For many early-stage start-ups, landing their first enterprise client is the holy grail. It is a sign of development, showing that the business has effectively transitioned from an R&D organization dependent on venture capital to an autonomous, long-lasting enterprise.
The contract negotiation is the last of several challenges you must clear up, including introductions, calls, meetings, follow-up emails, and demonstrations. You might feel anxious to finish it and go on with your tasks.
It is challenging and labor-intensive to develop a product that meets all the requirements of an enterprise organization. But as more business companies choose the SaaS (Software as a Service) path, now is a fantastic time to enter this industry.
Remember that deploying enterprise software can cost a company millions of dollars, so you must show that your product is worthwhile. Learn as much as possible about your clients, concentrate on addressing needs, and use customer feedback to help you adjust and advance. If you do everything properly, enterprise clients may grow to rely on your software and stick with you over the long term.
In this write-up, I will first explain what makes enterprise clients different and then take you through the all-important enterprise sales terminology that every B2B SaaS company should know. And finally, I will depict various steps to land your first enterprise client.
What makes enterprise clients different?
Enterprise clients can afford to hire the best of the best and want to do so. You need a compelling reputation, organized procedures, unambiguous communication, and effective project management to attract such clients.
When you land an enterprise client, you must be prepared to scale your business to meet their needs. You will not succeed in gaining business if you do not provide quality in every area. Enterprise clients can hire the top employees. You will have difficulty getting business attention if you are not seen as the greatest in your sector.
Startups are made to operate quickly and effectively. Systems and processes are continually being altered, deleted, and revised. I have discovered that a more measured approach works better with enterprise clientele.
When working with enterprise clients, you will need a well-developed procedure that can be pitched to VPs and CMOs (Chief Marketing Officer). A good generalization is to anticipate that whatever paperwork provided will end up on VPs’ desks. I have realized how crucial it is to maintain organized, professional, and simple to scan reports.
A report’s ability to stand independently can mean the difference between receiving funding and being let go. Another area where quality must stand out is in customer service. Continuous counseling is needed for enterprise clients.
We occasionally must present to their boss or team in addition to dealing with our point of contact within the organization. You will not succeed in gaining business if you do not provide quality in every area. Large enterprise clients operate in highly competitive marketplaces and sectors where it takes a lot of effort to make a difference.
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Important enterprise sales terminology that every B2B SaaS company should be aware of
Your new sales environment will only stabilize if specific conceptual pillars are provided. Some sales concepts can show founders are equally clueless, just as catchphrases show a salesperson knows nothing about business or engineering.
Here are some of the crucial enterprise sales words and expressions that every B2B SaaS company should be aware of:
Enterprise: A big company or business that employs hundreds or thousands of people.
Enterprise sales: Selling a good or service to an enterprise involves a lengthy sales cycle, numerous stakeholders, a lot of money, many risks, and a lot of complexity.
Lead: A potential client, either as an individual or company.
Positioning: A short outline of a product or service, the target market, and how it meets their needs.
Sales motion: A corporation’s method and strategies to market its goods.
Enterprise sales funnel: The steps taken or route taken to make a purchase.
Customer Lifetime Value (CLV): The entire sum of money that a client is anticipated to spend with your company during the course of their agreement with you.
Customer Acquisition Cost (CAC): The sum invested in acquiring a new client, typically through marketing and sales efforts.
Marketing Qualified Lead (MQL): A potential customer who has expressed interest in your goods and taken the first steps toward purchasing them.
Annual Contract Value (ACV): The typical annual cost of a client’s subscription.
Sales Qualified Lead (SQL): A lead that the sales team has identified as being prepared to be contacted and closed.
Vendor review: An evaluation an enterprise conducts to compare its vendor’s performance to key performance indicators (KPIs).
Sales cycle: The steps and time involved in selling a product to a consumer.
Now that you have a basic understanding of the enterprise sales terminology let us divert our attention to the business end of this write-up.
A step-by-step guide to landing your first enterprise client
Let us look at the various steps you would need as an organization to land your first enterprise client.
Examine the enterprise clients thoroughly in your industry
It is not about you if you want to land an enterprise client. You will undoubtedly lose the deal if you lose sight of that reality. According to Al Zia Pervaiz, this is the initial step in business prospecting.
Find an enterprise suitable for your product or service, just like when prospecting to SMBs or the mid-market. Avoid the urge only to target well-known brands or huge celebrities. Instead, make a list of criteria and compare your target organizations. Does it match?
Follow this list of criteria given below:
- Is the business adding more salespeople?
- Is the business growing in EMEA?
- Is the business utilizing a rival?
Remember that to succeed; you must assist your client in succeeding. This can help you attract that first, second, third, fourth, and fifth corporate client. How do you go about that? Study as much as possible about the client to ensure you are familiar with their goals, plans, and business operations.
