> As my father always counselled me with regards to dating advice: "Don't come up with reasons for them being out of your league. Make them come up with them. Someday, someone -- perhaps someone surprising -- will say Yes."
More to the point, we're not afraid of BFEs because they may be "out of our league" and say no; if they said no right away we'd be fine.
We're afraid of BFEs because we fear they will absorb all of our time in endless email conversations, nitpicking, forms-filling, PDF-generating, phone calls, meetings, and eventually say no -- or even if this results in a sale it may not be worth it.
I'm not saying this is true -- I'm just trying to describe the fear. The OP clearly addresses most of those points by the way.
In my experience working with clients of various sizes, it is generally not the largest that are particularly painful but the smallest. The largest have staff trained and dedicated to their positions. The sole/small operators are juggling everything and most struggle to do many things well (often I'm one of those struggling).
These are the clients who, when you ask them for written content for their website, give you a scan of their competitor's brochure with the name crossed out and replaced with that of their own business. (This actually happened to an officemate of mine today.)
FWIW, I think the fear of selling to large companies is of embarrassing ourselves in comparison to larger and more experienced operations who have an SLA template, dedicated tender writers, etc.
The funny thing is, the larger the company is, the less likely anyone there will remember anything you (as "some supplier") does or says--unless you're the one who wins the sale.
With the super-Enterprisey corps, you can even fail horribly to sell one branch/office/department, then turn around and strike a huge deal with some other branch/office/department of the same company.
The biggest fear of selling to BFEs (too many multiple use acronyms here)... is actually just getting our foot in the door.
We hired a dedicated sales person recently and his ability to close far surpasses ours... really it's just a matter of him digging in and getting to the right person (basically what this article says).
The UK Government is doing a lot of work to get around these problems. Firstly all new development is preferred to be open source (1), secondly they have created at least two programs where suppliers are pre-vetted and then can offer their products (and services) in an online catalog. (2). I failed to know about either of these in time but there are 700+ SMEs on there.
I am not saying that this is all solved - but a large chunk of the process patio11 described is explicitly "blipped over" for new services into central UK Government.
There are some rays of hope - I will let you know !
(OMG - GCloud 4 is open - if you are a UK software company then I urge you to join if you can.)
Thanks! I just registered in both and it is a very simple process(though I am still waiting on approval). There are quite a few software contracts in there.
Well it's simple for now - have not waxed through the 16 docs they provide for G-Cloud (and the Agile consultancy has already finished - yes a preferred supplier list for agile development)
Not sure if you will catch this but loved your raspberry ok adventures. Always interested in meeting fellow Brits in this strange industry - could not find your email easily, hence the comment
patio11: I was driving to work a few weeks ago, and heard a 'public service reminder' on the military radio station that broadcasts from the base in Vicenza: "try and remember appointments because missed appointments cost the army N zillion dollars a year" or something like that. There's the ultimate enterprise customer for you to land!
Also, I had a look at AR's home page, and was surprised by how much text there is. I have to assume that you've tested that and it works.
I don't think there's so much text there. It's not nearly as much as a long-form sales page.
A general school of thought is that light landing pages work better for getting a simple commitment like an email address, while longer pages with lots of sales copy are better for getting e.g. credit card orders (look at how long an Amazon page is).
This seems like a hybrid model, where the main focus is getting you to do the demo, but the sales copy is there (for Google and customers). IIRC Patrick recently redesigned this page; I believe he wrote about it in a recent email.
I totally am totally used to think like a human (ref : Twenty times as much, you ask? No, transitioning from "pocket lint" to pennies. Stop thinking like a human.)
That said, do you think of your large corporation customers reading this article? I'd be afraid that they would think like human and may feel ripped off, even though they made the right choice when comparing with the other options.
I work for an organization that has been paying over $100 for a 4Gb flash drive with our logo on it for years. It takes a lot for an enterprise to feel ripped off.
As a large corporation customer (not of Appointment Reminder, but of other software), no I don't feel ripped off. I had the "pleasure" of being the peon who brought in some software in the last year. Purchasing and legal departments both were heavily involved. The entire process took many months and hours on both sides to complete. It's a completely different world.
