Want to sell to large organizations but don't know how to navigate the complex sales cycle? Closing enterprise deals can be a lucrative way of growing your SaaS business—or a long, treacherous process, leaving you with nothing to show for it. Steli shares the best time to start selling to the enterprise, how much to charge, why confidence is essential, and more so you can crush enterprise sales!
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Boom! All right, we’re officially recording this webinar, The Art of Enterprise Sales for Startups. This is going to be a really good one. I’m super excited about this, the crowd is totally international, you guys are awesome. It’s cool to see you logging in from all around the world, especially representing Europe really well.
Here’s what we’re going to do. I have about 40 minutes of content, teaching some of the biggest mistakes of enterprise sales and how to avoid them, best practices, I’ll share some heartbreaking stories from my own enterprise sales experience, and then we’re going to go into Q&A and we’re going to do a good, solid 30 minutes of Q&A, kind of answering all your questions about enterprise sales.
I want to make sure that you guys have my email address, it’s Steli@Close.io. If at any time you need to ask a question, you need an enterprise sales shrink, somebody to be your personal psychologist, your coach, shoot me an email. If you have a problem, if you want to send me a template, if you’re in the middle of negotiations, anything that’s super specialized where you need help and you don’t know how to fix something or you need advice, shoot me an email. If I can help, it’s my honor and pleasure.
Before I get started, I’ll give you a little bit about my background. I’ll make this super short and tight and then we’re going to jump right into the content of this. As I said before, as you guys come up with questions, make sure to just put them in chat and I’ll either respond in real time or we’re going to kind of have a nice little backlog so when we start Q&A, we can rock and roll right on and start answering questions, create a lot of value for you guys.
All right, my background, obviously grew up in Germany, although I am originally from Greece, so I am as European as you can be. Dropped out of high school when I was 17, 18, started my first business and have been running my own businesses ever since.
I’ve done a few smaller companies back in Europe, all in the end consumer space, so no B2B, to be honest, and never really building any technology or product myself.
But then nine years ago, I sold everything I had, I bought a one-way ticket to San Francisco and I did my first startup here in Silicon Valley, where I now live. I have two little baby boys, so I have my family here.
That first startup actually went through a lot of twists and turns and one of those twists and turns was going into enterprise sales, and I’ll share some heartbreaking stories about that.
After accepting soul-crushing defeat with that first business that I was running for five years here in Silicon Valley, I started a second company, which is what I’m running very successfully today. To give you context on that business, let me tell you a few words about it.
That company started as a business called ElasticSales. What we did with ElasticSales was very simple. We offered B2B startups in Silicon Valley an outsourced a sales team on demand, which meant that we developed sales models and we created predictable and scalable sales models and then scaled them for venture-backed B2B startups in the Valley. We did that for over 200 venture-backed startups.
During that time, we’ve amassed an insane amount of just know-how and experience when it comes to generating and developing sales models for startups. I would say about half of the sales that we did, so about a hundred companies, we did sales kind of in the large organizational field, enterprise sales, we had to deal with selling to very large organizations and we learned a ton about it and a lot of those lessons learned, a lot of that know-how influenced the webinar today and the presentation that I’m going to give and the answers that I’m going to give.
So know that the stuff that I’ve learned about enterprise sales, none of that comes from books, none of them comes from a corporate career, which might be good or bad, I never had a corporate career, I never had a job in my life, not a real one.
All of my experience in enterprise sales comes from selling to the enterprise from a startup perspective and doing that for many, many different startups.
As part of ElasticSales, we built a little piece of software to allow our salespeople to kind of outperform other salespeople and that software turned into a product called Close.io. Close.io is an inside sales CRM, which means we are a CRM that’s very much focused on companies that sell through the phone and email. We built the best inside sales CRM on the planet right now. We have the strongest email and phone integration there is, we have probably the most intuitive CRM interface, it’s very fast, it’s very simple to learn.
We have a bunch of other things that are amazing about us, but most amazingly, we’re being used by thousands of salespeople every day around the world, many of them in Europe, by the way, and we’re highly profitable, growing really, really fast into double-digit numbers month to month.
With Close.io, our core audience of buyers are startups in technology companies that are doing B2B sales and again, I would say about 50% of our customers are selling to the enterprise, so they’re utilizing Close.io to sell to the enterprise.
We’re just surrounded by people doing enterprise sales. We’ve done it ourselves, we’re serving customers that are doing it every day, so that’s how we’ve learned about it and that’s why we care about it.
Listen to The Startup Chat
All right, that’s enough about the background. One last little plug for you guys, if you haven’t done it yet, make sure to go to TheStartupChat.com, it’s a biweekly podcast, Tuesday and Fridays, each for 20 minutes, we release new episodes. It’s myself and Hiten Shah. Hiten is the founder of Crazy Egg and KISSmetrics. Hiten is probably the smartest marketing brain in startups on the planet right now, so he’s kind of the marketing guru, I’m considered to be a sales guru, and the two of us talk about all kinds of weird, whacky stuff but also highly technical stuff.
If you like the content here and you want to listen in on two very experienced CEOs talking about startups, tactics, strategy, struggles, tune in and make sure to check it out.
How I almost closed Google, Intuit, Oracle ...
All righty, let’s start with my first heartbreaking enterprise story that I want to share with you guys.
I mentioned that nine years ago I came to Silicon Valley and I wanted to start my first tech startup. That company, I felt would change the world and change humanity as it is and would be my legacy and the reason why I exist. I felt very, very strongly about that company.
So what we did, just to give you some context, is that we built an educational online platform that basically allowed anyone and everyone to create online classes, generate demand for those online classes, and then give them, quite like this one, like virtually, but in real time, so it would be like virtual classrooms where you could see the teacher, they could share a whiteboard or a spreadsheet or PowerPoint presentation or whatever else, do Q&A, interact with people, have quizzes and tests, and all of it would be recorded and stored so people could access through a library of all these classes. The idea was to build kind of a global-scaled school that empowers everybody to teach everyone.
We started in the end consumer world and went through a lot of twists and turns in trying to figure out how to grow this damn thing and as we were happily failing in the end consumer space, we got approached by Google. Specifically by a senior director at Google that was responsible for all of Google’s internal education, especially engineering education. So she was responsible, she was an ex-Stanford professor and she was now a senior director at Google responsible for engineering education at Google. She saw our platform and fell madly in love with us. She approached us and said, “I absolutely want to have this technology internally at Google and empower my engineering employees to teach and study from each other in this fashion.”
When they first approached us, I was not that excited about it. I was a little hesitant, so I was like, “Oh, enterprise sales…” We were totally underfunded—to give you some more context—at that point, the entire company, the entire startup is two people, myself and one engineer. I’m paying everything out of my own pocket, so I’m paying the salary for the engineer, the service, everything that we—all our marketing, all of it comes from my own pocket and my own savings. I don’t even have a visa at that point in the US, I’m still trying to find my apartment. I’m a mess, right? Our startup is like super underfunded, we have zero experience in enterprise sales, here we get approached by Google.
On the one hand, I’m like, “Do we really want to do this? Is this going to be a distraction? Are we too small? Is the sales cycle going to be too long?” But on the other hand, it’s fucking Google, right? The senior director there loves it and it’s such an appealing little offering that I’m like, “Okay, I’m going to take a meeting and see what happens.”
That’s what I did, so I take the meeting and she tells me how awesome everything is and how much Google wants to use this product and I started to sell myself on the idea, to say, “Maybe…maybe what we’ll do is we’ll go kind of the open source route of offering our product for free to the end consumer space and then we’re going to be charging the enterprise. Maybe the enterprise is going to be the business model for this.”
I decide to sell it to Google and what we do with Google is we sell them on our pilot, they have to pay us, I think at that point it was like $5,000 a month for 3 months, run a pilot and if that pilot worked out well, it would be a 6-figure contract afterwards.