Next, specify how your offering will assist them in achieving their objectives. Remember that you can demonstrate your capacity to offer a special solution if you can pinpoint their issue or suggest areas that could want development.
Create professional relationships with enterprise clients
Each of us has experienced encounters with pushy salespeople who begin droning on about the features and advantages of a product as they approach us. They do not even attempt to inquire about possible search terms.
It is even worse when marketing software solutions to a large enterprise than selling automobiles or windows. The first step in any sales process is establishing a rapport with the potential enterprise client. There are a few tried-and-true methods for carrying out that task:
Change your viewpoint: The last thing you should be thinking about is the product you offer. Instead, concentrate on the wants and issues of the company to whom you are selling (the customer). You will be better able to provide solutions the more you know about the client.
Promote a solution: Dealing with several stakeholders, each with their own wants and issues that need to be resolved, is a part of enterprise sales. You can create connections at all levels of the organization if you frame your strategy to offer solutions to every stakeholder.
Accept politics as it is: In enterprise sales, the buyer may never even touch your goods, while the users may not have much influence over the deal. To be successful, you will need to handle all of your customers’ teams’ interactions—some of which might not even get along well.
Find a leader: Finding someone inside your customer’s organization who can advocate for you is one of the best things you can do. This person should have some authority, be familiar with their purchase process, and most importantly, have a genuine interest in your product.
The next crucial stage is to share your vision of the future with them and how they get there after you have established a rapport with them and gained an understanding of their company and issues.
Acquire trust from enterprise clients
According to Karthik Manimozh, president, and COO (Chief Operating Officer) of 1-Page, “An enterprise client needs to be persuaded that cooperating with your company is the best option they can possibly make.” To let your reputation precede you is one of the best methods to assist them in coming to this conclusion.
Factors affecting purchasing decisions include your company’s market leadership, reputation, and visibility. Your ability to craft your tale will determine the solutions your potential corporate enterprise client needs. The cornerstone is effective PR and marketing. Two foundations are strategic networking and social proof.
Always keep in mind that acquiring trust requires effort. It takes more than just showing up at conferences to gain visibility.
Instead, set up a meet-up group at the conference, chat to people at every booth in the exhibit hall, volunteer to be a sponsor, go to the official networking events, mingle with other attendees as you check out of the hotel, and share a ride to the airport with other conference attendees.
Talk to everyone, and everywhere you are (but ensure your conversations are informative and upbeat…never desperate).
Your influence grows as you become more visible. Once you have done that, prospective enterprise clients will not question your ability to complete the task or meet their objectives. The topic will be “How can we work on a professional level?” instead.
Develop a partnership
Existing customers are significantly more important than new ones in almost every company. Existing customers are much less expensive to acquire and are much easier to market more goods and services to.
Because of this, your aim when gaining a new enterprise client should be to turn them into a long-term partner. However, you should begin to consider the relationship even before you make the first transaction. Business sales cycles are frequently lengthy—months or even years.
You can benefit from this long-term mindset by being the partner who is always there for your customer, responding to inquiries, and providing answers. Be prepared to offer direct client assistance. It is important to be persistent and patient. That is how you compete with more powerful, impatient rivals.
Keep going despite challenging times
Finding an enterprise client can take months or even longer than a year. Nothing worthwhile is simple to obtain. You will undoubtedly spend that time in numerous meetings, perhaps entangled in office politics or navigating hoops as the legal and procurement departments investigate your business. Be not alarmed. When attempting to acquire an enterprise client, this is standard practice.
According to Sam Odio, co-founder, and CEO (Chief Executive Officer) of Freshplum, “it’s not rare to have a 6-12 month sales cycle when selling to Fortune 500 firms, which may be very hard for a startup.” Remain focused, and do not let yourself (or your firm’s leadership) get disheartened.
Keep working as long as the client is interested in you; your efforts will be rewarded. Finding your first enterprise client is difficult, but few wonderful things in life ever are. Just keep in mind that it is a goal that you can achieve and that, when you do, your business will be changed forever.
Select the right enterprise
You probably can’t pick and choose too much because you are an early startup but have this in mind as you choose which leads to investing and where to concentrate your limited time and energy. It is far easier to negotiate with an early adopter or a business that has prioritized being on the cutting edge of technology than with an organization that sees innovation as a luxury.
Early adopters frequently negotiate with startups, giving them (and their in-house lawyers) a greater understanding of technology advancements and how they should be represented in the contract. Additionally, it implies that startups are a priority, which impacts the allocation of resources, timelines, and the internal pressure to close the sale.
Additionally, avoid choosing your first enterprise client from a highly regulated industry. If it is outside your core market, this includes the insurance, healthcare, banking, etc. industries. Suppose you are a startup in the insurance technology industry. In that case, you should not waste your time on an early adopter online retailer, but if you have the option to forego marketing to a regulated consumer initially, do so.
