By Vincent Letteri Aug 16, 2018
Many tech entrepreneurs steadfastly search for the key to successful sales execution with large, multinational corporations. Even for growth-stage companies, the sales processes and product set that got them through the early stages might not be enough to succeed consistently with the largest customers. The reality is that this is the hardest segment of customer to sell to.
KKR has a roster of 100-plus portfolio companies that spend an aggregate of $7 billion a year on information technology. They are all looking for an edge - in every facet of their business. Here are the hurdles vendors need to overcome when trying to sell to large companies:
- Pricing: This is one of the biggest challenges younger companies will encounter. Some enterprises are not particularly price sensitive but others know they have leverage and will use it. Bringing rigor and sophistication to pricing can make all the difference to a business’ fate.
- Rigorous security checks: Multinational corporations don’t adopt and deploy minimum viable products from startups. Software products need to be able to meet stringent security and regulatory requirements.
- Long sales cycles: A lot can change in six to 18 months but that’s how long it will likely take to get a deal done. Many multinational corporations have defined purchase processes with set goals and timelines that greatly influence sales cycles. If your sale requires buy-in from multiple function areas, timelines can extend even further.
- Uncertain sales closings: There will be months when winning a single deal or even two deals is a huge month. The periods in between those wins can be difficult throughout the organization, especially on the executive and sales teams. Forecasting the timing of enterprise sales is an imperfect science at best.
- Complex sales processes: Enterprise sales are high touch, typically require on-site work, and significant customization. These engagements benefit from a team approach, with veteran leadership on the sales side.
- Multi-market, multi-language functionality: Enterprises want vendors to support all of their operations, or at the least show a credible roadmap to get there. Building support for international markets and multiple languages requires additional resources, and brings its own challenges around regulations, data security and infrastructure.
- Highly regulated: Internal security testing within large enterprises, especially if they are within regulated industries such as financial services or healthcare, can take years to pass.
Nonetheless, the benefits to overcoming these challenges are worth it. Done successfully, a single large customer brings substantial revenue (often recurring), the credibility and references that pave the way to go out and sell to others, and product insights that can likely be applied to other customers.
So, what is the best way to get it right the first time when selling to enterprises?
- Don’t be afraid to ask for a large number: It’s a bigger mistake to underprice than it is to overprice.
- You’re being evaluated for more than just your product. Enterprise buyers want to know your company will be around for the long term so you’ll need to demonstrate financial stability and the backing of credible investors.
- Get experience on your side: Talk to fellow CEOs and investors for advice. Many have done what you’re trying to do right now and can help you with planning, selling, expectations and making introductions.
- Get the right sales team in place: Enterprise sales are complex and long processes and you’ll be better off with sales leadership and sales representatives who have been there before.
- Know who you’re talking to (and what they want): A recent trend of tech spend moving away from the CIO/CTO and toward functional heads, such as the head of sales or CMO, provides a wider array of possible buyers but also a wider array of concerns to address.
Once you get to the point of engaging enterprise customers, you’ll then have the added challenge of keeping the business. That’s a post for another time.
This article originally appeared on CIO.com.