Trying to break into the world of enterprise sales as a startup can feel like you’re David taking on Goliath. Only there are multiple Goliath’s in the ring, all vying for the same clients and deals.
You might not have the same resources or the brand power as more established companies, but that doesn’t mean you can’t compete against the big guys.
In fact, being a startup can actually give you an edge that the competition often lacks: the ability to remain agile, move quickly, and deliver targeted pitches and solutions. But that’s only possible if you back yourself up with reliable, hyper-personalized sales intelligence.
So, today we’re going to explore how startups can leverage better sales intelligence to outsell bigger market players.
A race against the clock: Enterprise sales from a startup’s perspective
Anyone who sets their sights on high-value deals and behemoth clients requires a solid enterprise sales strategy. But even with a reliable strategy in place, enterprise sales development is particularly challenging for startups – and a big part of this comes down to timing.
An enterprise deal can take anywhere from a couple months to a couple years to close. Unfortunately, most startups don’t have that kind of time. A year-long sales cycle lasts longer than some companies even survive.
As a hungry startup, you’re literally racing against the clock. If you can’t kickstart your cashflow and growth before your runway expires, you’re toast. It doesn’t matter how awesome your product is or how convincing your sales pitch is if you can’t stay alive long enough to prove it.
So, why bother going after enterprise sales to begin with?
Why startups can’t (and shouldn’t) ignore the siren call of enterprise clients
Big clients mean bigger obstacles, but they also mean bigger rewards. Yes, enterprise sales development is tough – especially for young startups – but the potential payoff is worth it. That is, as long as you can stay afloat long enough to seal the deal.
Here are the top three reasons startups continue to face the challenges of enterprise sales:
1. Increased monthly recurring revenue (MRR)
Enterprise-size contracts mean enterprise-size paydays. More importantly, a long-term enterprise client means you can expect to receive those paydays on a consistent basis. The best enterprise customers have an ongoing need for your solution and represent a long-lasting source of revenue.
2. Likelihood of expanding your engagement
Scoring your first enterprise client is often the key to unlocking an entire world of supersized sales potential. Now that you’ve got your foot in the door, there’s a much greater likelihood of expanding your existing contract and possibly getting a few referrals. It’s worth tailoring your solution further to serve the client’s needs and increase your earning potential in the process.
3. High-value social proof that helps close future deals
A satisfied enterprise client is a serious testament to both your product and team. Enterprise-level businesses are naturally risk-averse, so building up your reputation is one of the only ways you’ll be able to move further into that market. Once you land your first enterprise client, you can leverage that experience as proof that your solution works and win over your next enterprise client.
In short, a few successful enterprise deals could be the catalyst you need to achieve hockey stick growth. But how do you get started? Let’s take a look at how one company grew from early-stage startup to an enterprise selling machine with $300 million ARR.
The Story of AppDynamics: A Startup that Reached $300 Million ARR with Enterprise Sales
The journey of AppDynamics from early-stage startup to IPO-ready company that sold for $3.7 billion is the dream of virtually every founder.
Over the course of four years, the company established itself as a leader in cloud computing and increased revenue by a whopping 1000%. In January 2017, AppDynamics was scooped up by Cisco for $3.7 billion – just two days before it was set to IPO – marking the largest acquisition of a private company in twenty years.
Since AppDynamic’s ability to sell to enterprise clients played a key role in their impressive growth, it’s worth looking at how their sales team was able to land major deals.
Here’s what they did right, according to the company’s own sales leaders.
First, AppDynamics made it their focus to minimize friction in the sales process. This helped build momentum early in the conversation and move the deal towards a faster close.
They streamlined the sales process by allowing businesses to download and begin using their software without contacting anyone at AppDynamics. Using this self-service onboarding model, the company was able to get their product in the hands of more consumers than would otherwise be possible. In fact, their approach was so successful that AppDynamics’ sales team hit $30 million ARR within the first three years.
Then, in 2012, their sales team shifted from celebrating all wins equally to placing prioritizing wins with key value drivers that they could pinpoint, analyze, and replicate. After committing to a strategy-driven approach, the team soon began securing seven-figure deals.
AppDynamics continued to see success as they expanded their sales team because they hired the right people and provided thorough, ongoing training to help them excel. To ensure every member of their sales team was on the same page, they hired for specific traits: intelligence, coachability, character, and experience.