The risks you will be required to face with a regulated business will probably be higher, and they could result in liabilities you are not financially prepared to handle. Launching your product in one department within the company and expanding its adoption across the entire organization is another suggestion that fits into this category.
People who work for enterprises frequently anticipate their tools to be refined, with all the kinks and problems ironed out. They anticipate 24-hour phone support. They anticipate receiving assimilation services and having access to “how to” assistance.
Launching gradually and building a solid reputation for your product in one department is preferable before scaling up if you cannot contractually commit to this level of assistance.
Keep your intellectual property safe
I have not yet come across a template for a corporate SaaS that does not assign intellectual property in some way. One of the fundamental issues with supplier agreement forms is this. Every supplier is unique. They would not need two if they were. The first draught often contains unnecessary features to make the template as inclusive as possible.
For instance, while professional services are not often included in SaaS transactions, many enterprise SaaS templates by default include them, including the creation of new intellectual property. Additionally, even when specific developments are carried out, the idea behind them is frequently generalized and used by other clients.
You should refrain from assigning IP in whatever you build, assuming you are not in the business of outsourcing services and unless something is specifically suited to the integration requirements of a particular customer. If you assign any developments, you must ensure that the agreement expressly states whose intellectual property is assigned and that any other intellectual property included in the solution is yours.
The requirement to place the source code in escrow is another unintended consequence of this attempt at generalization. A large enterprise interested in using a startup’s product is overly concerned about its volatility and dependency on fundraising.
What would happen if the startup failed and stopped operating? What would happen if it was sold to a rival? It is possible that the service is no longer offered, or the business no longer wants to work with the startup.
This problem is attempted to be solved by the necessity to deposit the source code in escrow. Under certain conditions, the company can access the product’s source code for its own usage.
This makes sense for some services vital to a consumer, like payment processing to an online merchant. While other services might be extremely helpful, their unexpected disappearance will not be a deal breaker.
The value to the company may occasionally outweigh the danger to the startup disclosing its source code, its most valuable asset. However, if it is written properly, the danger might be much diminished; therefore, getting rid of it completely is not an option; it can be bargained to be acceptable.
Reduce the level of risk
First, realize that engaging with an enterprise inevitably involves some level of exposure. You will not be able to restrict your exposure to outside intellectual property claims to the contract’s worth, most certainly.
However, you want to make an effort to reduce your exposure so that you are only taking calculated risks. When you have little control over the risk or exposure, you should refrain from taking on an obligation.
Try to transfer obligations to the party that can best reduce them. And when you do accept liability, be fully aware of the risks you are taking so that you can take the appropriate steps to reduce the risk and exposure.
These include strengthening your protections against occurrence, buying insurance, or securing back-to-back indemnification if a service further down the supply chain is in a better position to do so.
If you decide to follow through on your regulatory obligations, do so. Do not chance to be unnoticed by your non-compliance. Working with huge corporations increases your danger of being investigated, especially regarding data security.
Any user who is concerned that his information will be processed by an unidentified small firm located halfway around the world can contact the regulator and request an audit.
Quickly adapt during mergers and acquisitions
The change of control provision is another clause that appears in many corporate supplier templates and is motivated by the same concern about startup instability. These clauses either restrict the supplier’s discretion in carrying out an M&A or provide the company the option to end the contract if such a transaction occurs. This might make sense in some circumstances, but keep in mind that a startup company’s greatest assets, after its intellectual property and, in some cases, its employees, are its paying customers.
As a result of the M&A transaction, the right of a customer or customers who contribute significantly to the revenue to terminate the agreement may have a major impact on the M&A valuation. It is advisable to attempt to restrict the use of this right to M&As where the acquiring entity is an organization’s rival.
Additionally, it should state that the business only has the authority to end the contract once an M&A closes, possibly in exchange for the source code’s release from escrow. This also applies to clauses restricting the assignment of the contract, as doing so would prevent the startup from completing an M&A through the sale of assets.
You will eventually have to market to enterprise customers if you develop a B2B service.
What does an enterprise customer purchase from you as a startup? To establish a feedback loop, you are advised to launch a product as soon as possible. However, this can result in a product not being ready for the enterprise client to utilize or view.
If they are interested, should you decline the meeting? Should you hold off and begin by testing with hundreds of smaller clients?
Consider your first enterprise client in the same way you would an angel or seed investor. They place just as much faith in you and the start-up as in the product. They conduct an internal examination and pose a straightforward query. So, when the chance to pitch your first enterprise client, put your trust in yourself the same way you have always done.
Dattatraya Shetty is an IT Professional with 2 Decades of experience in areas of Product Development, Implementation & Service Delivery Management. As the Head of Implementations and SOC Compliance in Smartkarrot he is on a mission to provide relishing customer experience.
Published September 01, 2022, Updated February 28, 2023