Some of you know that I spent the last decade being a procurement professional. I started from a first line manager for design software for Soc design at Apple. I spent a brief period being an engineering program manager for a wearable device at the then Samsung Strategy Innovation Center, but eventually went back to become a team leader for indirect procurement at NIO. From there on, I expanded my scope from software to data center infrastructure, other indirect categories such as marketing, PR, design, and eventually owned the entire procurement team, including the hardware supply chain for several self-driving car companies such as Zoox, GM Cruise, and Motional. Over the course of the years, I built a robust practice in the procurement of various commodities, with enterprise software being the dearest to my heart. Of course, when I finally decided to take the leap and start my own company, software was the first that came to mind. Granted, we spent about a year building a marketplace for lawyers, only to find that this is a highly fragmented market with huge customer acquisition costs and a high level of difficulty to scale. Finally, this year we pivoted to a B2B enterprise legal automation software, targeting in-house legal departments and other cross-functional teams such as procurement to help them manage their legal workflow and automation.
As they all say, the CEO’s job starts with sales. Even though I was only on the opposite side of the table for the past ten years, I learned from the best such as Neil, Krishna,Tarun, Bob, Rick, and Sid, to name a few. And because I was on the other side of the table, I reflected on how I felt and even provided tips to sales folks once upon a time. Now, 90 days after I dived into this sales journey and having been through a few difficult successes and many more miserable failures, what have I learned in conjunction with my experience of being in procurement before?
1. For high-value 2B enterprise sales, cold calling is almost useless
When we were doing very low value, much higher volume 2C sales, cold calling and outreach were moderately useful. We would get responses from prospects and occasionally close a contract through that.
However, enterprise sales with much higher volume require an entirely different approach, which I will dive into in the next few sections. For this kind of sales, if you don’t personally know the counterparty or at least have a warm introduction, the chances of even having a phone call is slim, not to mention any kind of meaningful opportunity to close on a deal. So we quickly realized that to make progress on this kind of deal, we need to take an entirely different approach. This takes me to my next point.
2. Start with your own network. If you have a friendship and long-term relationship with the counterparty, you have the best chance to secure an opportunity to explain your product.
At the beginning, we thought we’d only target law firms. Of course, I started with my classmates from Emory School of Law and secured a few meetings. Even though it has been almost 20 years, my classmates would still take a phone call from me just to catch up.
But we quickly realized that the law firm market is highly fragmented with a huge spectrum of technology adoption, so we can’t really sell to very big law firms or very small ones, each with its own kind of challenges. And I started to run out of contacts. Then I sat down and reflected again on this point and had an “eureka” moment: why don’t we switch to in-house legal departments, especially for high-tech companies where I know the most people? Once we expanded our scope, I started to quickly line up potential leads again.
So the learning is it’s always better to start from where you know the most people and have the most influence. Of course, a CEO will run out of contacts at some point. We will address this later.
3. Successful Enterprise SaaS sales require the supplier to know the distinction between the user, the decision-maker, and the budget owner.
One reason law firm sales is so difficult is because the user who wants the product may not be remotely influential to the decision-maker to buy the product.
We have worked with law firms where the associates love our automation product. If it were up to them, they’d purchase all of the features and roll them out to the entire firm, immediately.
However, the decision maker, in this case, the partners, may have an entirely different perspective. Partners, of course, want to increase productivity by adopting our machine learning-powered innovative product. But they have other concerns. Adopting new technology means change, which causes disruption of the current workflow. In some firms, if the IT department is part of the decision-making process, they are definitely not thrilled with new technology because if anything goes wrong, it means extra work and headache for them.
More importantly, if the decision maker does not necessarily control the budget, it brings another layer of complication. Fortunately, for most law firms, if the partners are responsible for their own P&L, they have a pretty heavy say in what technology they want their department to use. It may not be as simple for an in-house department.
For in-house procurement, as I have learned in the six high-tech companies I worked for, a committee is usually comprised of procurement, the user group, and finance. Even the user group may be dying to purchase the product, and you can convince procurement that your product is superior and provides high value based on the price level, you still need to secure the finance approval to spend from a certain budget. If this user group has a budget, it may be a relatively straightforward process. However, if the user group does not have the budget, then they need to collaborate with procurement and finance to “find the budget”. Sometimes they can switch some stuff around to allocate for this project. Other times they can’t. It all depends on where you are on the yearly budgeting cycle, how much they have spent so far, how urgent and necessary this project is, etc.
Of course, I am only speaking to this based primarily on my past experience. I will definitely learn more as I start to navigate through this process from a supplier’s perspective through this journey.
4. Learning about the customer’s pain points and proving that your product can provide a solution is key
Salespeople have a bad reputation of “talking a lot”. However, the best salespeople I have met always take the time to listen.
The ones of us who are actively developing products know this very well: it doesn’t matter what we think the customers need. It only matters what they actually need. How do you find out? To listen attentively. Do not imagine problems and provide speculative solutions. Do not think you know better. The customers have the final say.
Of course, it’s a huge advantage if the founder or CEO has lived through this pain before and know to some extent what the customers may want or need. However, every customer is different. Things change. The rest of the tech stack changes. So the best approach is to take inventory of what they have and what they want and solve for providing a solution to bridge the gap.
5. Build a repeatable process and replicate yourself by teaching the team how the product works and leveraging their network
Earlier I mentioned that at some point, the CEO’s personal network will run out. Then what? The solution is easy: find more people like yourself and tap into their respective networks.
Once a company identifies the product-market fit where people want your product, look for people that have connections to tap into this segment. Because cold calling rarely works in a high-value B2B SaaS enterprise context, recruiting people who already have a network is key. Trust is not built overnight. Your target customers must know you or your salespeople. So structure the sales team accordingly.
Then the question becomes whether this new team may not know the product as well, or not at all. Therefore, training becomes the key. Take the time to educate them on the product. Let them watch how you would do it personally. Make sure they understand the details and nuisances as well as you know. Nothing is a bigger turn-off to a prospective customer than an ignorant salesperson.
6. Finally, remember people is people.
They don’t want to be sold to. They want to make friends. They don’t want to be harassed.
Again, I learn from the best.
The most successful salespeople I have known always take the time to build a friendship first. If I don’t like you as a friend, then making me buy anything from you is an uphill battle.
One possible approach is not to start selling right away. When I reach out to my connections from before, I almost always start by trying to catch up and see where they are at and what they have been up to first. If you go straight into selling and selling, it’s a big turn-off and may even ruin the friendship.
Similarly, if you are lucky enough to build new relationships, take the time to get to know them. Successful relationships are not built overnight. It may take several iterations. No one likes to hang out with people that only see dollar signs in them. They want to be respected, be heard, and find a new friend that has something in common with them.
Finally, if they tell you no or not right now a couple of times, back off for now. Nothing is more annoying than an extremely aggressive salesperson that’s on your case repeatedly. I have blocked such people before. The good salesperson knows when to take a step back and maybe check in in 3-6 months. Things may have changed. There is a reason why high-value enterprise sales have a super long cycle.
Sounds intriguing? Think you can contribute to our journey and at the same time make millions? Come join us. Reach out to me at gloria@trusli.com.
Comments