I take that little victory and I think, okay, if this is the new strategy of the business, let me go out there and try to meet with as many enterprise companies in Silicon Valley and see if I can successfully sell this to other companies as well.
That’s what I do and within two months, I have met with all of the large organizations in Silicon Valley and even more importantly, I have gotten Google on a pilot, Intuit on a pilot, Oracle on a pilot, and my pipeline has Symantec, SAP, like the list goes on and on and on. All these amazing companies all lined up for a pilot.
I’m thinking to myself, ha! Enterprise sales, that shit is easy! Easy! I can do it all on my own, we’re a two-person startup and we’re like crushing it in enterprise sales.
Well, 12 months later, Google didn’t pan out, Intuit didn’t pan out, Oracle didn’t pan out. We were at the brink of bankruptcy. Here’s what had happened in those 12 months: We had no fucking clue about enterprise sales so we made a lot of mistakes. I was good at selling, like I knew how to get them interested, but I was horrible at making sure that the sale was successful.
Here’s what happened in each of those cases: At Google, we had the senior director loving it, but what happened was, we thought, “Here’s the technology, we build it, we’ll sell it to you and then you guys run the pilot internally. You are Google, you know how to use this and you know how to run a pilot”—obviously a bad idea.
What ended up happening is that senior director of engineering had pushed down to a junior project manager this pilot and that junior project manager, I never took the time to sell her on this. I never took the time to support her and I never micromanaged the pilot and that was the massive mistake. What had happened is, we sold everybody at Google, they loved it, we were excited, we gave them the technology, we started charging them, and then the top director pushed it down to a manager and the manager pushed the project and the pilot down to a junior project manager. That junior project manager was never sold on why this pilot would be important to her career, why this pilot was important or good and she didn’t really care and she did a terrible job running the pilot. We did an insanely terrible job supporting her and making sure that a. we sell her, but also we help her succeed. We were totally hands off.
What ended up happening is, they ran a three-month pilot where they did a terrible job sending just one stupid email to people, letting them know about it, sent on a Friday afternoon—like just everything about the pilot was a catastrophe, the communication internally, their goals, their KPIs. After three months, they were like, “Oh, we were so excited about this, but it didn’t work out, so we won’t buy.”
We were totally shocked by that, showing and displaying how clueless I was back then. None of you guys would make this mistake, but we did. We thought, we sold the pilot, now they’re going to run this pilot successfully internally and then we’re going to take it from there.
No, when you sell a pilot to the enterprise, you need to make sure, you need to triple, not just double-down, and make sure that pilot is truly successful. We never did that and we never took the time to sell everybody in that company, we only sold to the most senior person and we thought, well, if the senior director says this is good, all the other people will love it and will see that it’s important—wrong.
That’s how the Google deal didn’t work out. The Intuit deal—I’m not going to go into too much detail there, some internal politics, some bullshit that made that not work out. The Oracle deal was the most painful one, because the Oracle one was the biggest in terms of dollar value. The Oracle deal was also the one that took the longest to even start the pilot. I had to sell a manager, a director, senior director, all the way up to senior vice president at Oracle, the person that was in the running to be the next CEO at Oracle and was reporting directly to Larry Ellison. I get everybody bought in on the pilot, we start the pilot, this would be a multimillion-dollar deal, we bank all our resources—and again, reminding you, this is with two people, so we’re working on this fucking deal for months and months and months and we’re just two people!
Then at some point we’re just a few weeks away from closing the deal and all my emails start to bounce. What happened was that the entire Oracle structure that I was selling into left Oracle. Yep, you heard it right! Everybody, the senior vice president left Oracle to become CEO at another tech company and with him, he took the director that I knew, the manager I knew—everybody I knew left with the senior vice president into the new company. All of a sudden I knew nobody anymore at Oracle, all my emails bounced.
It’s safe to say that at Oracle my fucking pilot was not a priority anymore. That was a soul-crushing defeat. It took me just a few weeks to get Google, Intuit, Oracle, and a bunch of other big companies to agree to a pilot and get excited about buying our product—that seems like a lot of validation, that seems like success is just around the corner and it’s very impressive thinking that—back then I was like a 24-year-old Greek kid with a heavy accent and not any experience at enterprise sales and we’re just two people with no funding. All that sounds impressive, but then a year later we had nothing to show for it.
I tell you that story for a number of reasons; number one, to show some humbleness and not just be the expert here that knows everything, but tell you that I had to pay a high price to learn a lot of the lessons that I’m going to share with you today. So that’s one reason.
The other reason is to show that enterprise sales can be an insanely profitable way to grow your business. It can be a beautiful way to run your company, but you need to know what you’re getting yourself into, you need to know the rules because if you don’t, you’ll have to pay and it’s going to be soul crushing, I guarantee you that.
I don’t want to start off with too much inspiration or motivation. If you’re still here, if you can survive the pain of that story, then you deserve some of the lessons learned.
Making exceptions = dangerous distraction trap
But I’m not done yet with some painful stories. Let me tell you a slightly potentially painful story from a friend and share a lesson there that I think is really important for people to hear. That’s the story of making exceptions in the enterprise world and how dangerous it can be, even if it’s profitable, to take distractions.
Here’s the scenario: A friend of mine runs a technology startup, he’s working on these pilots that he’s trying to put together. He has this internal champion at a very large company, that internal champion loves what they do.
Do you see the pattern? I’m just pointing out the pattern, like the senior person really loves what they do? All right.
What happens next is that senior dude is telling them they have to fly in, it’s a four-hour flight to the headquarters of the business, fly in and make a presentation in front of all the staff to see if they can sell them on buying the product.
So my friend gets on a plane, they fly over there, spend a few days, they prepare the whole thing, they’re really focused, they go in, they make the presentation and it turns out that that internal champion didn’t really prepare that meeting well. There were a bunch of people that didn’t show up, the people that showed up seemed very unprepared, very disinterested. The whole meeting ended up kind of a catastrophe.
They fly back and that internal champion sends them an email, apologizes profusely that it didn’t go well and that they won’t be able to buy. They go, “All right, that’s fine, it’s the price of doing business.”
A week later they get another email from that internal champion and he says, “All right, I have great news, here’s a way for me to make this right again. I have $25,000 left in my yearly annual budget. I need to spend that money somehow. I know that your product is a lot more expensive than that and I would need a lot of approval to actually use your technology for a variety of reasons. But here’s a tiny, little project that I have that maybe you guys can build for me and then I can give you those $25,000, you can then use us as a pilot customer and a customer to get more customers and we can start our relationship slowly and maybe next year buy your main technology.”
My friend called me right after that and was like, “What should I do? We don’t want to really build this little thing, it’s not part of our roadmap, but at $25,000, it would be our first customer,” yada, yada, yada, like thinking about all the reasons why to do it.
Here are the questions that I asked my friend: Number one is, are you sure you never want to build these features or this product? Is this really not part of the roadmap? My friend was like, “Yes, it’s not part of the roadmap.” My advice then was, “Then don’t do it.”
There are a number of reasons for that. Number one, do you really trust this internal champion? Seems like that guy doesn’t have his shit together, seems like the guy did a terrible job setting up your meeting, so to me, that means, what tells us that he’s not going to do a terrible job putting together this project, telling us that he’s not going to do a terrible job paying us, do a terrible job implementing this little product and getting success and then doing a terrible job getting you the other sale that you really want to have? Do you really trust this person? Do you really want to get into a relationship with him, in specific? That’s number one.
Number two, if you get a customer, you tell other people, “Hey, we already have a customer,” they will want to talk to that customer as a reference. If they want to talk to that customer as a reference, if they talk to that dude, is that going to be a good thing, because that dude is going to say, “Oh, no, no, no, we didn’t buy the real thing, the thing that you’re thinking of buying, I bought a small tiny thing, I had them built this custom thing for me.” Is that really the type of reference you need to close more customers right now? Probably not.
