We’re pleased to announce the Bowery Capital 2020 Startup Sales Stack Report! This report is meant to serve as a guiding framework for anyone evaluating sales solutions. Whether sales, marketing, customer success or management, if you’re thinking of using or buying software to optimize customer…
Last week on the Bowery Capital Startup Sales Podcast, we hosted Steve Bachert, VP of Sales at Uptake, to explore the topic of “Taking a SaaS Account Enterprise-Wide.” Steve shared with us his strategies for selling SaaS into large enterprises, and the myriad special considerations closing the largest deals will necessitate. As a sales leader who has driven over $130MM in revenues for companies like Parametric, Cloudera, and HP, Steve has a deep understand of what selling SaaS takes when you’re targeting the Fortune 1000. Below, we’ve extracted from that episode the 5 key considerations a startup stakeholder should keep in mind:
(1) Every SaaS Company Eventually Needs a Top-Down Enterprise Strategy. Steve began our discussion by diving into the idea that, while high-velocity strategy that focuses on closing many smaller, less complicated deals can be extremely effective for early companies, it won’t provide the later stage “hyper-growth” required to break through the growth phase successfully. He posits that every SaaS company will eventually need to adopt a strategy to sell into the Fortune 1000 and build relationships at those C-levels. Most organizations are generally under-prepared to make this transition. To combat this, you must build the groundwork as early as possible, well in advance of on-boarding even your first F1000 client. By the time you’re selling SaaS into the largest of enterprises you should have already conducted a self-assessment, spoken with many other peer CEOs / CROs who have been there before, and prepared your organization for this next level of maturity.
(2) The Enterprise Sale Is a Whole Different Animal. Organizations may have well structured business development, customer success, and support teams that manage the life of their current small to mid-size sales. It is rare, however, that any of these will address all of the needs of selling SaaS to large enterprises. Recognizing this, you need to ask yourself the following: Can you afford a longer sales cycle? Do you have the capacity to service very large customers? Can the skill-sets of your team bring enterprise opportunities to close? Will F1000 clients require an expansion of your customer success organization, a sales engineering program to ensure seamless implementation and onboarding, or security / compliance audits to meet vendor approval requirements? Don’t assume what’s worked in the past will work in the future, and don’t underestimate how challenging the transition can be. Even for successful companies, as Steve describes, the evolution toward enterprise deals required a sort of “internal pivot” to execute properly while not endangering the existing client base.
(3) Figure Out Where Your Gaps Are. To begin structuring an enterprise strategy, you need to identify gaps in your capabilities. As mentioned above, speak to as many peers (SaaS founders and CXOs who have been there before) as possible to understand how and when they were able to pull off this “enterprise pivot” in their sales org. Interview your key customers thoroughly to understand what hurdles vendors have needed to win. These lessons will not only help you prepare to on-board whales, but also help craft your sales & marketing messaging as you begin selling SaaS to the Fortune 1000. Starting with companies that you know or have long-standing relationships with (e.g. your beta customers that are still with you) can help expedite this process and foster transparency. Start writing your “playbook” for programmatic enterprise sales. It may also be useful to bring in team members who have experience dealing with enterprise sales framework to help pin-point specific requirements and speak the language of large-company deals.
(4) Never Underestimate A Strong Sales Engineering Org. Having top-notch sales engineers who understand both the sales process and the technical nuances of your product (and implementation process) can be invaluable to winning whales. These individuals have the ability to convey and clarify product features in a way that normal salesmen may not. This can create a level of assurance and de-risking among technical stakeholders at your target customer company. Strong sales engineers can also help streamline POC processes and help reduce the burden of longer sales cycles on your sales org. The sales engineer can also be useful for giving the sales team a better sense of the product road map, creating a positive feedback loop around sales messaging and even qualification. If your sales department brings in a customer that requires features or iterations far outside of the scope of the core product, it could be a mistake to move forward even for a high value contract. Tabling a deal until these needs can be met is much better than failing to hit POC goals, so leverage your sales engineers to know when a deal is primed for success or not. Failing to manage the requirements of F1000 deals have doomed many SaaS companies, so leverage every resource you can to help see around corners and maximize success in navigating your earliest large-scale, enterprise-wide deals.
(5) Know When to Let Go. One of the easiest mistakes to make when selling SaaS into large enterprise customers is falling prey to the promise of big logos. F1000 deals come with bigger dollar signs, but also long sales cycles in nearly every case. If you’ve worked with a target whale in good faith to explore a sale and it becomes clear it’s not the right solution or timing, be transparent as soon as possible and don’t hold onto a losing deal. It’s important to be honest with yourself, not only to preserve your time, but also to salvage your ability to come back later and get the account. If you weren’t honest about your value prop or readiness upfront, that’s a surefire way to kill your chances to redeem the opportunity at a later date. One thing doesn’t change as you pivot into large-enterprise sales: you should be going after opportunities that you believe with a high certainty are good fits for your product. If this product-market fit isn’t defined clearly early and often with equal buy in on both sides of the table, you risk causing more problems than the big contract is worth. Know when to let go, use failed deals as a learning experience, and iterate on your process to maximize your enterprise viability going forward.
Danger ahead! Lately we’ve observed some obvious, and also not-so-obvious challenges in pitching a product that sells into the SMB segment to VCs. While the total addressable market for SMB B2B SaaS products may be huge in terms of numbers of customers, this is almost…