The basics of enterprise sales
As your clients become more complex and their contracts become more valuable, you may notice that your sales cycle becomes longer and more complicated to procure larger, more valuable deals. Enterprise sales are the most time-consuming and complex of all types of sales. Compared to mid-market and SMB sales, enterprise sales require significantly more touchpoints, a long-term plan, and more strategies.
Nurturing relationships are at the core of sales, especially enterprise sales. When closing deals with long-term corporate partners and clients, this level of care is paramount. The goal of personalized selling is to close deals not just to make sales, but to provide customized solutions and the right level of attention.
How Enterprise sales differ from SMB sales
What are SMB Sales
The best way to describe SMB sales is to create a product that solves a problem for the broader market and then work to deliver it to all those who are likely to use it.
There is no significant risk, the product or service isn’t sophisticated, and it doesn’t require much deliberation or approval for transactions.
Sales of this kind are very transactional, with short sales cycles. This process usually involves volume and optimization, and it’s usually very basic.
You typically sell your product to a few key decision-makers or to a small purchasing committee. Your clients are small to medium businesses.
What are Enterprise Sales
SMBs (Small Medium Business) and Enterprises are distinguished by their size. Enterprise deals are complex and lengthy, while SMB deals are small, fast, and transactional.
With more money at stake, comes greater risk, meaning a more sophisticated buyer journey that has a completely different approach to closing the deal. The goal is to build a custom solution for each individual customer instead of a generic solution that would work for everyone.
As enterprises are the largest types of business, they include:
- Sales cycles are usually longer (6+ months).
- Many stakeholders/decision-makers.
- Higher level of risk.
- Lengthier negotiation period.
- High contract values involved.
In contrast, small- to medium-sized businesses are characterized by the following:
- Sales cycles are shorter.
- Fewer stakeholders/decision-makers
- Lower risks involved.
- Sales negotiations take less time.
1. Length of Sales Process
Sales processes usually take longer when a deal is valuable. In self-service sales, the customer dictates the length of the cycle, while transactional sales can be slightly longer and more complex, and enterprise sales cycles can take up to a year to close.
2. Ease of buying
Customers can typically purchase by themselves from self-service or small-to-medium business deals, but an enterprise-level deal typically requires a purchase order.
3. The number of decision-makers
A larger transaction will bring in more decision-makers as it nears completion.
4. Level of Impulsiveness
The lower price point makes it easier for impulsive and quick purchasing decisions to occur while enterprise-level decisions require more deliberation.
5. Customer Pain Points
Generally, the customer’s pain pertains to an individual or a business’s immediate needs. At the enterprise level, the majority of the pain is related to future business needs.
6. Lead generation
An account representative spends a lot of time grooming a strategic, ideal client. Salespeople in lower-tier sales cycles are looking for prospects rather than developing them.
7. Buyer Persona/Type
Market knowledge is crucial for enterprise salespeople. To properly position themselves against the competition, they must understand the account’s needs and align with competitor offerings. SMB’s sales reps just need to be focused on their prospects.
8. Customer Acquisition Cost vs Life Time Value
You can justify a higher customer acquisition cost (CAC) at the enterprise level based on the lifetime value (LTV) of your clients. SMBs and mid-market companies are more likely to benefit from more automation or a less-intensive sales process, due to a lower customer lifetime value.
Evolution of sales strategy
Enterprise sales reps take a radically different approach to selling. As target markets have become more sophisticated and savvy over time, so have sales practices evolved as well.
Use whatever style or methodology works best to analyze the prospect’s pain points and to understand how deals are closed from their perspective. Develop a deal map with your Champion and gain their buy-in at the very beginning. By knowing about the different stakeholders and departments, we are better positioned to meet their needs and gain their buy-in. In addition, sales processes differ based on niches.
Choose a strategy that suits your needs
There are several time-tested sales methodologies. Here’s a snapshot of some popular ones:
- SPIN selling: Focused on a set of four stages (Situation, Problem, Implication, Need), each with the objective of asking the right questions.
- Challenger selling: Inspired by a sales personality in B2B sales, this style is characterized by sales representatives taking an active role in conversations with customers.
- Solution selling: Understanding the customer’s biggest problem and offering them a solution.
- Value selling: Selling based on the benefits of the product.
- Target account selling: Salespersons focus on a small number of accounts to form closer relationships with each client.
As early as the 1950s, the salesperson researched their potential clients, drafted a proposal, and made a presentation to a prospect. During the sales meeting, the salesperson will describe the product’s features and discuss its ability to solve a client’s problem. Today, a lot has changed with marketing and sales techniques, with software and technology aiding the sales process.
Essentially, a sales presentation is a type of sales pitch designed to influence your audience, such as to get them to accept a quote. An effective sales presentation provides value to the audience. A successful sales pitch relies on effective communication tools and a focus on what your prospect needs, not your product or service.
