You’re small. You’re hungry. You’re passionate. Armed with your slick demo, marketing collateral, edgy presentation, and stats & facts, you step out of your cramped 1,000-square-foot headquarters, and take it to the street.
Except selling something one by one sucks. It takes a lot of time and, unless you're selling a product with a high value, it's tough to scale. It's tempting to go after the big dogs, selling once to a large MegaCorp and riding that sale to world domination.
The problem is, you're nobody. You might have the best idea in the world with a strong ability to execute but you have no credibility. You are trying to get the attention of someone who has chosen a career in a large corporation. Do you really think they're a risk-taker that wants to bet their next 3% raise on a startup?
So, the question is: How do you sell to big business when you’re a startup?
It's not easy but it can be done. Let's take a look at a real-world example.
We were a SaaS company, two years in. We had a strong product/market fit with a well-defined, measured B2B sales process. Our sweet spot was small business owners (financial advisors) early or mid-career - even straight of out of college.
Our challenge was that our sales process could scale only with staffing - how do we grow revenues without massively staffing up and without taking on new risks?
The lightbulb moment came when someone called and said he wanted to pay for a software subscription for one of our customers. Who this caller was and what we did next completely changed the future of our business.
What we did (kind of in this order, with lots of mistakes)
1) Map out the value chain of your industry and where your current customers fall in it. Identify who else benefits from customer use of your product - up or down the chain. In this case, we had originally targeted individual Financial Advisors. Guess who called us wanting to sponsor a subscription? A Wholesaler who made a commission if the Financial Advisor sold more of his company's financial product. And there's a multi-billion dollar company sitting at the top of this chain. Now we have our target.
2) Determine your entry point. You're probably not going to get a sit-down with the CEO. Analyze the value that you bring to the target company and then locate the person who is closest to the pain. Get an introduction through a passionate customer or a strong professional contact. In my case, even though we were a software company, there's no way I would approach IT - all I am is a risk to security (and their job security.) But the person who is directly responsible for sales - in the product area we specialized in - was the perfect person. With an introduction from our Wholesaler advocate, the meeting was set.
3) Pitch your decision-maker - and make it easy for her to pitch you. The person you speak with may not be able to independently make a decision. They are part of a large organization with a reporting structure, pre-planned annual budgets and expenditure authorization limits. Yes, I know startups pivot quickly. Big business doesn't. She will need to sell your proposal internally. The more that you can provide material that speaks in her voice to internal corporate concerns, the better. Internal corporate initiatives, industry trends, avoidance of risk, minimal disruption to existing processes, respect for internal territorial hotspots, you get the picture.
4) Prepare for the rubber glove treatment. You're going to have to deal with Procurement and Legal. Procurement's job is to get the best deal and the best price on the best payment terms. Legal's job is to allow no new risk into the organization. My key advice:
Make them look good. They need to show they've added value, done a good job. Know what's critical to you and, sometimes grudgingly, let them win every other battle. Ego, shmego. You're going after big game.
Be easy to work with. Give them a single point of contact. Set up an Ariba supplier account. Make sure you know your DUNS Number. Have a great attorney on call. Have pre-written standardized agreements ready to go and be completely prepared to throw them out the window when they want to use their own agreements.
Answer questions correctly and concisely, then shut up. When it comes to security and compliance, don't say more than what is asked. Too much detail can open up completely new avenues of exploration, which can only lengthen the deal's timeline and potentially put it at risk. "Q: Do you have fully redundant data backups?" "A: Yes."
5) Plant in the fall. Corporate budgets are cyclical, usually running on calendar years. You're looking at two key periods:
Budget planning typically starts in September and wraps up in November for the following year. This is the ideal time to get money earmarked for you. Mind you, the money doesn't show up until January 1. I love a pitching agreements effective in October with no payments due until January.
End of year: Budget owners often are in a spend-it-or-lose-it situation with surpluses at the end of the year. If you can keep your proposal within the decision-maker's available budget and independent approval authority, you can pick up some last-minute smaller deals that can lead to something bigger.
6) Work it, work it, work it. This isn't easy or (typically) fast. Sales cycle can run from 6 months to a couple of years.
7) Leverage your new customer. You've gained more than a new customer. You now have:
A marquee name to leverage in similar sales efforts
A battle-hardened set of documentation and agreements that have made it through an extensive review. Re-use them on your next proposal so you show how prepared you are up front.
An opportunity to sell additional services to your new, big customer.
In case you've actually made it this far, here were our results from that first Whale account:
Direct revenue boost, of course
Halo effect of a top insurance carrier promoting our software to their audience, generating perfectly qualified leads and additional ARR from our core sales model
Four additional enterprise deals within 12 months
It's a wild ride but you can do it. Would love to hear you experiences and tips in comments! If you have a situation you want to discuss, feel free to reach out to us at email@example.com.