point or bottleneck — this is the focus of the pricing negotiation, so understand the pain point thoroughly. Customers generally will focus solely on achieving their target margin and won’t have as much focus on other aspects of the taxonomy, therefore showing more flexibility on pricing. Another way to view this aspect of the negotiation could be termed as other “billable events”. Companies should make a list of these “other billable events” and focus on adding premium pricing based on such events into every deal. With customers laser focused on narrow objectives during the sales process, these premium events will create room for more seamless upselling in the future, paying off in the long term.
Put simply, we are in unique times and creativity is required across the spectrum.
Written by: Melissa C. Guzy, Managing Partner of Arbor Ventures