Believe me, $25,000 sounds good, but if you have to build something that you are going to in effect throw away afterwards because it has no place in your strategic product roadmap, you’re fucking wasting your time. You could go out there and do web development and create websites for people and charge $25-50,000 and have a much easier life doing that than selling this new product into this complex enterprise structure.
I want to make sure that when you do enterprise sales, yes, sometimes you have—not sometimes, most of the time they will want you to bend and do some customization and do some things that are not quite yet part of the roadmap. You need to be very careful what exceptions you make because what I see again and again and again is a deadly sin in enterprise sales, is companies, especially startups, making these “exceptions” that end up completely altering the path of where you’re going and with that altering, your ultimate destination as a business, and a lot of times not a good destination.
When you make exceptions, make sure they are exceptions that make sense. Oh, yeah, this is doing something today versus in three months, but still something that’s on our roadmap. Yes, this is something where we’re selling into the enterprise and it’s something that will be a good reference to us. Yes, this makes sense because we know how to do this well and fast. It just needs to make sense on all levels.
Don’t take just a little bit of money to do something you really don’t want to do because you feel like this might be a hack to get your first customer. That’s a very, very dangerous thing in the enterprise.
All right, this is enough horror stories or warning stories from my side. Now we’re going to go into more tactical stuff. As I said before, make sure you put in chat all your questions so when we get to the Q&A section, we can rock and roll and I can bang out as much valuable answers as I can per minute.
All right, so a few thoughts on enterprise sales.
First is, do you really need to do enterprise sales right the fuck now? I understand that some technology, some products, especially the people on this webinar, you need to and want to sell to the enterprise, to large organizations. That makes perfect sense, but my question to you is: Do you need to start there?
Too many startups want to start with their end game. They have this big vision of where they want to be and they want to get to that in one giant leap. The reality is that most successful startups make a million tiny steps until they arrive at finally the overall vision and the final destination where they wanted to be four years ago when they started. It’s not typically like in one big step execution, that’s usually not how it works out.
The reason for that is momentum is so fucking important. Momentum is important because it influences everything. It will influence your own internal morale, team morale, it will influence your ability to recruit top talent, it will influence you getting investors, it will influence you getting press, all good things that need to happen to you as a start up will happen because you have momentum. If you lack momentum, this is going to be a very, very hard battle to fight.
The problem with enterprise sales is that it takes very, very long. If you start in enterprise sales and your sales cycles are three years, that means for three years you have zero things to show for. Yes, you can say, “We have lots of new meetings, we have things in the pipeline, we have ‘excitement’ in the market,” but you don’t have any real traction, so there’s always going to be doubt. The longer it takes for you to close deals, the more doubt there’s going to be and doubt is a killer for startups.
My question to you is: Is it possible to start smaller and move up market? Can you start selling to slightly small organizations that you like too? Can you make them successful today and then as you create more and more of these success studies, even if it’s in the smaller enterprise or SMB world, you’re gradually, as your resources grow, your revenues grow, your team grows, your brand grows, your technology grows, you’re able to service and growing in bigger and bigger customers.
A lot of times I see companies succeed with that strategy a lot better than when they want to do, like we are two people and we have zero funding and tomorrow we’re going to sell to IBM a $10 million contract. That’s typically too big of a step to take.
That’s just something to throw out there and in some cases, for some of you, you can’t. The only customer that can benefit from what you do is very, very, very large organizations. But for more than half of you, I guarantee you could sell to slightly smaller customers today and I would think about this strategically if this is not a much better step, because you can close customers every three or every six or every nine months versus every three years and you can get a number of customers while you’re talking to these large enterprise customers, it’s going to be a very healthy thing for you internally, for your company, your investors, press, and even for these enterprise customers, to see that you have that confidence of having successful customers, even if they are a bit smaller than they are.
Keep momentum in mind, it’s a very, very important companion to your startup.
Pricing—charge a lot
The other thing, let’s talk briefly about pricing. Charge a ton of money! No exceptions to this, please. Here’s a mistake that I see, a vital mistake that I see a lot of startups make is, you think—people come to me all the time, “Hey, Steli, we finally have our first customer.” I go, “Awesome, how much are they paying you?” The answer is, “Well, they’re not yet technically paying with money.” I’m like, “Oh, then you don’t have a customer yet. Then they’re a prospect or they’re a pilot, they’re a user, but they’re not a customer.”
A customer implies that there’s money that’s being exchanged. If you take money away, there’s no such thing as somebody being a customer. It’s a very important distinction.
Don’t make that mistake in the enterprise world. The way that you need to think about pricing is that pricing is not just a function of your cost of goods plus some margin on top of it. Pricing is a lot more than that. Pricing is branding. Pricing is positioning in the market. Pricing is not just what did it cost us to do this, to offer this service or product and what kind of a margin do we need?
Especially in the enterprise world, the cheaper you are, the less perceived the value that you’re creating. If you offer something to the enterprise, it should create a ton of value, that’s why you should charge a ton of money.
If you’re selling to the enterprise and all the value you create is a few hundred dollars a month, like you’re dead. You’re dead in the water. You need to be creating hundreds of thousands, if not millions and millions in value. If you create millions in value to the customer, if they’re using your technology or product, then you need to be able to charge—if you offer them millions, you need to charge hundreds of thousands. You need to charge based on the value you create and the perceived value you offer and not based on your cost of goods or your cost to create the product or technology or the service.
You need to know that if you sell something to the enterprise world and it’s super cheap, they will have doubts. It might make it harder for them to buy than if it’s a bit more expensive. There’s all kind of rules to this game. You need to learn these rules, depending on your market and your customer, they might have certain budget constraints, certain amounts of money where somebody can make a decision without needing any approval, so a lot of companies in the US, they might have like a 5K credit card budget, so a decision maker, even on a lower level in the enterprise, might be able to buy your product for $4,999 without needing any approval. If you know that, you might want to charge $4,999 per month or for a pilot or something like that, just to make the sales cycle a lot faster.
But if that type of scenario doesn’t exist, if you don’t know what is the budget or what are the decision-making chains and approval chains and what are the numbers associated with that, in that scenario, if I sell to somebody that has a 5K budget limit on their credit card, it doesn’t make a difference if it’s $5,001 dollar or if it’s then $500,000, they have to go through the same fucking process. So I need for you to realize that.
If you don’t know those rules, you think, “Oh, we made it really cheap, we offered it for $6,000,” and you’re shooting yourself in the foot. Instead of making it $4,999 and making it a really easy, fast decision, you made it just above the budget line, the credit card line and now to that buyer, it doesn’t matter if it’s $6,000 or if it was $60,000, they have to go through the same buying process and it might even be harder to get this through a $6,000 line because it’s such a small thing and all the chain of approval might look at this and go, “Why do we have to approve this tiny, little thing? Is this really a serious company?” Because in the enterprise world, very cheap is also always associated with like, “Is this serious? Is this some small business? Is this reliable? Is this secure? Should we really buy this thing that’s super, super cheap?”
Be aware that if you’re too cheap, it might have negative connotations, not positive connotations. This is the enterprise, not some kind of end consumer discounter or something like that.
Marketing and asking, I say that the cheaper you are, the less the perceived value that you’re creating. You need to be aware of that and you need to be careful with making—a lot of times we think in end consumer world and we think the cheaper we are, the easier the decision is going to be. That’s not true in the enterprise. Charge and charge a good amount of money.
Also, you need to remember and understand that you need to account for massive discount because at some point in the negotiation life with that enterprise client, they will want a discount. If you charge very cheaply to begin with and you add a massive discount, you have nothing left and it makes no sense for you to do all this work for nothing. Enterprise sales is going to be a lot more work than you think, no matter what they tell you.
