By John Downes, Managing Director at Scaling Partner
Winning you first big enterprise deal represents a huge milestone in the B2B start-up journey, whether this win comes in the form of a major public sector bid or snaring a blue-chip client, the rewards can be huge as the case study and reference is a pre-requisite to scaling up. Sadly, that win it doesn’t come easily, if it did, we’d all be successful entrepreneurs!
At Scaling Partner, we have helped a number of technology start-ups to scale and had a couple of successful exits. We’ve learnt a great deal on the way, and here’s are the top five things I recommend you consider before seeking those big corporate contracts.
- Hire the best CRO you can possibly afford
It is useful to remember that as a start-up when you a pitching, you are “making a market”, not just “selling a product” in a well understood category. You are literally creating the market for your own category, and the sales process for your business from scratch. Therefore, it’s essential that the individual promoting your product to that enterprise buyer is passionate, genuinely believes in the product, is experienced at enterprise sales and has the gravitas to take senior buyers on a journey from knowing literally nothing about your product, to be being an vocal advocate. If as the founder, you tick all of those boxes then fantastic, this is the dream, if not then make sure you hire a Chief Growth Office asap and hire the best person you can possibly get your hands on. Do not hire someone inexperienced.
Yes, a superstar CGO is expensive, but it’s worth it. If you don’t have the cash for this hire, then be willing to part with equity to secure that showstopper seller, if you get this hire right your ROI will be off the charts.
- Be prepared and do your research
It is absolutely essential to know your target inside and out. Find out who the likely stakeholders are, the ones involved in the decision to buy. Who else might get involved or influence the decision? Find the ‘hooks’ that will grab the attention of each stakeholder and improve the chances of a successful sale. You will need to continuously work all of these people to make sure they are “buying”, so do your homework and stay on top of each of them during the sales process.
Invest the time to understand your prospect’s position in the market by reading the latest news and annual reports, understanding key financial and strategic issues that your product might naturally support. Being able to paint a picture how your product fits into your prospect’s business strategy will be far more effective than blindly pitching a solution that may or may not be useful.
Be prepared for a protracted corporate procurement process, an understanding what standards you will need to comply with, what policies you’ll need to adhere to, and any certifications needed before you begin.
- Prepare a relevant and compelling business case
Being able to cleanly articulate what problem your product is solving very important, spend time getting this crisp and clear. Then establish the monetary value that your product brings clients. Does it save costs? Does it reduce the probability of big financial risks occurring? Does it create revenue opportunities? Or is it all three? Build out your business case and be able to articulate this clearly to buyers. Ideally make it relevant to your specific product.
Start-ups must be crystal clear about how their product achieves these outcomes for businesses, spelling it out on a granular level in order to demonstrate the ROI. Our fastest growing companies, unsurprisingly, have a no-brainer client business case and help to solve strategic problems that tend to be fairly ubiquitous.
- Have an industry relevant case study
Enterprise buyers don’t have the time, energy, or perhaps more importantly, the political risk appetite to sponsor a product that is an unknown quantity. You need an industry relevant case study that speaks to your business case, even then if you only have one, they’ll probably still want to do a proof-of-concept project before entertaining a longer term contract.
I recognise this is most definitely a “chicken and egg” situation, and hence where your entrepreneurial hustle comes into play. If you don’t have a directly relevant case study to lean on, then you’ll almost certainly need to do proof of concept before you can land a major deal. Be willing to secure this at any cost, and make sure you collect the right data to prove your business case, and the right permissions to be able use the in sales collateral.
- Be disciplined on your sales process
Every step in the process, every iteration, be it an event, meeting, call or email requires careful thought and preparation. Never get complacent, always put the hard yards in.
A critical point in the sales process is that first conversation. As a rule, start-ups should always avoid going in with a cold outreach unless they have no other option. Our statistics clearly show that a warm introduction from a credible source is roughly 3-4x more likely to convert into a sale. And beyond that, a “hot” introduction from a trusted corporate partner boosts this likelihood to 5x. Spend some time to see if you can find a way to get as many warm or hot introductions as you possibly can muster before relying on cold outreach and consider channel partners as a go-to-market strategy.
Throughout the process, it’s vital you continuously qualify. Assess which stakeholders are “buying” and who you still need to work on. Always push to understand their process for buying, what the next step is, never leave it more than 24 hours after a prospect meeting to follow-up, always maintain momentum.
Remember, a deal is not closed until ink is on paper, so you must maintain the momentum of dialogue and remember they are always selling. This can be tough for 9-month enterprise sales cycle! But there are two things that kill deals: time and complacency. Keep an eye out for these as they’ll bring even the ‘surest’ deals crashing down.