I didn't see this in there but support and maintenance is a great recurring spend. For enterprise software this can be 20% of the purchase price, if you give a discount on the software (this can give the purchasing folks a win to take to their boss) you can often get the S&M at full undiscounted price. Get enough of these deals and making payroll every month gets a lot easier.
Put an extra line item in the quote for maintenance. Done.
Seriously, not only does that work, there are companies which will send the quote back and ask you to requote them with a maintenance contract if you don't do it the first time.
(And yep, 20% is indeed quite standard at many places.)
"Remember that time we bought the thing? And we had that bug? And they said 'We'll never fix that because the product is EOL'? That should never ever happen again, and is worth 20% per year to insure against."
AR quotes maintenance purely as "We promise this product will be under active development for the duration of your maintenance contract. We might decide to do that independently of this contract, but if you want a legally enforceable promise which you can quote to other stakeholders, that costs $PRICE."
To be fair, even if it never gets used, it's a hedge against the risk of relying on a third party.
My last project was heavily reliant on a particular feature in a game development framework. We were more than 1 million into development when they announced they were discontinuing the feature. We had a service contract, but not a maintenance contract. They basically told us at that time that all those bugs we had filed over the last 6 months? Here's the code, fix them yourself. We pivoted as hard as we could, but it was too late and we had spent too much money. The end result is my company canceled the project and laid off my entire studio.
This is all fine and good until your internal user needs to involve the IT department to open the firewall to your SaaS service. You'd be amazed by how many Fortune 500 companies block things like Evernote and DropBox, Google Docs, etc...
At which point, the purchasees will be going through some official channels to get at your service...
An important thing to consider when selling to BFE's is not just that their budgets are larger, but the value they will receive from your offering is bigger, too. I see a lot of SaaS founders get embarrassed about charging enterprise rates, when, as Patrick says, the rates don't even really matter at that scale. Yet while they may be able to charge 20x as much as their regular plans, they may be delivering 50x the value. Make sure you have a good understanding of how your application will provide value, and how they will measure that, not only to support your sales efforts with the customer, but so that you feel confident about your side of the sale, including the price.
Some pointers from someone that deals with large and small organizations.
- Expect to be audited both security wise and financially.
- The larger the organization, the longer the process. (Although smaller clients can be just as dysfunctional.)
- Track everything; email, phone call, meeting, etc. It will save your ass in a dispute and may provide valuable metrics.
- The customer isn't always right, but they still are the customer.
- You will have to fire customers or crank prices up so the pain isn't so bad.
It is more than just that. Log files only give you a list of individual transactions that happened. Auditing capabilities (as I understand them) imply the ability to trace a sequence of interrelated transactions in order to determine whether business procedures and rules were properly followed or even determine flaws in the procedures and rules themselves. For example, if a customer complains that a physical product is defective, and you detect that a specific component is at fault, you could trace which supplier sold you that component, when it was bought, where it was stored, etc., in order to determine the root cause of the component being defective: Was a business procedure not properly followed? Is there a flaw in the purchasing/storage/manufacturing/whatever process that results in products being defective?
That sounds way more comprehensive than most "auditing" I've seen in software. Usually it's timestamped activity logs with a couple of reports and maybe some filtering. Very basic.
Well, then software salesmen are taking advantage of the ignorance of their customers.
Of course, "auditing" as I described it is not just a button to be clicked on a GUI - it requires the user to know what stuff he is auditing in first place.
"One of the most common objections I hear from folks thinking about moving upmarket into the enterprise is that they're not cut out to be Sales Guys. Guys, believe me, I used to play World of Warcraft and still often stare at my own shoes while talking. Nobody is less qualified to be a Sales Guy than me."
> "On the other hand, when you send us an email, you may have to wait a few hours, but you'll get your response from me, every single time, and I will do my best to fix your problem. I built this product from the ground up and I am fanatical about taking care of you because you'd be my biggest customer, and if I don't take care of you, the business is over."
Honestly, I don't know about this. This might work if you have a super-duper revolutionary product that nobody in the industry has, or you have some insane reputation(college/work whatever).
Disclaimer: I've not done buying/selling at enterprise levels - just watched a few others do it.
Having just had to get a hard drive replaced on a server under an "enterprise" warranty agreement, spending 30 minutes on the phone with a heavily accented robot who insisted on being sent zip files containing the output of the array diagnostics utility, to confirm that the drive had failed (yeah, why do you think I'm calling?) I would much rather have sent an email, even if it took a few hours.
I hadn't heard the concept of "suggested CCing to the internal team" before. How do you phrase this? Are you asking them to forward your email on, or to CC others on their reply to you?
"Please feel free to CC your technical team so we can make sure we're all on the same page regarding [technical requirements X, Y, and Z]."
Or something to that effect.
If the purchasing agent is feeling over-their-head technically, they might jump at the chance to involve someone who actually understands the requirements.
Disclaimer: I don't do SaaS, but I've been involved in a few enterprise sales in the capacity of "sales engineer".
You can crush arbitrarily large/sophisticated competition on small deals that are uneconomical for them to pursue with the goal of expanding into the core of the business. Clayton Christensen calls this "disruptive innovation." I personally like to think of the old line about how to eat an elephant: in small bites, starting at its vulnerable underbelly.
That's good stuff. Worth the price of admission, by itself - and something I'll be filing away in my "bag of useful ideas and thoughts".
Great article and excellent advice as always Patrick. Accurate all the way down to their accounts department not caring at all about your invoicing terms.
I routinely spend money on behalf of my employer, on software and software services. Here are some reactions, which I hope are helpful to folks trying to sell to enterprises.
1) If you want to sell to enterprises, build your product for enterprises.
This means that you must be able to document systems and processes that lead to high reliability and security. Every aspect of the product must be managable by more than one person, in case someone goes on vacation or is fired (prominent enterprise services that fail this: Twitter and YouTube). You must be able to distinguish between "users", who just use the product to do their job, and "administrators", who manage the product for the enterprise. (Don't send "upgrade now" emails to users!) You must support--or be able to support--browser and OS versions that are a few steps behind what consumers are using. If it's client software, you must work on Windows. Etc.
2) Put your answers in email. Don't bother with attachments unless it's to print or sign.
I can't tell you how many emails I get from salesfolks with Word documents or PDFs attached to answer my questions. Just answer my questions, please, and do it in the body of the email so I can easily read and forward. Your product sheet might have the answer, but I don't want to dig for it. The sales process can be a competitive advantage, but only if you actually act like you're a person I'm conversing with, not a brochure-forwarding bot.
3) Don't jerk me around on pricing.
If you publish a low-dollar tier or tiers on your site, let me take one of those levels even if I'm a big enterprise. Here I disagree with Patrick--enterprises ARE cost conscious. Managers are charged with buying what they need. If it MUST be expensive, that might be ok. What's not ok is spending a penny more than necessary. If I see a 50-foozle price on your website of $500/month, and you tell me I need to pay $5,000/month for 50 foozles just because I'm enterprise--see ya. Just because big businesses are rich, it does not make them saps.
4) "No" is rarely permanent.
If I tell a telemarketer at my home not to call me back, and they call me back, I am pissed. But if I tell an enterprise salesperson I'm not interested right now, or I only want the low website-advertised price, it's ok to call me back later to see if I changed my mind. There are a lot of brains in a big enterprise, which means mindsets and needs can actually change pretty fast. That said--respect a timeline you're given. If I say don't bother calling for 6 months, then don't call me next month (5 would probably be fine though). Be attentive but not pushy.
5) Don't try to go around me
If I tell you I'm the person you should be talking to, that still means that I will need to get clearance to spend. Don't try to find the "decision maker" above me. I'm not lying to you--I am the person who is responsible for managing the sales process for the actual decision maker, because the decision maker just wants to make decisions, not read 2,000 word emails from 5 different prospects. I know the decision maker better than you do. Going around me is just going to make me tell them that you are an unreliable loose cannon, and they will believe me, not you.
6) I have assymmetric expectations about communications; unfair, but that's life.
