The Secret Department That Will Cut Your Enterprise Sales Cycle Time In Half
Enterprise sales is hard. And long. And full of bureaucracy.
However, when you do close that enterprise contract, it is typically worth north of $50,000 annually, depending on what you’re selling it can even be worth north of 7 digits annually. Plus, the Life Time Value tends to be higher because they are less agile as an organization. Now for the question on everyone’s mind:
How the f*ck do I catch that whale?
If you’re looking for advice on how to research your prospects, break the ice and so forth, I suggest you read this article. However, if you want to understand how decision making takes place when it comes to new software contracts in enterprise organizations so you can significantly lessen time-to-sale, read on about the department that you probably don’t think about but you should!
Now here it is -
The department sales people must be thinking about is called PROCUREMENT.
What does Procurement do? They are responsible for all company purchases. They are the gatekeeper. They are the traffic controllers. What does this mean and how does this work?
The first step when a company wants to purchase software (or anything else above a certain threshold) is that the business owner opens a request. If the company has a sourcing department the request will be for a type of product, for example a Sales Intelligence tool. If they do not have a Sourcing Department, the request will be for a specific tool. For example, to buy Amy.
Whether there is a sourcing department or not, here is tip #1 -
Make sure that you have literature comparing your product to your competitors.
Why? The reason is simple - procurement teams require that either the business unit requesting the solution or the Sourcing Team run a competitive analysis. Tip #2 -
Include pricing in the comparison.
If your solution is priced higher the sourcing team or the procurement team will need to justify the spend to Finance so you’re doing the homework for them. This will cut a significant chunk of time from your prospect’s internal due diligence process.
Now that they want to move forward with your solution because finance is appeased, the next stakeholder procurement will need to manage is Legal. We are still far from contract negotiations so at this point Legal is likely only looking for an NDA which Procurement is responsible for either getting signed or checking that it has been signed. Tip #3 -
Ask the company if you can sign their NDA or MNDA.
At the end of the day, you can only control what is in your control. Once your NDA goes to their Legal, there is a black hole of other contracts at various priorities. If you use their paperwork, you can manage your own legal team to get redlines as quickly as you can and move on to the next phase which is where a lot of companies get stuck… Vendor Risk.
Vendor Risk, also known as Third Party Risk, is responsible for external risks of the organization from, you guessed it, third parties a.k.a - YOU. How can you speed up the process? Simple, tip #4 -
Create a risk package.
Your Risk Package should include all your compliance documents: GDPR, CCPA, SOC2 and any other certification that they will inevitably ask for. As much as you get frustrated with all these bureaucratic documents, trust me, Procurement feels the same way. Compliance, privacy, security and all these other risk related subjects have really become major showstoppers in the last 5 years, meaning that many organizations don’t have a great strategy or tool to help manage these documents. This is your opportunity to be their metaphorical Tylenol - package all these documents into a digital risk package with well labeled, downloadable files.
Oftentimes Vendor Risk reports into IT so within the risk package make sure to include… Tip #5 -
Your Data and Integration Requirements.
Do you require access to their network? What type of data will your software have access to (public, confidential, internal, restricted, etc.) and what will you do with it: access it, save it, process it, etc. Include all this information in a document with an executive summary that includes the above information as well as details below.
All this sounds like a lot of busy work but take a step back and think about the fact that enterprise organizations require all this information, often just to create a purchase order. Also, as important as you think you are, enterprise companies are evaluating 100s of new tools at any given time. This explains why it takes an average of 180 days for enterprise companies to buy software. Also, Procurement is responsible for contract negotiations as well as renewal and offboarding. This function holds a lot of power and is often overlooked or, worse, seen as a bottleneck. Just like anything else in sales, you want the process to go as smoothly as possible and the quickest way to lose a deal is to lose momentum. Tip #6 -
Do this once and you will have it for all future sales as well.
Make sure you understand the hidden internal processes that enterprise companies must go through to buy software. Plus, bonus tip #7 for those of you who have made it to the end -
Lots of SMEs and companies with 1000 employees and above are starting to hire Procurement teams as well
so these crucial tips will be necessary to move quicker with smaller organizations.