Small is beautiful: Embrace being a startup
All right, here’s another thing that you need to be careful about and that is lacking confidence. A lot of startups that sell to the enterprise, they are self-conscious about being a startup. They go into these massive headquarters and they sell to these massive brands and psychologically they think, “Oh, we’re just this tiny little startup with a few people and almost no funding and this is Coca-Cola or IBM or whatever, BMW, and they are massive and they could make our company successful and they could change our lives and we are nothing!”
If you come into the conversation with that frame of mine, you’re going to lose the deal. You’re not going to be able to exude the level of confidence and clarity and comfort that you need and that is crucial to make large customers comfortable and confident in your solution, your company.
Small is beautiful! You need to embrace that. Before you go into enterprise meetings, you need to stand in front of a mirror and go, “Small is beautiful!” Like 20 times. You need to feel great and embrace that you are a startup. Here are some benefits of being a startup and the value that you’re bringing to the table:
Number one, if they are meeting with you, it means that you are potentially providing value to them. It means that you are worthy of that meeting. If you were so small and so irrelevant, why are they meeting with you? They’re meeting with you, they’re sitting with you at the table because you have something to offer, don’t forget that.
You are a startup, which means that you are moving a million times faster than them. You built technology that yes, in theory they might have the resources to build, but they don’t have the resourcefulness to build. They don’t have the talent, the passion, the creativity. They are lacking all these things, that’s why you’re at the table.
You’ve probably become a world expert in this niche, niche, niche little, tiny little, very specific problem or technology and you know a lot more about that then they do. Remember that, you are an expert in this field. You are fast and you are bringing a ton to the table when it comes to innovation and creativity. When it comes to cutting edge like technologies and methodologies and all of these things, this massive business sucks and that’s why they’re at the table with you.
Not just that, when they buy from you, they’re going to get the attention of the cofounders, the CEO, they’re going to get more attention than they would ever get buying from any other large company and they’re going to get high-quality attention, the attention of the founders. That is worth a lot. Never forget that.
Go into these meetings with confidence, go into these meetings knowing that they need you as much as you need them.
Now, they’ve cultivated the culture of communicating to you that you are worthless and small, that’s basically part of why they have these massive headquarters, is you come in and you feel small. They exude this big persona and brand and importance and they will use that to their advantage, it’s their job to do that, their responsibility to seem like they are huge and you’re not important. Don’t buy into that bullshit. It’s very important. If you buy into that bullshit, you’re dead. You’re dead. They’re going to squeeze every little penny out of you, they’re going to squeeze everything out of you until there’s nothing left and you’re going to be a dead startup.
If you want to succeed in enterprise sales, you need confidence. You need to understand that you’re bringing a lot to the table and you need to protect yourself from all those little suggestions that they’re throwing your way, which is, “We’re big, you need us more than we need you, and you need to do everything we want or this deal will not happen.” Don’t buy into that, it’s bullshit.
You are selling to people
I’ve talked about this many times before, but it’s important and bears repeating. You are always selling to people. There’s no such thing as “enterprise sales.” There is no enterprise buying anything, the logo of IBM is not going over there and handing out a credit card and purchasing something, it’s always people, it’s always Bob at IBM, Mary at IBM, Linda at IBM, human beings that are making buying decisions, never a corporation or a massive organization. It’s always a collection of humans.
To know that means to know that you always have to sell to the human first. You need to understand not just what does IBM need and why is this good for IBM, but why is this great for Bob? How is this going to make Bob’s career better? How is this going to help accomplish Bob’s goals and dreams in life? You need to understand that shit and that’s also part of why enterprise sales is harder is because selling to one human is difficult with all our fucking emotions and doubts and all the craziness that’s going on in ourselves, but then selling to a roomful or a department full of humans, it’s just a lot more complex.
You need to keep that in mind and you need to understand that you might have to sell to multiple people on multiple levels all in different ways. You can’t just have one pitch that is like: Here’s why IBM will benefit from our technology. You need to understand that you need to sell on three levels.
3 levels of sales
You need to sell to the person first and foremost, and most importantly. Then you need to sell to their team or department, their group, their tribe within the organization. Only then do you sell to the overall abstract of the company organization.
You need to have a pitch that says, “Here’s why Bob, the director of technology or the director of engineering, here’s how our technology is going to help you, Bob, with your career,” and then you find Linda and you’re like, Linda, the person from human resources. “Here’s why, Linda, why our technology is going to help your job and your career and what you want.” Then you go to Tom and you’re like, “Tom, here’s how on the security level of our technology is going to be good for you.” You sell to these humans individually and then you always sell them, why is this going to be good for you, why is this going to be good for the department or the team that you’re working and operating in, and how is this going to be great for the overall company?
That’s, by the way, one of the reasons why there used to be this saying of like, “strippers and steaks,” or “wine and dine,” whatever you want to call it. It’s the manifestation of enterprise sales. A lot of times it had to do with you socially spending tons of money, spending “quality time” with your prospects. The reason is not that these people, if you go golfing with them they’re going to fucking go, “Oh, golfing, that means I’m going to spend—because we had a good time golfing together, I’m going to spend $10 million buying this technology.” That’s not the reason why these deals get done on golf courses.
The reason why these deals get done on golf courses is that why we’re playing golf, we have a comfortable social setting, you can open up and let me know about your internal politics, your goals, your family, your incentives, your struggles, and all that information, if I understand the internal struggles and politics and the internal structure of the company, I know how to sell effectively. I know how to sell to you, to your department, and to your company. To get that knowledge is really, really valuable, it takes some time, takes some setting up. That’s why people used to spend a lot of time in those enterprise deals because they need to learn all these things.
Always remember that you need to sell to the person first and always remember that you can’t just come in there as a startup and go, “This is going to be great for IBM.” It doesn’t matter if it’s not great for Mary. It needs to be great for her first before it can be great for IBM, so keep that in mind.
With that being said, not just are we selling to human beings, but you need to be selling to every human being associated with that company, everyone. Never, ever stop, ever. I don’t care who it is, the receptionist, the cleaning lady in the toilet, I don’t care. You sell to everyone. Everyone you meet that’s part of that organization, you go, “Hey, my name is Linda and here’s what we do with our company, where’s why it’s going to be great for you, great for the overall team and department, great for the overall business.” You sell everyone.
A lot of times people think when they get buy-in from a very, very high level, like I told you with the senior director or sometimes even when the CEO says, “We need to buy this, this is going to be important for us,” inexperienced startups think, “Oh, shit, if the CEO says they’re going to buy this, it’s a done deal.” Well, no, it’s not. The higher up the chain you get the buy in, the less it probably means. Eventually it has to be pushed down to the person that will have to do the work and if she is not excited about this, if she is not sold on it, she will make sure that it becomes a failure. Once it becomes a failure, you’re out again.
So it doesn’t matter if it’s an intern or whoever it is, everybody is important, get everyone’s buy in. You might be selling in a room, presenting with all these senior people and you might be thinking they’re all loving it and this deal will come through and there’s a little, some kind of an intern and she sits in the back of the room and you never pay attention because she was just responsible for bringing the waters and setting up the projector for your presentation. You think, oh, this intern is surely not important.
Then you leave the room and the VP’s discuss this and then they turn around and they tell the intern, “All right, do us a favor, do some market research and find all competitors and all alternative offerings to this technology and do it a little nice little competitive landscape matrix so we can decide if we should buy this solution or somebody else’s solution.” Then your future lies in the hands of that intern and you never paid attention to that intern, you never cared, you might have not been as nice as you should be and that will show because that intern will go out and find a competitor they like better than you and they will recommend that one and all of a sudden that competitor is presenting in front of all the room. They don’t just have the buy in and excitement of the VPs, but they also have the excitement and buy in from the intern, so they get the deal, because they have all the humans on their side.
