
Selling to enterprises - prakash
http://cdixon.org/2010/02/06/selling-to-enterprises/
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mscantland
When a customer is going to spend more than $100k, they look for a
relationship to minimize risk. Golf and similar activities are what the buyer
demographic does with their friends.

Do people really think that customers that sign up for $10/mo "to-do" apps are
more sophisticated buyers than enterprise customers?

In my experience, many people who complain about the enterprise sales process
are failing for their lack of real domain expertise not their distaste for
"schmoozing." They are also usually underestimating the intelligence of their
customers and unwilling to build relationships.

Disclaimer: My companies do enterprise software. Edit: I've also played golf
exactly once in seven years since we started.

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rgrieselhuber
How does this apply to subscription-based models? I'm guessing that the valley
of death bounds change when you're talking about monthly recurring revenue.

If most managers can approve a $5,000 purchase without much hassle, what's the
magic number for monthly subscriptions? Is it $5K/12? Higher? Lower?

Also, with subscription-based sales, you often have the opportunity to sell
more plans to the same organization if your product solves their problem. Is
there some magic number that people have experienced here? If it's proven by
one business unit, can you get enough "grass-roots" support to equal something
close to $100K/12? That would be nice because it cuts down on the timeline of
the initial sale and is a natural way to recruit internal champions.

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tom_pinckney
I vowed after my first startup never again to build an enterprise product for
this reason. Plus I don't like golfing and drinking with some random guy in
Omaha trying to convince him my product solves one of this top three problems.

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prakash
During my 3 years doing enterprise sales at Akamai, I learnt a ton of things
from my customers and met some really interesting people. Not all enterprise
sales involves golf and drinking and schmoozing.

 _Edit:_ I would also add that you tend to learn a lot more about your product
from your customers. In addition, once you target a certain industry and speak
to all the major players, you get some insight that helps with product, sales,
marketing.

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tom_pinckney
Yeah I didn't mean to sound like that's ALL there is. But I was time and again
surprised how often buying decisions had nothing to do with the product,
company's need etc. I guess I was perhaps a little naive :)

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prakash
So was I when I started. There are so many reasons folks buy that doesn't
involve our product or company, it's mind boggling.

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edw519
The #1 question to ask when selling to the enterprise is, "What are the
spending authority cut-offs?" Nothing means more.

Funny, in my experience, the 5K and 100K numbers are pretty accurate.

I recently assisted in the purchase of business intelligence package. The CIO
(my contact) had authority to spend up to $100K. Anything more had to go the
board, and that "just wasn't going to happen". One vendor knew what to ask and
bid $93K. The two others were much higher. Guess who (automatically) got the
sale. The other 2 may have been better, but we'll never know. They were
effectively eliminated by rules they never asked about.

At the low end, almost everyone has authority to spend up to $5K, even users.
They bring in desktop software or SAAS under IT's radar. There's _huge_ demand
for solutions to their problems that fit under their spending limits.

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weaksauce
How willing are the people to disclose the spending authority cut offs?

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edw519
_Very_ willing, especially when it's in their own best interest to make a
deal. Remember, these are people trying to solve their problems without going
up a level for permission.

Of course, any good salesperson will find this out on Day 1.

