Video: Early Revenue For Enterprise Web Apps

Written by Sean Murphy. Posted in 3 Early Customer Stage, Events, skmurphy

This webinar is for SaaS firms faced with an “enterprise sales” challenge by virtue of their minimum price point or number of job boundaries, business processes, or contractual relationships that have to change to create value. The focus is on early revenue. Here is the video from my February 24 webinar with DreamSimplicity on “Early Sales for Enterprise Web Apps.”

Early Revenue For Enterprise SaaS

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Slides for Early Revenue For Enterprise SaaS

Outline

Early Revenue For Enterprise SaaS : Early Revenue For Enterprise SaaS Sean Murphy, SKMurphy Inc. A DreamSimplicity Webinar Feb-24-2011 (c) 2011 SKMurphy, Inc. (www.skmurphy.com)

Goals For This Talk:

  1. Explain Basics of Enterprise Sales Process
  2. Contrast “Buy Now” Sales With Enterprise: Enter Credit Card On Landing Or Pricing Page
  3. Explain Need For an Internal Champion:  When A Product Requires Large Changes
  4. How To Identify And Support A Champion

What Sales Model Does Your First Dollar of Revenue Require:

  • Commodity Or “Buy Now!” Sale
  • Considered Purchase (May Be Enterprise)
  • Orchestrated Sales (Enterprise)
  • Complex Orchestrated Sale (Enterprise)

Sales Model Commodity Or “Buy Now!” Sale

  • Example: Simple iPhone App
  • No Change In Form, Fit, Function, Inputs
  • Characteristics: Individual Buyer; Try It and Like It; No Behavior Change Needed

Sales Model: Considered Purchase (May Be Enterprise)

  • Example: Video Editing Tool
  • Change: Individual Job Or Task Characteristics
  • Complex Decision: Evaluating Many Features; Try It You’ll Like It May Work; Often Individual Learning Curve Effects

Sales Model: Orchestrated Sale (Enterprise):

  • Example: Inventory Management System
  • Change: Group Process Or Workflow
  • Characteristics: Complex Feature Set Team; Learning Curve Effects; Unanticipated Benefits & Problems

Enterprise Sales Model: Complex Orchestrated Sale

  • Example: Configurator For Order Entry
  • Change Customer/Supplier Relationship
  • Characteristics Significant Risks; Parallel Operation Very Hard
  • Multi-Firm Learning Curve Effects May Require or Enable Contract Changes

Buy Now Vs. Enterprise Sale

  • Spending / Cost / Authorization
  • Education Needed to Understand Benefits
  • Number of People & Relationships Affected
  • Length of Decision Process

Buy Now Vs. Enterprise Sale Spending / Cost / Authorization:

  • Cost is $400 per month or more (Somewhat Arbitrary Threshold Annual)
  • Deal Size 5K-100K or More
  • Sales Process is Multi-Step
  • Price Above One Level of Signoff Requires Orchestration

Buy Now Vs. Enterprise Sale Education Needed

  • Task Level Change
  • Job Level Change
  • Experimentation May Be Needed
  • Learning Curve Effects

Buy Now Vs. Enterprise Sale People & Relationships Affected

  • Job Boundaries
  • Process Changes
  • Group Boundaries
  • Contracts Between Firms
  • How Many People Must Change
    • Under One Manager
    • Under One Business Unit
    • Between Firms / Crosses Business Boundary

Buy Now Vs. Enterprise Sale Length of Decision Process

  • Sales Process is Multi-Step
  • Budget Cycles
  • Requires Focus Over Many Conversations Spanning Weeks to Months

Buy Now Vs. Enterprise Sale Enterprise Is A Complex Sale

  • Multiple Criteria: For User, Technical, and Business
  • “Try It, You Will Like It” Necessary But Not Sufficient
  • They Always Generate Options (Competition and Internal)

Customer Buying Process:

  1. Understand
  2. Believe
  3. Act

Example Enterprise Sales Process Typical Sales Funnel:

  1. Initial Conversation
  2. Qualifying Questions
  3. Demo
  4. Identify Champion, Equip to Sell
  5. Proposal
  6. Evaluation
  7. Acquire
  8. Keep / Proliferate

Common Problem: Your Product Requires Or Triggers Change

  • In Job Boundaries
  • In Important Processes
  • This Add Politics And Complexity
  • Do You Have A Champion?

Identify & Support Internal Champion

  • What Defines Them: “Nothing is more difficult to undertake, more perilous to conduct or more uncertain in its outcome, than to take the lead in introducing a new order of things.” Niccolo Machiavelli (1523)
  • How to Recognize Them:
    • Past Success At Firm At Least One Prior Technology Introduction
    • Current Sale: Can Map Path To Decision May Be Buyer Or Decision Maker
    • Understands Who Is The Decision Maker Probe
    • For Both: May Not Be Champion
  • How to Work With Them :“Identify a series of controllable opportunities of modest size that produce visible results and that can be gathered into synoptic solutions.” Karl Weick “Small Wins”
  • When You Need Them
    • If an individual needs to change their tasks or job, no champion needed just an early adopter
    • If a team or group needs to change process you need to convince manager or a champion
    • If business unit or firm needs to change a process, product, or service then you need an executive or a champion
  • What They Need From You
    • Visible Results
    • Benchmark Results Based On Their Data
    • Proposal Details Implementation Plan that Promises Specific Outcomes On A Timeline that is Predicated On Customer Inputs In Timeline
    • Help Document Pilot Project Results
    • Continue To Support Until Full Rollout
  • Why Use Them
    • Complex Change Is Political & Cultural
    • Need Someone Who Understands Unwritten Rules – How Things Work Inside Language & Culture
    • Leverage Their Expertise & Social Capital
    • Understands Decision Inputs & Process: Who Must Be Informed Or Consulted and Who Must Approve
  • Steve Blank’s Earlyvangelist Model Customer Validation Model  From “Four Steps To The Epiphany”
    1. Has a Critical Business Problem
    2. Know That They Have the Problem
    3. Actively Looking for a Solution
    4. Has Tried to Solve the Problem
    5. Unsatisfied with In-House or Custom Fix
    6. Has (Or Can Acquire) Budget
  • Steve Blank’s Customer Validation Model: Four Big Ideas
    • Goal: Build A Repeatable Sales Process; Orders Are Proof Your Process Is Working.
    • Only Earlyvangelists Are Crazy Enough To Buy Unfinished Product.
    • No Orders? Back To Discovery Process.
    • Early Customers Help Spec Version 2.

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