Never underestimate the power of selling everyone. If you do enterprise sales, that’s what you’re signing up for. Don’t tell me, “Oh, but it’s exhausting, I can’t just always selling everybody.” Well, then don’t do enterprise sales.
If you want to succeed in enterprise sales, everyone that works in that company, everybody that’s even close to that company in one way or another, you need to sell.
Trust trumps transactions
Trust is very, very important in the enterprise. Part of the reason why it’s so important in the enterprise, when you sell to large negotiations, is that people are very, very—well, number one, a lot more money is on the table. These bigger brands have a lot more to lose. But it’s also so important because people’s careers are on the line and that’s what people truly care about. Bob and Mary care mostly about their own career, more than anything else.
If they can do something that’s good for their career and good for the business, awesome. But if they do something that’s great for their career and not so great for the business, they might still do it, because they care—more often than not, they do care about their career. With that, they care about safety, that’s why they work at very large organizations, they care about not getting fired, not making massive—committing massive, massive mistakes. You need to reassure that you are addressing that point.
Crystal, by the way, awesome question. I will address it in the Q&A later on. For everybody else out there, as you have questions, make sure to put them in the chat. I see them and I will go through them one by one in the Q&A session.
All right, you need to build trust, and trust will trump any kind of transaction that you can make at any point.
Trust works on a very similar level than I described before in the sense that you don’t understand that you have to create trust not just for your overall business or for your technology, you need to create trust on the first level, on a personal level, like here’s why I am trustworthy. Then you create trust for your product or technology. Here’s why you should trust in the technology or product that we’ve built and then on the business level, here’s why you should trust the overall company that we have.
You need to make sure that you sell them on all three levels, that people feel you’re trustworthy, they can trust in the technology and product you built, and they can trust overall in the business that you’re building or the startup that you’ve created.
If you create trust on all three levels, they’re going to feel comfortable and only then can they make a buying decision.
Longer negotiation = less effective negotiation
Here’s the cardinal rule of negotiation and with enterprise sales, you will always have to negotiate. The longer you negotiate, the less effective you become at negotiation, it’s just a simple rule. It’s like gravity, there’s no escaping this. It doesn’t matter if you are a black belt negotiator, it doesn’t matter if you write books about negotiation. I do write a lot about negotiation, I give keynote speeches around the world about negotiation and this rule still applies to me.
The longer I work on a deal, the longer I spent on the deal, the more invested I am in the success of the deal. The more invested I am in making a deal happen, the less effective I am in negotiating. Negotiating is the art of figuring out how to create value for both parties, but also the art of setting a price that will make you walk away. You need to know what you’re ready to give and what you need to take. There needs to be some very clear rules and to be effective in negotiation, you need to be willing to lose in order to win.
Negotiation is very much a game that you need to play to win, but to play to win, you need to be ready to lose, you need to go all out and take some risk and be ready to lose. The longer you work on something, the less you’re ready or open to losing, it’s just as simple as that.
Here’s how large organizations are super effective at negotiation and here’s how you can mimic that as a small startup:
Large organizations a lot of times are great in negotiation because they’ve compartmentalized the buying process. At the beginning you have a champion and that person is really interested in your product. The more time you spend with that champion, the more that champion and you are getting invested in wanting to make this deal happen. That’s awesome.
The problem is that after a few months of you working with that person, maybe running a pilot, that person is now pushing off the buying decision to another department, let’s say legal. Legal has never heard of you, has not spent any time on you and does not care at all about this deal. You’ve now spent three months, you’ve poured in your blood, your sweat, your tears, your money, your resources and now you’re talking to somebody you’ve never talked to before and that person doesn’t care. That person will squeeze as much as they can out of you and you know what? At that point you’ve invested so much that you’re going to go, “All right, I’ll give them this one little more thing.” “Okay, I’ll say yes to this one little clause.” “Okay, we’ll make this one little exception,” because you really want this deal to happen.
Then once they push you through the legal department, they’re now going to push you through procurement and procurement, again, you start fresh with another person that doesn’t know you. Now you’ve made all these commitments, all these compromises, and now you even more this deal to happen and you have somebody else, again, that does not care about you.
Because they hand you from person to person to person, from department to department, they squeeze more and more and more out of you. Usually at the beginning of the relationship with an enterprise client, they just go, “Oh, everything is great, we love everything, we need no changes,” and at the end of the deal it’s like, “We need you to change everything, we need you to regroup your product roadmap, we need you to change all your contracts, we need to change your pricing, we need you to change the people that work at your company and we need to change your logo and name.”
It’s so funny, it always starts with, “Oh, we love it so much!” I hear this all the time, where people tell me, “This deal is going to happen, Steli, and they tell us they are happy with everything, they need no changes, even if they’re an enterprise client.” I always go, “Uh-huh, let’s see about that.” Then three, six months down the line, I check in, I got, “How is this deal that would go through any changes going?” They’re like, “Ah! All these surprises are coming up and all these last-minute things.” Yeah, that’s always how it goes.
Here’s a hack for you guys on how to mimic this: What you want to do is once you’ve worked on a deal for longer than a month, you need to bring in somebody else in your team to help before you finalize negotiations.
In our company, what we do is if I work on a deal for more than 30 days, I have to get approval from one of my most junior engineers on the deal. Here I am, I’m the sales guru of Silicon Valley and I go to a junior developer, engineer, programmer, and I have to get his approval, although I am the CEO and founder of this business.
Usually how it goes, I go over there and I start selling the person, “Hey, here’s what we need to do this deal and yes, it’s a little bit different than usual, but this company is going to be awesome,” and I’m selling him on like why I made all these compromises. Then that guy, Stefani, he might just sit there and look at me and go, “But Steli, this makes no sense.” Then I go, “Oh my god, you’re so difficult, you don’t get it, I’m the sales guru here,” blah, blah, blah, and I try to resell him on why I made all these compromises.
Then at the end he looks at me and he goes, “But that still doesn’t make any sense. Why would we want to do this? We never do this thing.” Then finally I go, “Oh, shit, I fucking hate everybody in this company,” and I storm out of the room but it was the moment I realized, “Oh, shit, he’s right,” and I go back and say no to this.
It’s like gravity. Like I’m teaching this shit and still, if I work on a deal for more than like 30-60 days, I start to get really invested in it and then I lose my objectivity and I get too invested in it and I want it to happen and that makes I’m willing to make compromises that are bad for the business.
Make sure that when you negotiate, you never negotiate alone, you always bring in new people. If you don’t have enough people in your startup, just bring in advisors, friends, your mom, it doesn’t matter, just somebody that’s super critical. Just go and pitch them on this thing and see when they go, “Well, that makes no sense, I think that’s a bad idea,” just deal with that. That’s very healthy medicine for your bad ideas.
Know that you need to be willing to walk away. You need to be willing to tell an enterprise customer no and it’s fine. You know how many times I tell customers no to things and they still go and buy? They are like, “We will never buy if you don’t hit this thing because it will be over our budget, if it’s not this thing.” I go, sorry, I can’t help you, this is the price, I can’t be below that. Thanks, but good luck with the other product.” The next day I see their credit card came through and they bought.
You know how many times people tell me, “If you guys don’t build this feature, we’re going to cancel,” and we’re like, “You know what? It’s going to take us a year to build this.” “Then we can’t buy!” “Well, then you can’t buy.” And then they buy anyways.
Just because people tell you, “You need to do this or this deal is not going to happen,” sometimes it’s true, but not always. You need to know the line in the sand, you need to know what you’re willing to do and what you’re not willing to do. You need to get other people’s help to get through it because negotiating alone sucks and you’re going to suck at it if you do it.
All right, I see lots and lots of questions coming through in chat, that’s awesome. Keep the questions and comments going, it’s going to make the Q&A session a lot better. Two more slides and then we’re going to go into the Q&A part of this.
How to shorten the sales cycle?