Through trial and error, the team learned tons about how enterprise-level decision-makers think about new purchases. They found that most enterprise clients need to see the three things when buying from with a startup:
- You’re able to identify and quantify their problem.
- You can describe a practical path from problem to resolution – not just in terms benefits but also how you plan to implement the solution.
- You can roll out a working solution within a reasonable timeframe. (This is where you can gain points against bigger competitors.)
Based on AppDynamic’s success, here’s what other startup founders and sales teams should keep in mind:
Focus on putting together a sales team of smart people who are willing to learn, adapt, and adjust their approach to support changes to your product, customers, and onboarding process.
Building stronger relationships with enterprise customers allow you to deliver customized solutions based on your understanding of their wants and needs.
Once you discover an enterprise sales formula or strategy that works for you (like focusing on reducing friction), use it to inform all future sales and product decisions.
The startup’s framework for enterprise selling
As with all sales, successful enterprise sales require building strong relationships. Having information upfront about the company and relevant stakeholders will help you establish that relationship more quickly and effectively.
Whether you’re dipping your toe into enterprise sales or looking for ways to improve your win rate, here’s a basic framework you can follow. Feel free to modify as necessary, depending on your client, product, sales process.
Step 1: Gather sales intelligence to lay the foundation for a successful partnership
If you want to build a meaningful relationship with an enterprise client, you need to start with an understanding of their culture, context, and organizational structure.
Whether you’re working on a new account or meeting with a new stakeholder about an ongoing deal, arming yourself with in-depth sales intelligence is key to preparing for important meetings and pitches. This should involve information about the individual as well as the organization, including how the organization operates, what direction the company is headed, and which obstacles and challenges are standing in their way.
Furthermore, you need to know how decisions are made within the organizational structure. Are you in contact with the right stakeholders? Are you even speaking to the right team to make this deal happen? What’s their baseline criteria for choosing new technology?
Create a detailed organizational chart so you can easily visualize how the pieces all fit together. This helps you prepare for meeting additional stakeholders as they’re added to the conversation.
Step 2: Analyze your customer’s needs and find out what you need to do to meet them
Once you know the organization’s culture, structure, and goals, you can begin to figure out which specific problems they need to solve.
At this point, you should also factor in whether they have an existing solution in place. If so, is it a band-aid solution that addresses the symptoms but not the cause? Or something that works just fine today but doesn’t align with their long-term goals?
Think about what you can offer based on the stakeholders’ challenges, beliefs, and desires. How can you tailor your solution to better serve their needs? Successful enterprise sales requires looking ahead to anticipate future needs on top of a practical plan to address the pain points they’re facing today.
Step 3: Sell the enterprise on your team’s strengths and vision
Communicate not only what you can provide in terms of deliverables, but also why an enterprise-level organization would be lucky to work with your specific startup team. Sell the client on your vision by sharing your own sources of inspiration and highlighting the unique strengths that make your team amazing.
Paint a picture of a world where the enterprise is already using and benefiting from your solution. How have their daily operations improved? What is the biggest improvement? How do the benefits translate into financial gains or operational metrics?
Create a roadmap to ensure your vision is understood and set practical milestones to explain exactly how you can implement what you plan to accomplish.
Step 4: Test the waters before diving into full implementation
This comes back to focusing on building out a long-lasting partnership. Rather than handing off your solution and moving on without a second thought, enterprise sales involves maintaining an open conversation to ensure implementation and onboarding go smoothly.
It can take time to roll out your solution across the entire organization, even if it’s fully customized and ready to go from day one. You should develop an onboarding plan to ensure relevant departments and users have the resources they need to get the most value possible from your product or service.
Typically, this step begins with a pilot project or proof of concept before moving into full-blown implementation. Learn and listen to feedback from stakeholders and users, keep an eye out for opportunities to adjust your offering, and potentially expand your solution to address even more of the organization’s needs.
Step 5: Replacing an Existing Solution
Finally, when the pieces have all fallen into place and your vision is playing out, you can talk to the client about replacing another existing system. Not only does this secure your offering as a long-term solution, but it also frees up the organization’s resources to increase the scope of your engagement and maximize the benefits you’re able to provide.
Since this typically involves challenging someone within the organization (whoever originally greenlit the older system), discussing replacements should be the last step to avoid adding friction to the relationship before the deal closes.
Remember to establish a serious partnership first, confirm they’re happy with the solution you’ve implemented, and then go back to remove the older system.