How to Sell Enterprise Software

iStock_000005223179XSmallOne of the biggest differences between selling software to small businesses versus selling into the Enterprise space is the price. Most people think that it has to do with how well the software scales and it’s ability to do its job on an “Enterprise” level, whatever that it supposed to mean. Others will say it has to do with the feature sets and whether you bought the Micro-ISV edition or the Enterprise Edition. Simply not true.

The one and only difference is the total price on the bottom of the bill. And it is this total price that dictates whether or not you need sales reps to sell your software.

First, let me quantify roughly what I consider to be the different market segments. This is mostly based on my experience as a Symantec partner, so your definitions may vary but I want to give you an idea of what I’m talking about. In my world, up to 1,000 client computers is considered small to medium business(SMB), up to 5,000 is the Enterprise, and above that is Large Enterprise.

The Problem

At any given company, managers and directors have a certain level of purchasing authority. Below a certain dollar amount, they have free reign and can buy whatever they feel is appropriate and within their yearly budget without getting a signature from their manager for approval. So $50 isn’t a problem. Spending $50,000 isn’t quite as easy.

The problem of selling “Enterprise” software comes about because of the size of the company making the purchase. If I’m selling widgets for $50 each, I can sell just one to an Enterprise level company and they won’t even think twice. But what if they want one for every employee?

Suddenly the price tag for your widgets went from $50 to $50,000 for a 1,000 employee company, and to $250,000 for a 5,000 employee company. These companies make millions, or even billions but they’re not stupid. They put spending controls in place to ensure that people aren’t wasting money on frivolous things. It’s just common sense.

Unfortunately for the vendor, this prolongs the sales process from what might have been a few minutes on the vendors’ website, to one that takes several weeks or even months to complete. This is why sales reps are hired to sell into Enterprise accounts. The sales process needs to be managed from beginning to end.

What does the sales rep do?

Well, they buy dinner, they buy drinks. They make sure you get drunk and have a good time at whatever event they happened to convince you to come to. Eventually, you like them enough, or are drunk enough to blow thousands of dollars of money that isn’t yours and everyone is happy.

I’ve seen that happen, but most companies don’t really work that way. Mainly, it is the job of the sales rep to manage the sale and try to close the deal. That means determining if there’s an opportunity for a sale, and then driving that sale to its Natural End. Note that I don’t say to completion. The Natural End of a sale can be one of four things.

  1. You won the deal
  2. A competitor won the deal
  3. The sale got pushed into the future
  4. The sale died somewhere along the way

Winning the deal or losing it to the competition are self-explanatory. Sales get pushed to the future for a variety of reasons. Some are budget related, some are concerns over the product or vendor, etc. We’re going to focus on the last outcome,¬† which is that the sale died.

When a sale dies, it typically happens because you weren’t paying attention to something important. This tends to be the most painful outcome. If you are head to head with a competitor, at least you had a shot at it. When deals get pushed, you still have a shot, but you won’t receive a PO anytime soon.

The biggest problem with deals that die is that you wasted your time, money and effort chasing something that you never had a chance at winning. Everything you did was for something that wasn’t ever going to happen. Unfortunately, we’re all too human and think that because the customer is talking to us, we have a chance at winning.

Let me break you of that habit right now. Just because a customer is talking to you and likes you doesn’t mean they’re going to buy anything from you. In fact, it might be your best friend in the whole world on the other end of the phone who completely trusts you and it still might not happen.

Sales reps are typically compensated by the volume of sales they make, not the relationships they have with the customers they talk to. To be successful making sales at the Enterprise level, you need to spend  your time working on deals that have a good chance of landing, and avoid talking to customers who are either unwilling, or unable to make a purchase. So how do you tell the difference? Enter the sales methodology BANT.

BANT

BANT is an acronym which stands for Budget, Authority, Need, and Timeline. Without all four of these things, any deal you’re working on is going to die before you get a PO. This methodology technically is applicable to any sale, regardless of the price. But it becomes a lot more important at the Enterprise level where you are spending human resources chasing a small handful of customers. A sales rep can only talk to so many customers in a day, but a single website can “talk” to millions of customers all at the same time. So what do these terms mean and why are they important?