A lot of times I get asked, how can I shorten the sales cycle in the enterprise world? There are a few things that you can do. Number one is you need to learn everything about your customer to understand their incentives and their priorities. If you know the priorities of the person, the department and the overall organization, you can find ways to tie your product, your technology, into that priority. Help them see how buying your technology is going to help them with whatever is a priority right now for them. If you become a priority, people are going to prioritize you at the top, make the decision much faster, make sure that they buy you a lot quicker.
So the easiest and best and fastest way to shorten the sales cycle is just to be a priority and find a way to become a priority for them.
Besides that, you can do some hacky things. You can offer them incentives, that can be like a discount. “Hey, end of year, we have an end of year promotion, if you guys before whatever, the 31st of the month, you’re going to get this massive lifetime discount.” You can give them discounts, you can give them premium services for free, “We will waive the consulting fee of $10,000,” “We will waive the services and support fee of $20,000,” whatever it is, you can waive fees, you can give them discounts.
The other way is if you are in the early days, you can make access to your product scarce, so you could say, “Hey, we’re running an early access program, only 10 companies are going to get access to our product right now, we have 30 companies we’re talking to that are interested and we need to make a decision by the end of next month who we’re going to allow early access. Is this a time that works for you, because if not, we would love to stay in touch, but we want to prioritize to talk to companies that can move that quickly.”
You won’t believe how magical this can work, making something scarce and pretending that you might take it away from them will increase the desirability of that thing a thousand-fold.
Those are some of the tricks of making the sales cycle move faster and there’s a few other small tactics.
The virtual close
Now I’ll jump actually before I go back. The number one thing that you need to ask, the most powerful question you need to ask, once you’ve qualified an enterprise client, once you’ve spent some time to really understand them and you figure out, yes, we can help them and they can help us, this is a good fit—is to ask them, “What is it going to take to get this deal done?” This is what I call the virtual close. Then what you need to do is, whatever they answer you, you need to follow up with follow-up questions until you arrive at a virtual close. So they might go, “Well, it’s a good question, I need to bring this back to my team and see what kind of questions or concerns they have.” You go, “Cool, what happens next?” “Well, next, we want to jump on another call with you and talk about the pros and cons.”
“Okay, let’s say that call goes well, what typically happens next?” “Well, next you would have to go through the legal department.” “All right. And then?”
See, I never just stop there, I always go, “And then? Are we in business already?” “No, no, no, then you have to go through procurement.” “Cool, and then?” “Well, then you have to talk to my grandmother and she needs to read your palm.” “All right. Okay, and then? Are we in business then? Are you a customer?” “Well, yeah, then we would buy.”
Okay, now I have a roadmap, I know all the steps it’s going to take to close this deal. I might know red flags, I might know timelines. Now I have a roadmap and I can plan accordingly.
Most companies never do this, they just think one step ahead, “Oh, what’s the next step?” “Oh, the next step is talking to my team and jumping on a phone call.” “All right, let’s schedule that.” Then you schedule that, “Oh, cool, what’s the next step?” “Well, the next step is let us connect you with legal.” “Okay.” You’re always just thinking one step ahead and you never know how many steps is it going to take, how long will this process take? When you don’t know what the process is, you can’t manage it and you surely can’t shorten it.
One other trick, once you go through that process is you might figure out that you can parallelizing the process. “Hey, if I know that I have to talk to you, the marketing department, but then also legal and procurement,” what you can say is you can tell them, “Hey, can you put me in touch with legal and procurement right now so I can talk to them as we are progressing with the pilot? I want to make sure that if the pilot goes through successfully and we’re ready to rock and roll, we won’t be slowed down by legal or procurement and I have to wait another three, four, five months to be able to start working together. We’re willing to make that investment and start the conversations with legal and procurement early, even if the pilot doesn’t become a success, then it’s just our loss.”
You can start parallelizing the process and talking to these different departments from day one versus waiting for three months to working with your champion in their department to then hear about this legal and procurement department and go through it sequentially, which usually takes a lot more time.
The legal hack
The other thing is a little legal hack that I want to give you to shorten the sales cycle is to ask them if they’ve bought something similar before and if you can have the contracts that they used for purchasing that product that were approved by legal. That way, what you can do is instead of writing your own contract, sending them to their legal department, their legal department will look at every word and try to eliminate risk, all risk to all humanity they could ever dream of, they’ll eliminate, so it might take them a huge amount of time going through your new contract, especially if it’s the type of contract or written in a language that they don’t like or use or are familiar with. They’re going to take it apart and it’s going to be a really painful process of back and forth between your lawyers and their lawyers.
Instead of doing that, what you want to do is, why not just take something that was preapproved, that was for something similar to your product or to your pilot or whatever it is you’re selling, you take that preapproved thing and you just cut out the terms and you change them, so you just change pricing, timelines, these types of things, or maybe you want to edit it, show it to your legal department, but what you’re doing is you’re sending them then a contract that legal, in their company, has already preapproved in the past. So they’re going to go through it much faster, they’re going to like it much better and you’re going to have a lot less back and forth, which means you’re going to dramatically cut down on the legal slow down that usually occurs during the enterprise sales. That’s just a little hack for you guys to be familiar with.
Recall reference experiences
That comes to this last tactic before we go into Q&A, which is to recall reference experiences. What I did is I asked, “Hey, have you bought something similar in the past?” What you do is, you want to ask your enterprise client if they’ve ever purchased something that was somewhat similar to you, even if the similarity is just that it was a technology company or a SaaS product, robotics arm or whatever it is that you do. Something somewhat similar, not the same, similar.
If they say no, that’s kind of a red flag. Do you really want to be the first one or if you’re going to be the first one, just be aware that it’s going to be a lot more painful selling to an unsophisticated customer, a customer that doesn’t know how to buy your type of service or product or technologies, it’s just going to be a lot slower than somebody who has bought something similar before successfully.
But independently from that, if they bought something and said, “Yeah, yeah, a year ago, two years ago, we bought something similar,” what you want to do is ask them, “Was it successful? Well, tell me all about it, how did you hear about their company, their technology? What was the decision-making process, how long did it take before you guys bought? When you bought, how successful has it been?”
Here’s the kicker, if they tell you it was not successful, “Yeah, well, we really loved it, we were really passionate, but at the end of the day, it was a catastrophe, it never really delivered what I wanted, the technology was buggy, everybody hated it,” yada, yada, yada. Now you know that they have a reference experience that is bad. You need to be aware of that because now you want to disassociate yourself as much as possible and go as far away from that as possible because you know that once that internal champion brings your product or technology to other people in the company, somebody will go, “Didn’t we buy something similar two years ago and it was a catastrophe? Didn’t we back then say that it would be great and it would have all these benefits that sounded similar to what you’re telling me right now and then it was a catastrophe?”
It only takes one person with that kind of pretty cynical mindframe to kill your deal. You need to know if they had failures in the past for something similar so you know how to disassociate yourself, how to make yourself stand out in every pitch in every room with every person, you’re like, “Here’s how we are and here’s how this is different from this other thing that you’ve experienced in the past.”
Conversely, if they had a lot of success with the last thing that they bought, you need to know that as well and associate yourself as closely as possible with their technology or product and say, “We’re just like them,” because that means we’re also going to be successful for you. You need to know their past to know how to influence their future. It’s a simple hack, simple tactic, but it can make all the difference in enterprise sales.
All right. With that, let’s rock and roll on the Q&A side of things. I’m going to scroll through the chat and then go through your comments and your questions and make sure to keep adding more questions as long as you have them, in the chat window and I’m going to be answering them as good as I can.
So let me just go back, scroll back a little bit. First question was from Kristoff and he was like, “Hey, if I sell to everybody, how can I make sure that people don’t feel bypassed?”
