At the beginning of your company’s life, it’s likely that you’ll focus on transactional sales. If you’re selling B2B, these clients are generally SMEs with a buying cycle of 60 days or less. Small deals can be brokered off the back of connecting with the prospect a handful of times via phone or email.
Of course not all software is designed to serve enterprise organizations. But if your product has seen success and has the potential to meet enterprise needs, then it’s time to think about enterprise sales.
Here are some of the lessons I’ve learned in moving from transactional sales to an enterprise sales model.
What makes enterprise sales different from transactional sales?
An enterprise sales cycle is much longer. It can be a journey of eight months to a year, in which you will be consulting with multiple decision-makers within a large corporation.
When you’re on an eight-month journey with a buyer, talking with multiple stakeholders and going through security reviews, the process is much more involved than when someone gives you credit card info after two weeks. One of our clients put us through eight stages, lasting almost an entire year. I like to think of enterprise sales almost like a video game. Once you pass one level, you move onto the next.
While such a long lead time is expensive for a small business, these are very high-value accounts. There is considerable upside for all of the resources you’re expending.
And that upside is long-term: enterprise buyers churn at a much lower rate than transactional buyers. That’s because the buyer invests significantly more time and resources into the buying process in an enterprise sale versus a regular sale. They’re not going to drop you after 2 months following an 8-month sales cycle.
When should I transition from transactional sales to enterprise sales?
Because an enterprise sale costs much more than a transactional one, it is unwise to make the transition until you have a consistent flow of business. In a SaaS context, this means having a steady base of subscribers from month to month. This is a simple matter of ensuring your business has sufficient cash flow to scale.
If your subscriber base is inconsistent, you’re probably churning a lot of business. High churn is a sign that you’re not yet stable enough to pursue enterprise buyers. It would make more business sense to focus on client retention before you invest resources in scaling.
Enterprise buyers are extremely risk-averse
Once you’re ready to move into enterprise sales, the first thing you need to know is that enterprise buyers are much more risk-averse than what you’ll be used to.
No enterprise buyer wants to select bad software for their company that might end up reducing revenue.
Buyers will combat this risk by bringing in as many people as they can to help make the purchasing decision. The risk is spread out over multiple people. In fact, enterprise buyers are so risk-averse that sometimes the company will even bring in third parties to perform security testing and other evaluations needed as part of their requirements.
Another way enterprise buyers deal with risk is by consuming your content for months before they are even ready to start a sales conversation. As such, we’ve found that inbound marketing is really important for an enterprise sales process.
The enterprise sales process requires a relationship-oriented salesperson
Long lead times and risk-averse buyers require a particular type of salesperson. A rep who is great at moving deals forward quickly to hit weekly targets might be great at transactional sales, but not have the patience nor the executive presence necessary for a longer sales cycle.
Enterprise sales is about building the kind of trust you need for a more involved business relationship. And this trust takes time to create. It’s less about closing quickly and more about consulting with your prospect across all the different departments in their business involved in the sales process.
Consider less experienced candidates with a consulting mindset
Agile, flexible, transactional salespeople on your team might be a good fit, but I’ve also had success bringing in people with a consulting background, or sales engineers who understand the technical side of SaaS implementation. Whoever you choose as your first few reps, account for a lot of training time and bring in a mentor if at all possible.
To save you time training staff, you may be tempted to hire a veteran sales representative with an impressive resume and a history of success at a major software company like Oracle. However, in the early days, such hires are likely to expect financial compensation that goes beyond the scope of your budget. Think $350-500k total OTE.
Once you’ve found and trained the right enterprise reps, start them off by finding low-hanging fruit. Such as an existing customer who could become an enterprise buyer. This will help them gain experience.
Additionally, you can start them on separate lines of business within an enterprise organization. Have them close multiple lines of business until there is enough noise to get the ear of the C-suite for an enterprise wide contract. This works especially well when an MSA (master service agreement) is in place when you close the first line of business.
The qualification process for enterprise sales
A mentor of mine once told me, “the qualification process is the most important part of enterprise sales”. If you don’t qualify prospects well at the outset. Then you can end up investing months into an expensive process before learning that the prospect isn’t a good fit or isn’t ready to buy. Unlike transactional sales, the question isn’t whether an enterprise would be a good customer and can afford your product. It’s whether they need you right now.
To qualify your prospect in an enterprise sales context, your job is to find out what area in the company has the greatest need for your product. To do this at SaleMove, we reach out to every department. For example, if we are selling to a bank, we might talk to retail banking, advisory, lending, insurance, and any other lines of business. In each individual conversation, get your reps to figure out whether there is a specific need for your product for a current project to be considered for.
Each enterprise department has a different set of needs
When talking to different people across the corporation, keep in mind that departments will have different pain points. For marketing, the problem might be a lack of leads. For sales it could be that the time to lead is too long. Tailor your message to each department accordingly.
We also look at social media to qualify our buyers, particularly LinkedIn Sales Navigator and Twitter feeds. Look at the company’s press releases and find current strategic initiatives where your product could add value. Strategic initiatives trump tactical ones. So if you can align with an enterprise organization’s strategy it’s a good signs they could be ready to buy.
Moving into enterprise sales is risky, but the potential rewards are huge. If you’re ready to make the transition, these guidelines can help take your team to your next level revenue goals. By setting the right expectations combined with careful planning, you’ll be laying the foundation for a successful enterprise sales process.