Introducing Enterprise Sales for the Digital Age April 25, 2014Posted by bernardlunn in Deal-making, Enterprise Sales, SAAS, start-ups.
Tags: crm, enterprise sales
This is # 1 in a series of 12 blog posts. You can get value from each in isolation, but if you really need to understand enterprise sales, it is worth reading the whole series. You can buy an improved version, neatly printed and bound, for $6 from Amazon.
This series is written for technically-oriented founders of enterprise software ventures who need to hire & manage sales people and to hire & manage the people who manage those sales people. If you sell enterprise software for a living, you may also get value from thinking about how the game of sales has changed since you went on those early sales training courses; the Internet changes everything, including sales.
The techniques for enterprise sales were created in the years when companies like IBM and Oracle were rising to prominence. These techniques worked very well. They were encoded into books, CRM systems, training courses, methodologies and the daily work of countless sales executives and sales managers. If you wanted to close complex, big ticket enterprise sales you used these techniques.
Then something happened. That something is called the Digital Age, the convergence of mobile, social, real time and big data. This resulted in techniques such as SaaS, Freemium, Marketing Automation, Growth Hacking and Viral Marketing. It seems like it is time to throw out the old and bring in the new.
Not so fast.
Ignoring the new techniques of the Digital Age is not smart. Nor is it smart to use those techniques alone and ignore the wisdom of the past that created the enterprises that dominate our landscape today.
My aim with this book is to marry the best of the old with the best of the new. There are other people thinking about this, the entrepreneurs who are creating the Salestech ventures that I profiled in a series of posts on ReadWrite.
I have created this book as a series of blog posts, a serialized book in the tradition of Victorian novelists like Dickens who originally published each chapter in monthly magazines. (I did this before with the Startup 101 book that lives at ReadWrite). The content will always live here online thanks to WordPress. If you want the convenience of a PDF copy that you can print, please send me an email.
There are six reasons why many entrepreneurs need this guide now:
- There is a Renaissance in Enterprise Software. Or as the VCs would say, “this space is hot”. Or to put it another way, Google, Facebook and Twitter sucked the air out of the indirect/ad-driven model for debt-burdened consumers, so lets get direct revenue from where the cash hoards are overflowing in big companies.
- It is different this time. Consumerization, SAAS, Freemium, social networking – none of these were around when the early enterprise sales guys were learning their game. Big enterprises are facing existential crises related to the twin challenges of digitization and globalization. That’s good news, there are plenty of problems to solve with tech. The bad news is, don’t expect to get attention/budgets selling the “same old, same old”. The Big Old Vendors have got same old, same old sewn up. Don’t extract a sales team from those Big Old Vendors and expect them to meet today’s challenges with today’s tools for your startup.
- Most entrepreneur’s sales skills atrophied during enterprise software’s decade in a coma. I call the last decade a “coma” in enterprise technology, because there was very little innovation, just big old vendors selling the same old stuff to the same big old enterprises in the same old way. Most founders in the last decade were developers who did not want anything to do with sales; who wanted anything that looked like Glengarry Glenn Ross? Although it is different this time, there are still some old-fashioned sales skills that few entrepreneurs can ignore. Not quite everything is different. This series adapts the timeless verities of sales to the modern world.
- Developer entrepreneurs need to be at least be Consciously Incompentent in Sales. Developer entrepreneurs are mostly Consciously Competent in development (good and always figuring out how to get better), but need just enough to be Consciously Incompentent in Sales (know what you don’t know so that you can hire well). That is why I keep each chapter to the length of a blog post; you don’t have time for a PHD dissertation on sales and our attention spans have become shorter thanks to the Internet. The aim of this series is to save you from being Unconsciously Incompent (the one fatal quadrant).
- Your product will not sell itself. Even if you opt for a sales-lite (try it online) model, you may need to sell to channel partners and you may need to sell the first few customers yourself (“do things that don’t scale”). Even if a consumerized Freemium model is your foot in the enterprise door, you may later need to meet the folks who control the big budgets in order to scale that.
- Despite all the great marketing technology, the bottom of the funnel needs attention. Despite the revolution in consumer marketing that we see from inbound marketing and the scientific processing of leads through Marketing Automation, the impact on B2B has been light and the impact on the enterprise end of B2B has been virtually non-existant. The attention today is on the bottom of that funnel where leads become sales – or don’t.
I am not the only person observing the increased focus on sales. This is from Businessweek:
“In the past few years the number of sales programs at colleges and universities in the U.S. has exploded, according to the “Sales Education Program Landscape Study” done by the Center for Sales Leadership, run out of DePaul University’s College of Commerce. In 2007, courses in sales were offered at 44 U.S. schools, a number that jumped to 101 schools in 2011. Now 32 schools offer a major, minor, or concentration in sales, up from nine just four years ago, the study found. Even MBA programs are starting to get into the game, with 15 now including sales courses as part of their graduate programs in 2011 and six offering an MBA with a sales concentration.”
The first four posts describe the key stages of the sales cycle. These posts follow the enterprise sales process, which is like a game of chess
Beginning: how you get leads, your opening moves.
Middle: proving product fit to that enterprise’s need
End: closing, getting signature and cash.
As a tech entrepreneur you may have to do some of this yourself. You will certainly have hire people to do this. It is useful to understand what the people who you are hiring will be doing.
The key management concept is CAC – Customer Acquisition Cost. You aim is not just to sell but to sell with a low enough CAC. If your CAC is too high, investors will conclude that “it may be a good product, but it is not a good business”.
We start at the beginning, like the opening moves in a chess game. How do you get leads? More importantly how do you do this cost effectively:
How do you get Enterprise leads that generate the right Customer Acquisition Cost (CAC)?
Then we focus on what you do once you have made contact and you are in the sales process.
Once you are through the door, focus on the buy process to reduce your Customer Acquisition Cost (CAC)
When you are deep in the middle game of chess, it gets horribly complex. It is the same when you are trying to prove product fit to an enterprise’s requirements, there are too many variables to manage. This post gives you a way to focus and KISS.
Deep in the complexity of the middle game, keep focus by imagining the press conference and concentrating on the “power of one”.
Finally, nothing happens until you negotiate and close. There are so many books, courses, seminars and theories about negotiation. Much of it “does not stick”, because in the heat of the moment you need to make instant decisions. One way for negotiation tips to stick in the mind is to relate them as stories, particularly stories where somebody screwed up really badly or did something clever to gain advantage in a difficult situation. These are the the subject of:
Negotiation Ninja Says: Tips on Closing from those with scars on their back
We then move onto management subjects. The first in the management series tackles the toughest question:
How to hire the A Team sales guys
The next post describes how to manage these rain-makers. How do you manage enough to meet company objectives without “crimping their style”:
How to manage a sales team in the era of bring your own everything
Is forecasting a science or a black art? It is certainly something that keeps CEOs of startups up at night, a lot of resource allocation (what a CEO does) depends on forecasting. Yet most forecasting systems are “garbage in, garbage out”. This post recommends a different way of thinking about forecasting.
Forecasting: Keep all stakeholders on the same page by rewarding accuracy
Before starting at the beginning of the sales process, the first post asks a clarifying strategic question: