In today’s episode, Steli and Hiten lay out the strategies for developing enterprise level clients. Before entering the enterprise space, remember that these clients require a huge commitment in terms of time, money, talent, and other resources. Product pricing and sales cycle duration are discussed at length in this episode. Find out why targeting enterprise level clients in the initial stages is generally a bad idea, and what your company needs to succeed in this uber-competitive marketplace.
Time Stamped Show Notes:
00:33 – Even companies backed by single founders are going upmarket instead of targeting small and medium sized businesses
00:55 – What qualifies an enterprise sale?
00:55 – Enterprise sales concepts apply if you are charging more than $10,000 per year for a product or service
01:04 – An enterprise sales can quickly amount to millions of dollars per year
01:24 – It takes a high amount of time, money, energy, and resources to close an enterprise deal—so build this effort into your pricing
02:05 – Money: Do not make the mistake of lowering your product price
02:05 – Startups tend to make the mistake of lowering their price in a bid to acquire an enterprise level customer
02:36 – Multiple decision makers in an enterprise level organization tend to delay the closing process
03:05 – Low pricing dilutes your brand value – Remember, a low priced product has a higher churn rate
04:02 – Time: Do enterprise level customers have a longer sales cycle?
04:11 – Yes
04:31 – Need to step back and analyze the reason for this – Often, you are making the mistake of not involving all key decision makers
04:59 – Map the organization chart to zero-in on key decision makers
06:05 – Steli advises using his technique called “Virtual close” which involves asking the client about his estimate to close the deal and then backing it with rigorous follow-up
07:00 – Prepare a roadmap of your sales cycle to determine if you can shorten it
07:00 – Kickoff your sales cycle by talking to all stakeholders and asking the right questions
07:19 – Doing a pilot is always advisable
07:40 – Deal with the procurement and legal formalities
09:30 – Startups intend to cater to the SME sector and “stumble” into an enterprise level client
11:18 – Need for a solid strategy to target the enterprise sector. Just because an enterprise level client shows interest in your product does not mean you are a good fit
12:19 – Which companies manage to succeed in the enterprise space?
12:19 – Most companies start by targeting the SME sector, build their resources over the years before targeting enterprise level clients
12:46 – Some companies manage to target enterprise level clients in step one itself. These are mostly backed by founders with experience in the enterprise space who have managed to raise a ton of funding
15:00 – Not a good idea to start off by targeting enterprise level clients if you are not backed by the necessary experience and funding
15:12 – Existing business relationships are another way of targeting enterprise level clients
16:40 – Open source companies are an example of marketing effort in enterprise
16:46 – In an enterprise sale, the end user and buyer are different entities
17:02 – Adopt a “Bottom-Up” approach by targeting end users to build your enterprise sales via marketing
17:23 – Solar winds is a great example of a company that gets clients hooked on open source solutions, and then upsells an enterprise level product
17:50 – When targeting enterprise client, marketing, rather than sales, is the fastest way to learn
18:25 – “Ask for advice, you might get money. Because if you ask for money, you might get advice”
18:42 – Seek out people who could be potential buyers,...