

Bending over: How to sell to large companies - jonpaul
http://blog.asmartbear.com/selling-to-large-companies.html

======
ErrantX
We sell this kind of software... it's both a pain and a dream in one go.
(note: while we are an actual company the software side of things is very
"indie" so a lot of this stuff applies)

It's a pain because managers can be really awkward sometimes if their ass
appears to be in any way on the line - one piece of software we offer manages
the auditing of classified material and, for obvious reasons, selling it has
been _hard_ (even though pretty much every company is just using a NAS with
the files on it....)

It's a dream because apart from the odd manager you can predict exactly how
everyone at the company will react (from legal through to tech). After about
10 sales you will be able to pitch it in a way that leaves them with no
questions :D

Regarding this article...

 _Please read this 100 page document about our invoicing process._

We've actually had success just saying "I'm sorry this will incur an extra
admin cost of X, if you like this is how we generally invoice...". All these
companies like to think they have a highly efficient invoice process compared
to everyone else - but the truth is that pretty much every company has the
same basic ideas :) (note: YMMV - we sell to specific/specialized companies in
the same fields who all tend to be quite similar anyway)

 _"We will release the funds after you provide your US social security
number."_

This has proven a problem for us in the past - some of the companies (about
30% of our sales are in the US) genuinely don't believe anyone in the UK is
able to write/sell software on an enterprise level :P You'd also be surprised
how many times we get asked to come out and do a demo of the software - and
they can't understand that is a non-trivial trip :)

 _"We only pay using Bankers' Scrolls made from papyrus"_

This is absolutely the biggest ball ache. Especially because they want US bank
details... Paypal is, in my opinion, a complete no-go anyway once you are over
about $1000 (and possibly a lot less). We've set up a merchant account and
threw up a really simple payment gateway for clients. This has proven pretty
popular and has yet to be refused; in fact I think once a company becomes
aware that we "handle our own payments" they are willing to work with it.
Credit Cards have proven to be perfectly acceptable even for the biggest
companies.

 _"If someone sues us over your product, you have to pay our legal costs."_

Just outright refuse this if you can. Mostly because there is wide possibility
for them to try and screw you with it if they make a mistake. If they insist I
always make sure it explicitly deals with what circumstances can be considered
"our fault" (i.e. bugs etc. rather than misconfiguration).

Most companies seem reasonably happy if you offer them free "on-site"
technical support in the case that they run into difficulties which might lead
to legal issues (usually through a claim-back of tech support costs after the
fact).

(as always - your experience may differ, all companies are different)

~~~
Natsu
One trick the article _didn't_ mention is that you can often get your payment
a little faster by offering a small discount for early payment. They don't
have to know that you price it in by adding a penalty fee for anyone who waits
until the last second to pay you.

------
po
When you say bending over… is that bending over backwards or forwards?

One important point with selling to large companies is to understand their
price points. At some price, lets say $1000, a middle manager will have to go
through several layers of purchasing approvals. Below that price, and they can
make and act on the decision without approval.

Once you've gone over that price, you should go waaay over it to make it
worthwhile. This is one of the reasons why you see so many corporate products
that throw in the kitchen sink. They've gone over the purchasing approval
limit and having a lot of features helps drive the price up, which in turn
helps support the steak-dinner sales cycle.

------
jgrahamc
One of the hardest things I ever did was walk away from an over $300k
licensing deal with a major corporation. I was selling them my polymail email
classifier to improve their anti-spam product. They had already done all the
work and proved that it was way better than their existing anti-spam component
for their personal security suite.

But they were unwilling to pay a reasonable price and I wasn't willing to be
screwed.

Their product's anti-spam still sucks.

~~~
proee
and you're still short $300k. Even if they low-balled you it might have been
to your advantage to license it to them for a year and then put your foot
down.

~~~
teaspoon
If it's "one if the hardest things" he ever did, I'm guessing that option
occurred to him.

~~~
jgrahamc
It did occur to me, but given how badly they treated me through the entire
process I decided that $300k wasn't worth the hassle of dealing with them.

~~~
kwyjibo
You could have hired somebody else to handle the hassle dealing with them.

------
tonystubblebine
One thing I've learned about their slow payment system is that you should
follow up immediately when the payment becomes overdue. That's often the first
time they'll tell you that you haven't followed their procurement protocol.

------
kylemathews
Is their an open-source EULA available? Paying even $1000 right now for a
lawyer is untenable.

~~~
samdk
The Wordpress.com/Automattic Terms of Service (<http://en.wordpress.com/tos/>)
and Privacy Policy (<http://automattic.com/privacy/>) are available under a
Creative Commons ShareAlike license.

~~~
dctoedt
Good intentions on Wordpress's part, but it might be seriously problematic in
view of intervening case-law developments. I did a write-up at
[http://www.ontechnologylaw.com/2010/05/using-wordpress-
coms-...](http://www.ontechnologylaw.com/2010/05/using-wordpress-coms-terms-
of-service-for-your-own-web-site-might-strip-away-much-of-your-legal-
protection/).

------
tocomment
How does an umbrella insurance help with liability? Where can I learn more
about this?

------
dpapathanasiou
This is a good guide for once you have an agreement, but I wish it dealt more
with how to get started with a big company as a client, especially when you're
a bootstrapped startup.

~~~
rstocker99
I found Selling to Big Companies ([http://www.amazon.com/Selling-Big-
Companies-Jill-Konrath/dp/...](http://www.amazon.com/Selling-Big-Companies-
Jill-Konrath/dp/1419515624)) helpful.

A referral is very helpful. That's not always easy but it's worth racking your
brain to try and find a connection.

It's also worth aiming as high in the organization as possible. In large
companies most people don't have the authority to purchase anything of
significance.

It's not just an issue of money. If buying your product changes the way they
do business in any meaningful way then some authority will be required to
approve those changes. Does the person you're talking to have that authority?

It's much easier to start high and then have that person push you down to
someone lower in the org to do the leg work than to find out after months of
effort that the person doesn't have the authority to consummate the purchase.
If VP X tells manager Y to look into something at least you know VP X thinks
it's worth the time.

This implies that you need to craft your value proposition and benefits in a
way that is appealing to someone further up the food chain.

------
Jun8
The editor states

"Most small companies start by copying a EULA from a similar company, possibly
even a competitor. That's a copyright violation, but perhaps you can use it as
a guide with a lawyer of your own."

I'm naive in legal matters, so I cannot understand how a relatively entry
level EULA can be copyright. Aren't these things pretty similar?

~~~
skmurphy
I have never seen a legal contract protected by copyright. Most contracts use
very similar language because--although it looks like English, it's not--you
want to use wording that already has settled definitions in case law. I am not
a lawyer and spending 1% of the value of the contract on legal fees is a
reasonable rule of thumb.

~~~
dctoedt
Copyright arises automatically in the U.S. and much of the rest of the world
for "original works of authorship." Legal contracts can qualify. There have
been cases where Law Firm A sued Law Firm B for wholesale copying of, say,
bond-prospectus documents.

~~~
skmurphy
OK. Are you aware of any claims of copyright infringement for a software
license for commercially available software (not a custom contract).

~~~
dctoedt
Haven't heard of any. (But remember Murphy's Law.)

~~~
skmurphy
It's no trick to play upon fears. It's not a useful trait in an advisor.

------
shafqat
Great post. On a slightly related note, are there people in the HN community
who are awesome salespeople? Any of you looking for a job?

I've found that selling to enterprise customers isn't the hardest part - it's
find really awesome salespeople.