Budget – Make sure that whomever you’re talking to has a budget for whatever you’re selling or that they can get one. And remember that just because someone says they can get the money, doesn’t mean that they can. You can have all the ROI justifications you want in your back pocket, and if they don’t have the cash to spend, it’s just not going to happen. Spending $1 million now to save $10 million sounds great, but if they don’t have $1 million, it doesn’t matter.

Authority – Is the person you’re talking to the guy or gal who makes the final decision? Does he put his name on the PO? If not, you need to find out who does make the decision and talk to them instead. It’s ok to ask to talk to this other person. If you’re afraid of offending the person, then you’re in the wrong business. Always try to talk to the person in charge. You can convince every single one of his minions that what you’re selling will really help them out, but at the end of the day, they’re not the ones who have the authority to make the decision. Without speaking to him or her, you won’t know if there are other projects that take precedence.

Need – Is there a genuine need for what you’re selling? At the personal level, luxury items like chocolate and nice cars are not absolutely necessary. A Honda gets you to the same place as a Ferrari. It might be slower, but it gets the job done. Find out if what you’re selling is a necessity, or if they can get by with the way things are today.

Timeline – How long can things go on the way they are without addressing the issues that your product or service would address? If you sell RFID tags which help companies do inventory, ask how long they can do their inventory manually. If they can go forever, move on to the next lead. Remember that you can’t push a rope.

Summary

It’s important to make sure that the people you’re talking to have the ability to move forward and make a purchase. If they don’t have the ability to move forward, it doesn’t matter how badly they want what you have to offer. It’s a little unnatural to avoid calling people whom you’ve started to develop a relationship with, but it’s necessary if you want to make the best use of your time.

The fact of the matter is that this methodology applies whether you’re selling Enterprise software or dish detergent. Understanding the methodology behind the sales process is the key to being successful, no matter what it is that you’re actually selling or who you’re selling it to.

Do you have a favorite sales methodology that works for you? Leave a comment and let us know.

Sales reps are typically compensated by the volume of sales they make, not the “quality” of the customers they sell to.

6 Comments

  1. bizsugar.com on October 29, 2009 at 6:52 am

    How to Sell Enterprise Software…

    Selling software into the Enterprise space is a lot different than selling to small businesses because you typically need a sales rep to do it. Being successful requires that you follow good leads and ignore bad ones. This article explains a sales meth…



  2. visit on October 30, 2009 at 2:54 pm

    You are doing a wonderful thing here on the Internet. I wish you the very best. Kindest regards.



  3. […] This post was mentioned on Twitter by Henry Ho, Mike Taber. Mike Taber said: Published an article on how to sell enterprise software – http://bit.ly/PR75k […]



  4. uberVU - social comments on November 1, 2009 at 12:37 am

    Social comments and analytics for this post…

    This post was mentioned on Twitter by SingleFounder: Published an article on how to sell enterprise software – http://bit.ly/PR75k



  5. Duncan Murtagh on July 14, 2011 at 8:22 am

    Hi Mike,

    any further thoughts on this nearly 2 years on?

    Duncan



  6. Mike Taber on July 14, 2011 at 8:39 pm

    I have a few. Thinking back on this article, it’s clear that this is merely a way of reducing your sales funnel intentionally while categorizing the people you are hopefully cultivating into customers. The underlying problem is that you need to keep after these people because Enterprise sales is such a relationship driven business. That takes time and effort.

    You only have so much time to allocate to acquiring new customers, so this is an effective way to figure out which ones are worth paying attention to. The problem is that it doesn’t give any guidance on how to get people into the funnel in the first place, nor does it allow you time to follow up with customers after the sale has been closed.

    Most sales reps don’t have to worry about either of those problems, as they have a supporting cast which identifies the leads and lets the rep classify them.



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