Written in collaboration with Sean Murphy of SKMurphy, Inc.
For early-stage founders aspiring to scale fast and get the market recognition that comes with landing a prestigious Fortune 500 customer, having an enterprise sales strategy can be a game-changer. The visibility and legitimacy that these jumbo accounts engender are understandably enticing, and for some B2B startups pursuing them can be a worthwhile sales objective.
But before diving in headlong and investing the extensive time, effort, and whatever patience you can spare, you must understand all that is required and the challenges that stand in your way.
A successful sales campaign aimed at enterprise B2B accounts requires a level of sales execution that can easily overwhelm even the most capable startup teams. These sales campaigns are invariably time-consuming, complicated, resource-intensive, and non-standard. And while there are compelling reasons to pursue this lucrative customer channel, you will want to proceed with your eyes wide open and expectations adequately grounded.
Before digging into the specific strategies and tactics of selling to enterprise accounts (which we will cover in future installments in this article series), let us first cover the many dynamics that contribute to the often mystifying and always complicated decision-making processes that you will face selling to big, complex corporate accounts.
Fundamentally, enterprise accounts are enormous entities with multiple lines of business (LOBs) with intricate, involved organization structures. They do business with and have operations across multiple geographies, supporting various markets and customers with different departments, budgets, reporting structures and business requirements.
This fact alone would logically make any resulting sales cycles longer and more challenging, but the difficulties only begin there.
More Players Means More Complexity
Perhaps the single biggest challenge in selling to large accounts is the sheer size and scope of the organizational structure. Your typical small/medium-sized business (SMB) or SaaS (Software as a Service) contract might reasonably be expected to close after a few conversations with a clearly identified decisionmaker and a two-week trial period.
Not so with an enterprise sale. This same decision inevitably requires involvement and buy-in from a range of individual stakeholders across multiple departments and functions. While the ultimate number of decisionmakers, meetings, conversations, and level of documentation needed to ensure a positive outcome will vary considerably from account to account, it will nonetheless require substantial time, energy, resources, and consensus-building.
Among the many stakeholders you can expect to contribute to the ultimate selection of your solution include:
- Executive Management
- End Users
- Information Technology
To navigate such complex sales opportunities and arrive at a successful outcome requires the ability to identify, engage and convince the right people of the solution’s value. And it is seldom only one right person. Gaining consensus across a broad spectrum of stakeholders is a fundamental characteristic of the enterprise sale, and demands a level of patience and consistency in approach from everyone involved on the selling team.
And while enterprise sales is a team sport, it will require a sales leader. In our view, that role is akin to that of ‘quarterback’ or ‘franchise owner,’ one who must coordinate a diverse range of conversations to ‘triangulate’ [link to blog post] priorities and agendas. This triangulation requires navigating multiple relationships to orchestrate some form of consensus, one that ideally becomes the basis and foundation of a long-term business relationship between buyer and vendor.
Effective relationship development becomes strategically important because the initial sale is often not the game-changing win that the startup is hoping for. Perhaps counterintuitively, the initial deal with an enterprise-level account might be no larger (or even smaller) than a typical SMB sale. This is due to the incremental proof-of-concept or pilot approach that most enterprise accounts employ as part of their implementation strategy.
Politics at Play
Large corporations have lots of people, which brings with it corporate politics. And unfortunately, your small but important project that promises to deliver a 5X return on investment and measurably enhance a particular division’s market competitiveness is not immune. It may very well be that a win for one individual or department inside the organization could be viewed as a loss for others. There are turf, budget, influence, headcount, and various other factors that could be affected by the solution chosen and its ultimate results.
Your sales strategy will need to anticipate and respond to potential political obstacles with the same intensity you would apply to any other competitive threat.
As one example, a past enterprise client had us run through an exhaustive evaluation and selection process, one that ultimately had us winning a large implementation with significant long-term opportunities. But contracts could not be finalized nor work begun until we were able to find a technical way to avoid encroaching on existing but antiquated systems and processes under the control, and with the very sizable corresponding headcount and budget, of a ‘competing’ director in the company.
These dynamics are not easy to identify, interpret, or respond to without inside advocates to assist and coach throughout the sales process. As the account gets larger and more complex, founders will find it critically important to develop and nurture those key internal relationships, both for the initial opportunity, subsequent expansion, and long-tern survival in the account.
Competition of Priorities
A more predictable sales obstacle is the basic complexity that comes with large customers. An enterprise client will have a broad and complicated range of priorities and objectives to accomplish. Any one department will have a myriad of KPIs, MBOs, OKRs or other requirements. Multiply that by the number of divisions and departments inside the organization, and you begin to gain an appreciation for the level of complexity.