I’m not sure I fully understand the question, Kristoff, because selling everybody doesn’t mean that nobody is more important than somebody else. It doesn’t mean that you’re not prioritizing. It just means that you don’t ignore anyone and the best way for people to not feel bypassed is to not ignore them.
If you have an internal champion, you need to know that that’s your most important person, but if that internal champion brings in a very senior vice president, you need to make sure that you sell that vice president on another level, not just, “Oh, the champion likes this, so I’m going to sell the VP of sales on this as well.” No. You do your homework, you ask the VP of sales a bunch of questions, you make sure you sell the VP of sales on their level.
Then when your internal champion brings in an intern in the room, you make sure you take some interest in them as well and figure out what they need to do and what their role is going to be in this project and you make sure that you sell them on that as well.
The bypassing issue happens typically when you are more excited and more focused on the more senior people, even if somebody else is the ultimate decision maker. That makes the decision maker feel shitty, “So I’m your champion, I brought you in but now that the VP of sales is in the room, you totally ignore me and you totally couldn’t care less about me.” That makes people feel bypassed and feel shitty and then, “You don’t email me anymore, now you all of a sudden start emailing only the VP and you don’t even cc me on these emails.” That will create kind of a bad taste in people’s mouth.
But if you know how to prioritize and you realize who is the most important person in my relationship, the person I’m going to be working closest with to make this deal happen, but then who are all the other humans that are part of this deal and how can I make sure that I give all of them the proper attention? Not the same amount, but the proper attention? That’s going to make you shine at the end of the day.
Kristoff is I think following up with some more comments on this. “Right now we are talking to tech scouts, but I have an intro to a senior person from someone outside of the organization and could push things further along, but the tech scout might feel bypassed if I do.”
All right, that’s a good question, that’s like, “Hey, I have this internal contact, but now I’ve got this other connection that might be a lot more fruitful. How do I navigate this while making sure that nobody feels bypassed?”
You keep people in the loop. What I would do is I would jump on a call with the tech scout and I would say, “Hey, I wanted to see how things move along. I just got introduced to Bob, are you familiar with Bob? He’s a senior person that does, blah, blah, blah,” whatever it is, “and I’m thinking of talking to Bob and having this and this conversation with him and I just wanted to make sure I loop you in so you know kind of what’s going on.”
That’s totally fine and it depends, like the tech scout, is this someone you have a relationship with or not? Is this something that just filled out a form and said, “Send me all the information about your product, because my job is to go and get all the information from all companies about all products and put together a massive spreadsheet and then send it to our senior executives.” That person, you can totally bypass, who gives a shit? That person is zero relationship. It’s different than if you reached out and you cold called and you talked to this tech scout and you built the relationship and they like you and they’re interested in what you’re doing. That’s a different type of relationship that needs different type of care.
But usually, I would just make sure that I keep people in the loop and I don’t create multiple silo level of conversations. Sometimes you’ll have a champion and you’ll realize that champion is not going to be able to help you, so you need to just switch champions. That champion might not feel great about you, but that’s kind of a risk you have to take.
So it really depends on the situation, it’s a case-by-case basis, but if possible, when you have good relationships with people, I would make them part of the process. Let’s say the tech scout is really awesome, is kind of an internal champion, you know them well. I would call them and I would go, “Holy shit, I have the chance to chat with Bob, who is the senior vice president at your company. I wanted to call you first and get some advice on what the best way would be for me to approach the senior vice president of the business? What’s your advice to me?” Like bring them in, make them part of the process, help them help you, tell them, “Hey, I have this meeting with this other person in your company, what can you tell me? What’s the best way for me to approach them? Do you have any advice for me how to make that meeting as valuable as possible to them?” Just make them part of the journey versus cutting them out of it.
All right, great question by the way. Let me get to the next one.
Gary asked regarding cold calling, “How do you create trust, sell to the right person on the phone with such limited time to get the meeting you need?”
It’s tough. I mean, that’s the reality of it, it’s very, very hard. The way you do it typically on the cold call is less with the words you use, but more with the delivery of the words. It sounds stupid and we all don’t like that idea, but it’s still reality that your tonality, your energy, the way you sound to people will influence the way they feel about anything you say.
The way you feel about what you say is all that matters for them to be trusting you, for them to be feeling comfortable and wanting to buy into whatever you’re selling, or feeling that you’re trustworthy.
I can share a script with you that we used in cold calling, but the way you need to think about a cold call is you need to think about the entire journey of the conversation. When they pick up the phone, the first question they have in their minds is, “Who is this and what is this about?” Especially when they don’t realize the phone number and the voice.
The first thing that comes out of your mouth can’t be a pitch about your business and you can’t be too fast—this is another mistake, 99% of cold calls are dead in the water at the hello level because people speak too fast too soon. They go, “Hey, my name is Steli, I’m calling with Close.io because what we’re trying to do is,” da, da, da, da. The person is like, “What? What? Who are you? What is this about? What the fuck? This sounds like a sales call.” That’s all they know. Because why they were trying to figure out and calibrate for your voice and what this is about, they’re still in somewhat of a confused state of mind, you went really super fast. You need to make sure that you speak slowly, that you tell them, “Hey, here’s my name, here’s the company I’m calling with, and here’s why I am calling you right now.” Then you need to give me the—now might go, “Okay, but why are you calling me?” Then you give me the elevator pitch, just one sentence. What we do in a sentence, so you suggest to them, “Don’t worry, this won’t take your whole day, is we do X, Y and Z. Does that in general sound interesting to you?”
When they say no, at that point, if they say maybe, no, yes, it’s irrelevant. If they say no, you still go, “Interesting, how are you guys dealing with X, Y and Z currently internally?” If they say maybe, you go, “Interesting, how are you dealing with this internally?” If they say yes, you go, “Awesome, interesting. How are you dealing with this issue internally?”
You need to have that comfort and confidence that even when they scream at you, shout at you, and they say, “I’m not interested,” whatever it is that they say, that you’re still calm, you seem calm, collected, you seem confident. You just sound good.
That will make people trust you. Not on a rational level, because they can’t, they don’t fucking know you, but on an emotional level, and that’s really where trust matters even more at this point.
Cold calling is a fine art, it’s a martial art of business and it’s tough, it takes a lot of practice. There’s no shortcuts, there’s no magical sentence you can say and people will trust you. You’re going to have to work for it, there’s no way around. If you want a sparring partner, you want somebody to listen to your cold call and give you feedback, just shoot me an email, it’s Steli@Close.io, more than happy to jump on a call with you and give you feedback and help you and coach you.
All right, next question. Teet says, “As part of the buy-in process, big corporations usually compile comparison spreadsheets of different competitor solutions.”
Yes, they do. That’s one of my least favorite things that they do, but okay.
“They compare solutions based on different criteria. How do you educate your customer to dictate the criteria? Any good tips?”
That’s a beautiful question. First of all, you want to ask them how they typically do it or how they are planning on doing it. That’s why the question that I offered before, which was, what will it take for you to become a customer, that’s why that question is so important, because if you really follow up and follow through with that question, at some point they might tell you, “Well, then we’re going to do a competitive analysis of your market and see what all the solutions are.” Then you go, “All right. Tell me a little bit more about that. How do you typically do that? Can you show me the matrix, the kind of framework that you use so I make sure that you get all the right information to make the best decision? I just want to make sure that whatever the criteria are that you’re looking for, you’re getting the right piece of information and you get it as quickly and as easily as possible.”
Then sometimes they will show you their spreadsheet—not with the competitors, but just the matrix of it—and sometimes they won’t. If they do, awesome. Now you know what they have in there and then you can raise any “concerns.” You can say, “Hey, this spreadsheet is awesome, one of the best I’ve ever seen. I’m curious, why did you leave out security out of it? Why is that not something you’re comparing all solutions for?” Whatever it is that’s important to you. Maybe it’s security, maybe it’s something else. Or if there’s a criteria that you dislike specifically, “Hey, I’m curious, I’ve never seen somebody include this little criteria, why is that important to you?” You ask these questions and you learn and step by step and tiny little steps, you see how much influence you can have over this. That’s the way that I would approach it.
