Software Enterprise Sales – Tips for Successful Preparation
One cornerstone of a marketing strategy is defining the target customers. Determining the target customers affects the characteristics of the sales process and therefore also the preparation for Enterprise sales.
Does only the size of the customer determine the nature of the sale?
Defining general sales as B2B, namely sales to other businesses and organizations, is usually too broad and not focused enough. There are a number of parameters that can be used to define the targeted customers, which help us to be more accurate with the marketing process and sales characteristics. Customer size may be one of them.
When talking about customer size in B2B, it is common to make a rough division between Enterprise clients and SMB clients.
According to “Gartner” research company, SMB customers (Small and Midsize Business) are determined according to two main parameters: number of employees and annual sales turn over. According to them, small businesses are defined by up to 100 employees while medium businesses are between 100 and 999 employees. In terms of turn over, small businesses generate up to $50 million annual sales turnover, while medium businesses between $50 million and $1 billion. Accordingly, Enterprise customers have at least 1,000 employees and an annual sales turnover in excess of $1 billion.
However, these definitions are not always valid. In the Israeli market, for example, the threshold for enterprise customers is lower, whether in number of employees or in annual income. There are also cases where the sales process for small and medium-sized organizations may take years, while there are huge organizations whose transaction amounts to only tens of thousands of dollars and the sales process takes several months.
Therefore, the absolute size of the customer is less important and is not the only thing that determines the nature of the sale and the required approach in enterprise software sales in international markets.
What are the characteristics of typical Enterprise sales?
Enterprise sales are usually related to the level of complexity and mindset of the sales process. To characterize this, it will be easier to specify the traits of sales to SMB companies.
SMB sales are usually based on the principle of developing an out-of-the-shelf product that solves a given problem in a market with a large number of customers, finding those customers and bringing the product to them. These are usually short sales cycles, aimed specifically at the transaction itself. The principle that these sales are based on is the number of customers and optimization of the process, so that the cost of acquiring customers does not exceed the profits, since the volume of each transaction is relatively lower than that of Enterprise customers. This is one of the reasons why inbound marketing, which drives traffic to a website through various digital means (content, SEO, social media and more) – is critical both in terms of the number of customers exposed to the solution and in terms of the customer acquisition cost. It typically requires working with a single decision maker in the customer’s organization and the deal depends on whether or not he or she sees value in the product.
Enterprise sales are the opposite. They are more focused on tailoring a customized solution to specific customers and their requirements. This principle is valid even if the product is referred to as a ” out-of-the-shelf product” but in practice requires and allows for many adjustments, customizations and a complex and lengthy implementation.
What are the key features of Enterprise Sales?
– A close and complex level of interaction with the customer until reaching a tailored solution.
-Every step in the decision involves more people and stake holders whose approval or consent is required. 6.8 people on average.
– Involvement of your development and product teams in tailoring the solution – which means more people will be involved on your side.
– Transaction amounts – can range from $ 60,000 (usually for pilots) to an average of $5 million and sometimes even to tens of millions of dollars.
– The sales cycles are very long – between six to eighteen months on average.
– The perceived risk on the part of the customer is great – whether in choosing the wrong supplier, certainly when it comes to an unknown supplier who resides in another country, or a product whose implementaion might fail.
-Natural inclination to request broad solutions as decision makers do not want to deal with endless suppliers and solutions
-Many requirements for integration with other third-party systems in the organization.
– As far as lead generation is concerned, less dependency on Inbound marketing relative to Outbound. This is because the number of target customers is smaller and allows direct contact of the sales team to customers who have been identified in advance.
Why is it so challenging for startups to sell to enterprise customers in international markets?
There are a number of reasons. We will focus on the main ones:
– Enterprise customers like to purchase complete and comprehensive solutions while a young startup has not necessarily developed a product that exceeds a certain functional area.
-The extensive integration requirements of the customer, discourage the startups, who prefer to focus on their solution and do not yet have business partner integrators to do this kind of work
– These customers are risk averse and prefer to buy from a large or established local company, unless the startup product has a unique competitive advantage
– Startups don’t like the “one-size-does-NOT-fit-all” approach and tend to avoid tailoring a solution to specific customer requirements.
-Because the process is very long, startups don’t always have enough resources (including development resources) or time to wait for the end of the process.
What are the steps and investment required for a sales process for Enterprise customers?
– Building a limited customer list, with best product fit. This way we will spend time and resources only on qualified customers. This is also why the dependency on Inbound marketing, will be smaller, as we define in advance who we want to target and do so in a proactive and focused manner.
– The need for a deep understanding of the potential customers’ world: what is happening in their companies and respective industries, including acquisitions, mergers, various announcements, changes, new activities and more – and how these all affect the company’s markets and their challenges. If we do not know the customer world in depth, it would be difficult to establish a long-term relationship, gain customer trust and stand out from the competition.
– Mapping the organization and the relevant roles that will be involved in the process – whether those who decide or those who influence. For example, in one of the stages of an enterprise deal, which we were involved in, in preparation for a customer conference, in which the client in question was also attending, we pre-assigned each of our company members and made a decision as to next to which decision maker he will sit during lunch. We did not leave it to pure coincidence.
-Contact with relevant people on the client side to stimulate interest, develop relationships and engagement.
– Adapting a consultancy approach as opposed to a sales approach. It should be understood that, as far as the Enterprise customer is concerned, the purchase of the product is perceived as of high risk and therefore the trust of the decision makers must be acquired. It’s worth noting that they are constantly inundated with numerous offers to purchase different products, and even if these are not your direct competitors, they are competing with you for the customers’ budget and attention. That is why you need professionalism in your field and the ability to develop a long-term relationship, among other things by taking a consultancy approach and looking to help the client solve problems.
-To reduce risk, you may need a pilot or POC (Proof of Concept). Still, moving from pilot to the large final deal itself can take a long time – sometimes years. Keep in mind though that a customer of this type can provide follow-on orders and purchase your additional products, modules or services on a large scale and over time.
-If you have a Customer Success team, be careful not to automatically adopt preset message templates that may be suitable for a mass of smaller customers. An enterprise customer needs a personal approach that reflects a real person and automation of personalization may not work that well. For example, contacting them only when the subscription ends or basing your communication only on automated emails are unlikely to do the job.
– Recruit salespeople with experience in enterprise sales
– Make sure that your team is prepared to tailor the product to each customer and that the product architecture allows it to be customized to several different customers at the same time.
– Resources to support the client when implementing the product and providing support.