Couple that appreciation with the real possibility that those various priorities may well be in competition or conflict with each other. Any successful sales strategy needs to be cognizant of these incongruities. Your goal is to ‘thread the needle’ and deliver real, measurable value without simultaneously creating potential sales objections from outside influences or entities. Similar to political challenges, having internal champions to position the solution properly and provide organizational air cover can be invaluable, especially as the solution size increases across the organization.
Workflow and Infrastructure
Enterprise accounts are hairballs. They rely on a complex web of systems, networks, workflows, and procedures. These moving parts may be decades old, custom-built, undocumented, rely on black boxes, and include numerous third-party vendors and interfaces to keep the operations running.
This complexity can translate into an enticing, even endless pipeline of new problems to solve, and thus new opportunities to pursue, and thus a potential windfall for the nimble, innovative startup with the right angle and the right combination of skills and resources. But this also demands an ability to coexist effectively within that confusing web. Any system or process change or upgrade can upset the delicate balance and introduce huge negative ripple effects and unintended consequences. It is, ultimately, these unknowns and risks that have kept those very suboptimal systems and processes in place, and thus paralyze and prevent a large account from modernizing.
For example, a large pharmaceutical company was challenged with developing a web application that allowed physicians to access detailed product information quickly for a broad range of conditions. During the discovery and solution design process, we were able to uncover a separate and larger need (supporting the outreach efforts of their field sales force) that was squarely part of our company’s skillset.
It was only after the smaller initial project was well underway and our capabilities proven that the much larger second project was awarded to us (with cursory negotiation but no other outside competition considered.) But the bigger truth is that the larger project would have been impossible for us to win, as it was essentially invisible to both the client and our team, without the ‘foot in the door’ opportunity that provided ample opportunity to understand and ideate an effective solution.
The ability to spot and then map out solutions to large infrastructure challenges requires rigorous discovery throughout the sales process, and not just during the initial stages. But executed correctly, a thorough technical assessment of the customer’s internal systems and processes, combined with curiosity and a genuine eagerness to help your future customer, can help startup founders identify both potential windfalls and pitfalls and the insight to know which is which.
Enterprise customers are subject to ongoing and unpredictable change. They can (and will) reorganize or layoff the very employees you are working with, often without warning or consideration for the impact causes. Key contacts or stakeholders can be promoted, reassigned, or resign as quickly. Budget cuts, acquisitions, spinoffs, or significant market shifts are just a few of the potential upheavals that can delay, sidetrack or kill an otherwise promising sale.
While there may be steps you can take to limit the potential damage and delay, it is essentially impossible to prevent these setbacks completely. The best preparation is often simply knowing that anything can happen — and probably will. These risks should be part of the founder team’s initial and ongoing assessment when considering the pursuit of enterprise accounts.
The Size of Enterprise Problems
Fortune 500 companies have enormous problems. Like their organizations, their challenges can cost millions or even billions of dollars, span markets and geographies, and involve multiple departments and key decision-makers.
This very complexity may rightly entice startup founders to pursue enterprise accounts, because they view these problems as significant opportunities.
Unfortunately, you won’t be alone. Large-scale opportunities will naturally draw the attention of large-scale solution vendors who can often promise less risk and a proven track record. Your ability to compete will be measured and tested against companies with deep pockets, deep benches, and probably deep relationships within the prospective customer. With problems of such enormous scale, your differentiating factors may not trump a larger competitor’s depth of resources.
Add It All Up
This formidable list of sales obstacles can seem daunting. Selling to enterprise accounts is exponentially more difficult and potentially more costly, both in time and resources than that of the SMB market. At a minimum, selling to enterprise accounts can promise to be a highly disjointed and drawn-out sales endeavor.
And one that is invariably a multi-step process. It is exceedingly rare that a large account will select and implement an enterprise-wide solution from the outset. Instead, they will typically require an initial pilot or a proof-of-concept, followed by a coordinated roll-out over months or years, if at all.
Earning the big enterprise windfall requires a protracted investment in sales energy, dedication and follow-through. The big brand name may be something your company may be able to tout after a few months (but not likely), but the big financial home run usually lags far behind.
In the meantime, your startup will need to invest substantial resources, time, and energy throughout the sales process. These companies and their challenges can consume essentially everything you can throw at them, so it is incumbent upon the founders to enter into the large account sales space wide-eyed and prepared.
Our intent is not to discourage startups from selling to large enterprise accounts. The potential that a successful enterprise sales approach can deliver is enormous, and there are a few better ways to scale a startup strategically and cost-effectively.
The key is in the execution.
This is an early excerpt from an upcoming book on enterprise sales. To learn more and get early updates on Brendan’s books in progress, sign up below.