It’s true that a framework like “Hook, Problem, Solution, etc.” can be applied to any sales presentation, but it covers a variety of presentation formats depending on where you are in your sales process. Among them are:
- Sales webinar
- Software demos
- Formal group presentation
- Small sales presentation
- Sales video presentation
Produce relevant educational content:
It is very important to educate buyers through relevant outbound marketing when you’re making a complex sale, since they may not be actively searching for a solution. How your solution resolves particular problems should be the focus of your content.
It is difficult to reach decision-makers at high levels. A canned approach won’t cut through the noise cluttering their inboxes and news feeds. You should test different messaging to find out what resonates with your audience and be prepared to adjust when needed.
You can reach executives in several different ways:
1. Use of Case studies
The purpose of a case study is to show prospects what the problem is and how to resolve it. Prospects gain insight from success stories and make it relatable to foresee the potential of the organization.
2. White paper Presentation
White papers allow you to take a closer look at industry challenges and how your offer can help organizations overcome them to achieve a competitive edge.
3. Sales Webinars
By hosting webinars, you develop thought leadership and industry expertise. During live webinars, you can interact with prospects and walk them through topics of interest.
4. Events/ Live-demos
For potential customers, real-time demos are often a major selling point. As a salesperson, you get to meet with prospects, answer questions, and display your expertise.
Inside the Complex Sales Cycle
During the enterprise sales process, the sales team faces a couple of challenges:
- They must reach out to critical decision-makers in an organization,
- They must educate buyers on how a product or service will benefit them specifically.
Typically, costs for enterprise-level offerings can be high. Even if many stakeholders are interested in your product, you will not be able to close the sale without the right budget. The sales team must focus on talking to people who have significant buying power – or who have the budget for a purchasing decision. In addition to having budget authority, they also know the inner workings of the company. As a result, they can see how a particular offering addresses a problem or a pain point in an entirely different way.
In order to solve existing business problems with new solutions, a complex sales process is needed. Most often than not, companies struggle to have a strategy when scaling or transitioning from SMB to an enterprise.
In particular, lengthy sales cycles that require multiple conversations and meetings of key stakeholders become a roadblock. Most deals are in the six-figure range or more. Bringing a prospect to closure is a complex process that requires multiple conversations and the participation of various stakeholders. The first interaction with a contact may take up to 12 touchpoints. A meeting with your target may take another 6-8 touchpoints.
Complex sales vs. Transactional sales
What are Transactional Sales
Transactional sales are a combination of self-sales and enterprise sales. With its flexibility, customers can either shop on their own or get professional assistance if necessary. Compared to the self-sale model, which has a somewhat higher volume of sales, transactional sales have a lower volume with a higher price point. It is more suited for medium-sized businesses that sell a more expensive product.
What is Complex or Enterprise Sales
Enterprise selling, also known as complex selling, involves selling high-value services to a select few. This model is common among companies that offer specialized products at high prices and require a great deal of training and customer support.
In general, the risk is high and the average deal size is much higher than the average transaction. Since the discovery phase itself requires intense effort, reps must be disciplined in who and how they spend their time. In many cases, one customer has multiple use cases, and the buy-in of many different stakeholders within different organizations is often needed. Moreover, enterprise sales cycles tend to be longer.
Generally, transactional sales tend to be less complicated, less risky, and have fewer stakeholders involved. Because complex sales require a different approach, their sales process is much more complicated and riskier with higher prices and multiple stakeholders.
Transactional sales are typically based on volume to a wide range of clients. It usually has low risk, a fast cycle, one buyer, and only one use case. A sales rep doesn’t care who he sells to, but instead how many transactions he can complete. Each deal requires relatively little investment, so they work on several projects simultaneously.
Sales reps listen to the client’s problem areas and develop solutions based on those conversations.
A sales conversation usually refers to a call conversation between two or more people in an organization. For B2B space, if your organization is using Salesforce, you can identify the success of a sales conversation from a reporting perspective, when you find a phone call that lasts longer than 2-3 minutes.
In order to better communicate with your buyers, you need to know everything about them. These sites and software can help you gain a deep understanding of your customers:
During this phase, you must ask the right questions and uncover the issues. When you do this well, they will be more willing to engage with you. It’s important to remember your buyers, especially enterprise buyers, want honest, simple, and no-BS solutions.
Calculate your Total Addressable Market
Total Addressable Market (TAM) refers to a product or service’s revenue potential. Businesses can get an estimate of how their products will perform once they are introduced to the market using this tool.
There are three ways to calculate TAM:
1. Top-down method
Using industry studies and reports, we can identify the TAM. On the downside, industry data doesn’t always reflect current trends or conditions.
2. Bottom-up method
This approach relies on the number of previous sales and pricing information. Multiply the average sale by the number of customers you have now. You’ll get the annual contract value from this. Then, multiply your ACV by the total number of customers.
(Total # of Customers) x (Annual Contract Value) = TAM
3. Value theory method
This approach is a measurement of how much your customers value your product/service—and how much they are willing to pay.