
Selling Software To Large Businesses - gasull
https://training.kalzumeus.com/newsletters/archive/enterprise_sales
======
bambax
> _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."_

Isn't this a line from "Shit My Dad Says"?
[https://twitter.com/shitmydadsays/status/4811790555](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.

~~~
prawn
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.

~~~
derefr
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.

------
lifeisstillgood
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.)

(1) [https://www.gov.uk/service-manual](https://www.gov.uk/service-manual) (2)
[http://gcloud.civilservice.gov.uk/about/](http://gcloud.civilservice.gov.uk/about/)
(3) [http://blog.mikadosoftware.com/2013/08/22/how-hard-can-it-
be...](http://blog.mikadosoftware.com/2013/08/22/how-hard-can-it-be-selling-
software-to-the-uk-government/)

~~~
cfn
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.

~~~
lifeisstillgood
Dang-nabbit - competition !

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)

------
davidw
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.

~~~
euroclydon
I think you need to have about 800 words for a page to rank well for given
keywords, incoming links aside.

~~~
Kiro
Source?

------
_jb
Incredible read patio11.

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.

~~~
HeyLaughingBoy
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.

------
peteri
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.

~~~
darkstar999
How can you charge maintenance for SaaS?

~~~
patio11
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.)

~~~
glimcat
Is this separate from the line item about support (best effort / no SLA
purchased)?

And if it's separate, in what sense does enterprise purchasing use
"maintenance"? Software updates?

~~~
ams6110
_in what sense does enterprise purchasing use "maintenance"_

90% of the time, they don't. It's a checklist item. They don't care if it ever
gets used.

~~~
__--__
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.

------
taude
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...

------
reubenswartz
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.

------
xradionut
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.

~~~
cheapsteak
Could you by any chance explain what is meant by "Does the software have
auditing capabilities?"

What exactly are "auditing capabilities"? Is it business-speak for log files?

~~~
catnaroek
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?

~~~
ams6110
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.

~~~
catnaroek
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.

------
pkorzeniewski
Such articles are really motivational for solopreneurs - to know that even as
a one-man company you still can land a major enterprise customer.

------
ciwk
"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."

i loved reading that.

~~~
gruseom
Me too, but you do realize he just sold you on something utterly untrue? :)

------
balakk
> "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.

~~~
ams6110
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.

------
raverbashing
This is really a nice writeup.

Good ideas, my only fear is not remembering this case when the need arrives.

------
simonw
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?

~~~
ajdecon
A simple line I've used before:

"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".

------
mindcrime
_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".

------
jason_tko
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.

------
snowwrestler
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.

------
darkstar999
> Last time we talked about SaaS pricing, focusing on people paying in the
> tens to hundreds of dollars range

Where can I find this?

~~~
svasan
I believe this would be the one -
[https://training.kalzumeus.com/newsletters/archive/saas_pric...](https://training.kalzumeus.com/newsletters/archive/saas_pricing)

~~~
alien3d
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.

------
eps
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.

~~~
prawn
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.

------
antonwinter
great read. i enjoyed the specifics of how you beat out the big player

------
unz
No thanks. Destroy enterprises, never negotiate with them. If their internal
processes are so easily gamed, they're easy prey.

~~~
AaronFriel
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?

~~~
unz
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.

~~~
mindcrime
_and let the product sell itself._

And what if it doesn't?

 _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.

