Many of you will at some point be faced with a board or executive team who want to get a slice of the juicy enterprise market after experiencing success in the mid-market. This article has some key takeaways on the pre-requisites for success from a sales org profile standpoint. I have assumed that your product is enterprise-ready and that you have determined relevance in this new segment.
Having the Right People in Place
The first thing to note about selling to enterprise is that you are now faced with a large, diverse stakeholder buying committee for any significant transaction, and this cannot be handled by a single account executive.
At the highest end, you may be responding to RFPs (request for proposals) which will require a formal bid management process and team. My time at Electronic Data Systems (EDS – HP Enterprise) exposed me to the most extreme end of enterprise sales resourcing. In competing for 5-10 year outsourcing agreements worth up to $2B, we applied dedicated bid teams to securing selection.
In one of my deals, I had 17 people dedicated to winning the RFP for 6 months!
For most of you, this will be a bit excessive, but at a minimum, you will need a Solution Architect/expert, an Account manager and an executive sponsor involved in your deal pursuit.
Have you considered the supporting cast needed to pursue enterprise?
It is worth expanding on the profile needed to run an enterprise deal also.
The Enterprise Sales Profile (ESP):
I love sharing the mistakes I have made in the hope that you can avoid them. In 2009, I promoted the top mid-market rep in my region to the enterprise team, making the common mistake that traits of success in mid-market equal success in the enterprise. Big mistake. He was wholly unsuccessful and ultimately left the organization only to return some years later to become a highly respected mid-market leader who is one of the best in his field.
Here are the competencies that you need in the enterprise AE profile that are not necessarily required in dealing with smaller organizations:
The ESP is the person who shows Boeing how they can win $152M more business, at a 3% higher margin through using new supply chain automation technology to reduce transportation costs. The standard sales rep merely sells them software to reduce costs by 10%.
With ESPs you have some percentage of $152M of value you can share in, without it you simply earn a slice of savings.
How Can ESPs Do This?
1. They have a solid understanding of the factors affecting the business
If you are selling to an enterprise like Boeing or Microsoft, then you need to take into account the fact that external factors like foreign policy (tariffs, sanctions, etc), exchange rates and international regulations (GDPR) are going to have a trickle-down impact on the department you are selling to. Understanding the impact of these externalities requires the account team to study investor communications and to be tuned into industry journals and related media to get ahead of what may be changing executive priorities.
Factors affecting decisions
External: At an enterprise level, macro-economic factors such as exchange rates and other macroeconomic variables can have a significant impact on investment decisions.
Corporate: Competition, labor issues, legislation and more will have different impacts at a corporate level depending on the industry.
Department: Each department will have a budget/project prioritization dictated by the corporate agenda. This agenda is exposed through foundational research of investor disclosures and corporate reporting.
If your organization is selling seven-figure deals and reps are targeting less than ten accounts per year, then I wonder if you have reps or SDRs doing this level of research?
“The golden rule is—an executive will meet with you only if they think that YOU KNOW something that THEY NEED to know, now.” – Matt Cameron
2. They have the toolkit to build the story
ESPs understand the language of business:
An MBA or >=undergraduate level finance education. They know ROE and ROA, whereas standard sales wouldn’t know ROS from their ARR(se).
Industry knowledge (customer, not vendor) either as a direct participant or as a studious associate. ESPs keep themselves up to date by subscribing to industry journals, maintaining an industry network and attending relevant conferences.
3. A high EQ: ESPs are solving non-obvious problems and creating novel solutions. Mental agility and ability to process inputs is a must.
4. Executive acumen: The hard truth is that an executive will delegate you down to the person you sound like. Your reps must be able to hold their own in any context.
5. Voracious curiosity: At their core, the ESP strives to become a trusted advisor. They seek to understand the executive imperatives and how to enable them: faster, better, cheaper. They want to identify an opportunity or issue that a customer can’t see. It is this thinking that is described by the ‘Challenger’ sales profile popularized by Gartner’s CEB division.
6. They are great leaders: An ESP needs to negotiate internally for resources in support of a deal and must motivate the team to give their best in securing the business. Enterprise deals are typified by late nights, big asks and stress. The ESP is the glue that holds the team together and ensures everyone is aligned and moving forward at the right pace.
Having the Right Processes
Deal pursuit approvals: If you are going to apply all these resources, then you better be sure that they are aptly targeting deals. At most enterprise sales organizations, large deal pursuits are approved by a deal review board who assess the $ cost of pursuit and give a thumbs up or down. Bid pursuits can quickly escalate into the hundreds of thousands of dollars in salary costs.
Bid management: When responding to enterprise tenders, a structured process to coordinate strategy and resources is required.
Proposal management plans are the glue that binds the people and process
A different profile of performance inspection and forecasting
In the mid-market and SMB worlds, we can create an activity focused and pipeline coverage oriented ‘reverse engineering’ approach to figure out where we are going to land. By analyzing win rates, sales cycles, average deal sizes and ‘activity to outcome’ ratios we can reliably predict where we will land and how to coach our salespeople.
Enterprise is a completely different kettle of fish. No longer can we rely on simply pipeline coverage or activity metrics to know whether we are going to make the number. In enterprise, it comes down to a deep inspection of individual deals to understand our true position on the account and the likelihood of it landing with a ‘per deal’ manual forecast. At EDS I would pursue 3 deals over an 18 month period with the plan of landing one of them. Pipeline coverage and activity is irrelevant in this context.
Are you asking your enterprise reps how many emails they sent last week?
An example of manual forecasting from InsightSquared’s forecasting capability is presented below:
A pre-requisite for this forecasting process is a documented sales methodology that is linked to a sales process with clearly defined exit criteria. For example, we don’t move to a proposal until we have identified the stakeholders, understand the competition and the customer has agreed to the definition of our value proposition.
Compensating the Troops
In enterprise sales there are two big differences to account for:
Long sales cycles require a higher base: By definition, enterprise account executives are experienced and therefore further along in terms of life events and financial commitments, which means that they need a base that ensures they aren’t distracted by financial pressures and yet are motivated by the large upside of winning the big deals. The very high base salaries of world-class enterprise reps are enough to give nose bleeds; sufficeth to say it is a discussion that needs to be had with your CFO. Low-balling on an enterprise base salary is a false economy because a great enterprise rep can change the course of a company. You will find that the first $1M deal you do is followed closely by several more but someone needs to figure out how to do it first.
You need to hire and fire well: Taking into account the above, it is VERY expensive both in terms of direct costs and opportunity costs of hiring poorly. If you don’t have a rigorous rubric for hiring enterprise reps, then you should bring in external assistance as this is not a set of hires you want to get wrong. Do not take a chance on your first enterprise hires—no ‘diamonds in the rough’. Proven A-players who are the CEOs of their territory are what you are looking for. That being said, you need to use your well-defined inspection process to rigorously assess the likelihood of success as your reps build momentum in their patch. We can’t afford to wait for a 9-18 month sales cycle to complete to figure out if they will be successful.
- Map out the enterprise buyer journey and determine the supporting functions needed to assist your AE.
- Tightly define what a true enterprise sales professional looks like for your industry.
- Design large bid processes that reflect the complexity of the sale.
- Create inspection processes that are contextually appropriate. We can’t manage an enterprise team as we would the mid-market.
- Secure executive buy-in to the investment needed for a truly world-class team and be uncompromising in the expectations of your new hires.