Remember you are selling a service....
Many of the companies I meet have a business to business sales model. It has become a cliche of the Startup world that large corporations are a slow and difficult sale. It goes double for major government departments like health or education. Having spent thirty years working in this environment delivering and selling professional services to some of the biggest companies in the world, I guess I should have some ideas to help manage this process.
Back to basics first. Almost without exception B2B Startups have adopted a SaaS model. This is absolutely correct but remember what that last S stands for. You are selling a service not a product.
This is really important because there are a lot sales methods and sales people out there which are built on product sales. The devotees of Huthwaite's SPIN selling and Miller- Heimann Strategic Selling spring to mind. Do not be tempted by these or similar approaches. SaaS is not just window dressing. Your customers will expect a service so make sure that is what you sell them and what you give them.
In B2B, know your competition....
Selling services start with one key secret - Whichever industry you target, whatever your software does, regardless of the country or business function you target, your top two competitors are always the same. SAP, IBM, Salesforce.com and Amazon also face the very same top two competitors. They are:
Do nothing; and
Do it yourself.
In that order.
Companies do not buy software (or anything else)
This may seem a radical departure from the traditional view of competitive markets but it is very important. If you do not beat Do Nothing and Do it Yourself, your large business customer will not buy. No amount of features and benefits and cost savings which are not offered by other software providers will help you.
The reason is simple. Businesses do not buy software. People buy software. In a large company a whole range of different people with different agendas and variable levels of influence are involved in the decision to buy. Do not make the mistake of believing these people are some amorphous corporate buyer. Treat them just like consumers. Identify their real world problems and find a way to help fix them.
Look at your two competitors in this light. Busy managers in big companies will always have the temptation to do nothing. Busy managers tend to be driven and successful people so they are also capable of getting a things done without any help that is doing things themselves. Your offering needs to get at something which is strong enough and urgent enough to overcome both of these.
Know your market....
The right time to address Do Nothing and Do it Yourself is in the product development phase. I get frustrated when I hear Startup pitches which say things like “According to IDC 75% of companies have problem X.” I would much rather hear about research which concerns managers and leaders i.e. real people. If you do this then your software will go at least part of the way to addressing one or more actual problems.
If you start with a well designed product then half the battle is won. The second part is in the sales process. This will be time consuming. The important thing is to keep reading the signals and steering the conversation in the right direction. You can’t avoid spending the time but you can avoid wasting it. Just getting the next meeting is not progress in itself. Often in fact it is a method of Do Nothing. I have passed you onto the next person so I have now avoided doing any work - success!
Learn to read the signals...
Reading and reacting to these signals is a big subject but there two big positive signs that you can watch out for. Number one is access to power. If the person you are meeting is prepared to take you to a major decision maker this is a great signal. This is not necessarily their boss so be careful. Not all big job titles carry real power or if they do it may not be the power you need to access. Do some research before jumping for joy at meeting the next guy.
The second sign works the other way. If someone in power sends you to their subordinates to plan for execution this is awesome. Again caution. You need to be sure you have actually been talking to power. You also need to be clear they have delegated action. Delegation for further review and investigation is just another Do Nothing.
I am conscious this all sounds pretty scary. Its not. Its an appeal to use the instincts and intelligence you already have. Talk to people, find out their problems, fix them. Don’t forget this because you are selling to a large company and don’t assume you are making progress just because they keep talking to you. Measure your progress and invest your time wisely. The process will not become short but it is much more likely to be successful.
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.