If you send me an email, it might be a week before you hear back. Feel free to politely follow up. I probably feel a little guilty about it, but sales guys are easily pushed down the priority list. But--if I send you an email, I expect an answer very fast. Meeting that expectation can be a competitive advantage. As Patrick says, a perception of responsiveness can beat a perception of size. I have often picked smaller companies over big ones because they answered every email and phone call right away.
ya. but in reality adobe also doing like this now. more on passive income. But i do financial software and thinking open to SAAS mode.Some investor potential high cost and some are not.Building financial saas are complex but it's much easier in long term like me. don't have to go client place everyday.
Second hand re-hashing of other people's experience is the best.
Seriously though, Patrick, you take an isolated episode and then extrapolate it into an assertive definitive business "theory". This is the good old armchair athletics. You appear to routinely do this and I personally find it seriously off-putting.
I think it's worth remembering that this is one guy who started with his bingo cards, was pinching himself through the small-scale success of that as a side-earner, spoke honestly of it on HN to an audience appreciative of anyone sharing figures and experiences so openly regardless of their scale. Consider too how many here would be keen for any earning side project at all.
From the cultish following that developed (in the absence of many alternatives), he picked up some consulting work and commenced further pinching and explaining of his efforts.
Then, from that consulting to more self-pinching following some success with winning enterprise clients. And again, sharing what he personally learnt.
Yes, the jump from "guys, consulting is awesome!" to "no wait, consulting has its issues, wait until I tell you about enterprise sales!" was bemusing to me, but it's a discovery anyone following along saw happen to a real-world person. Some of the writing style (NDA, etc) can be dorky/annoying, but if you remember that this is a kid in a candy shop documenting the wonders of their personal experience, maybe that will help you appreciate it.
This isn't his business theory but a series of relatable experiences enough people value to upvote any time he shares more.
Often the best people to learn something from are not the people with decades of experience, they are the people who have only recently learned the thing themselves. They tend to have a much better feeling for the ideas which newcomers may not understand at all but are so obvious to experts that they wouldn't even think to mention them.
I've been learning about sales over the past six months and I've found that the best teachers are people who used to be engineers (like myself) but now do sales. They understand how my brain works.
Patrick's advice in this article may not have been "new", but I found it fantastically useful.
> This is the good old armchair athletics. You appear to routinely do this and I personally find it seriously off-putting.
As someone who learned Enterprise sales in the last 3 years, his advice is spot on. Why not contribute to the discussion and refute his claims? You make it sound as if you know something (i.e. something that's putting you off) that he didn't articulate.
So if you were the CEO of "Appointment Reminder", your first plan of action after getting a request for information from a hospital would be to plan your takeover of the healthcare industry?
I don't want to say anything against Patrick or other consultancy oriented entrepreneurs, but I'd just put up a price on the saas app and be done with it and move on with the next thing. I'm functionality-oriented, create a lot of functions that automate work and let the product sell itself.
It might be a little foolish and leaving money on the table but I just think more and more code is better than more and more marketing. Software should eat the world, and as fast as possible.
but I just think more and more code is better than more and more marketing
Ideally you want code AND marketing, and - better yet - you want them working in concert with each other. Marketing isn't something evil, ya know... it's the means to finding out what customers want, and then letting them know that you've built a thing that they will want, so you can sell it to them (or so they can buy it, if you like that terminology better).
Quality marketing is a lot more than just shady web-advertising tricks (pop-ups, pop-unders, interstitials, link-spam, content farms, etc.), annoying TV ads, cheesy radio spots, spam emails, etc. Those are all just tactics which a given firm may choose to use or not use.
Isn't this a line from "Shit My Dad Says"? https://twitter.com/shitmydadsays/status/4811790555
Maybe all fathers say the same thing.
More to the point, we're not afraid of BFEs because they may be "out of our league" and say no; if they said no right away we'd be fine.
We're afraid of BFEs because we fear they will absorb all of our time in endless email conversations, nitpicking, forms-filling, PDF-generating, phone calls, meetings, and eventually say no -- or even if this results in a sale it may not be worth it.
I'm not saying this is true -- I'm just trying to describe the fear. The OP clearly addresses most of those points by the way.