Beautiful question, thanks for that, Teet.
Next question/comment, Sebastian says, “Let’s say we had a platform which we want many small companies, restaurants and grocery stores—no chains—to spend small amounts of money, typically let’s say 10 bucks a month. What are some of your ideas about how we could set up the sales process?”
My man, Sebastian, there are multiple problems with this. If you’re selling to that type of small and local business, the problem is that it’s usually very hard to reach them in a cost-effective manner. It’s hard to reach them just through the web. They’re not searching for these solutions today.
A lot of startups that I know in the Valley and around the world that sell successfully to like local businesses, they do have to do outbound sales, they do have to either call these businesses or even show up in person. That is somewhat expensive, even if you do it with very junior people, still somewhat expensive.
The most successful companies in that area do not sell something for 10 bucks a month because it’s just not sustainable.
If you have to go out there and sell in person or over the phone, it might as well be 100 bucks or 200 bucks because a restaurant that makes—in some cases if it’s a restaurant that goes real well, they might make a few million in sales per year, if it’s a restaurant that’s not doing well, they’re still going to do a few hundred thousand in sales a year, they can afford 100 bucks. They might be a little scrungy and they might not want to spend any money, but if you’re talking to them, you need to just sell them. That’s the hard part about this.
But if you have to sell them anyways, it doesn’t matter if it’s a 10 buck thing or 100 buck thing, then it might as well be 100 buck thing, it’s just going to dramatically change the unit economics of your business.
I would be careful with super cheap on pricing. I don’t know of any other way to sell successfully to restaurants other than cold calling them and showing up in person. I don’t know any company that’s successfully scaled selling to local businesses through advertising, or really any other type of thing. I think that’s the approach that I would probably take.
All right, let’s see what is the next question—Martin. “Let’s say the contract is approved, ready, but the internal credit is not requested yet due to lack of time. Follow up by phone, it still takes month until it’s signed. How can I get the signature faster in a sympathetic way?”
First of all, I personally, really, like my number one priority is not to be sympathetic or liked, my number one priority is to be effective and to create value. That being said, I don’t fully understand the situation, it seems like people really want this, your contract was approved, but they didn’t get the budget approval yet, that’s the words I would use versus credit, the budget approval, and the budget approval takes a long time and you’re following up, you’re calling them, it’s still not done, and you’re like, “How can I make this happen faster?”
Honestly, at this point, I’m not sure that you can because this is at the very end of the buying cycle. The mistake I think that was made was at the beginning of the buy cycle, not asking the question on how budget approvals are being made and how quickly they are made and who is influencing them, what you can do to help in the process. It seems like you don’t really know what that process looks like and you didn’t know going into the deal, so now you’re in this weird space where you’re just waiting and you don’t know what to do other than just checking in every once in a while. You’re like, “I don’t want to be annoying, but then again I’m waiting, waiting, waiting, nothing happens.” It sucks to be at that place, but I want you to understand that the root cause of being at that place was that you didn’t do the proper amount of homework at the beginning of the deal, understanding all the steps it would take, all the things that would be involved with it, understanding what their budget and budget approval processes, who is involved with it, and understanding how to influence it. Now you’re flying blind.
On this deal, I don’t know. I mean, one thing that I would do if I were you is I would call my contact and would ask for help. I would just tell them straight up, “Hey, John, just wanted to quickly call you. I know that probably budget is not approved yet, so you don’t have to tell me that it’s not yet approved. Help me out here, I know that we really want to make this deal happen, I take personal responsibility for making sure that this deal happens. Help me out, educate me, what’s the process like? How much longer do you think this takes? Is there anything I can do to help you or anyone else or the process move along? What should be my expectation? What is your expectation on me? Do you want me to just be quiet forever and be super passive? Do you appreciate me checking in every two, three weeks? Making sure this doesn’t fall through the cracks? What’s your expectation on what I should do to help you with this?”
Just ask them for help, ask them for insights and learn, like figure out more about the situation rather than trying to guess what the right thing to do is, because you’re probably going to be wrong with that.
Excellent question though, thank you so much for asking it.
All right, I think that we’re through with all the questions, almost. Right around time, we’ve got like four more minutes.
Gary, there you go, one more. Yeah, of course, hey, we’re going to do this, this is going to be like the German part of my personality. This thing is till 7:30 A.M. Pacific Time, we have five more minutes, we’ll go five more minutes.
Okay, validation, Gary, thanks for the follow-up question. “Validation—we are halfway through the development cycle of the product. Many of our prospects have said they would use our product once they see it and that it works. Difficult to get pilot customers to get perfect market fit. How to sell people on excited, involved in the development cycle before the MVP is available?”
All right, that’s a great question. Here’s what you need to do, Gary. Number one, you need to understand that most buyers are very unsophisticated when it comes to product development. Let’s say—I’m one of them, so to me, as a layman, there’s very little difference between the beautiful mockup that I can click around and that visually is the UI for your product or technology, but where the backend is not working yet. It’s not a really functional product, it’s just mockups, but it’s visual and it feels real.
That, to 99% of your buyers, will be enough to get that emotional, “Oh, yeah, I like this! Oh, yeah, this is cool, we would want this.” If you don’t have that already, you want to create that. If you have it, you want to understand that that is as good to the real thing as—there’s almost no difference to the buyer.
You want to utilize that, you want to be able to show people how this will work and how this will look and feel and make it as realistic as possible, even if it changes down the line, doesn’t matter, but you want to show them something that seems real—even if they know intellectually that it’s not, emotionally it will feel real and they will fall in love with it or not.
If they fall in love with it and they’re like, “Yes, this is cool, oh wow, yeah, that’s beautiful, that’s really nice,” then what you do is you want to get a higher level commitment from them. What I would do is I would do an early access program. I would tell them, “Hey, this will be available to an exclusive group of only ten companies six months from now. We have 40 companies that are in the waiting to get one of those 10 spots and we’re trying to evaluate which companies are going to have the biggest success with it. We’re going to hand-pick these ten companies. If you want to be part of that, we’re going to have to go through X, Y and Z in terms of our process, you’re going to have to put down a $10,000 or $100,000 or $5,000—whatever the hell it is, $5—fully refundable deposit to secure your spot and you’re going to have to make a decision by the end of next week or the end of next month, or whatever, the next quarter. Does the timeline and the terms make sense to you? Are you interested in being an early access premium customer?”
Most won’t, most won’t say yes to this. If you have ten prospects—and typically if your product was live you would get let’s say five of them to buy—if you propose them an early access program like I just did, maybe of the five potential buyers, only two will say yes to that. It doesn’t matter, two is great, two is good. If two companies are willing to give you money and say, “Yes, I want to be an early access customer,” that’s a lot stronger validation than them saying, “I’m interested, I really like what you’re telling me and whenever you have something that’s ready, I want to take another look.”
Now, if you pitch to ten customers that are really excited and none of them want to put down money, that’s a bad sign. That’s a bad sign. You want to figure out what would it take for me to get somebody’s money to be an early access customer? That’s the way that I would approach this.
With that being said, ladies and gentlemen, we’re right at the time of the webinar. Thank you so much for the awesome questions, the interactions, for staying with me over such an intense webinar.
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Again, make sure to shoot me an email, if you have any questions that I wasn’t able to answer, just shoot me an email at Steli@Close.io, make sure to go to Close.io/free-sales-course and sign up for an email course. A lot of the lessons that I taught today are going to come into your inbox and a lot more stuff that we didn’t get to cover today.
I wish you a beautiful rest of your day/evening and I hope that you are crushing it today. Take care, guys, bye-bye.