Nine Aspects To Consider Before Your SaaS Product Is Ready For An Enterprise Sale

Your SaaS product is ready. It is competitively superior to any product existent in the current market space and you are now dreaming of getting those big ticket enterprises who will get you the volume, profits, growth and recognition that you and your team has worked for. But before you start contacting enterprises, have you assessed whether you are ready for the enterprise sale? The following nine aspects will perhaps help put enterprise sales into perspective:

1) Enterprises won't try you until you have proved success

• It is often a chicken and egg problem where one enterprise won't try your product until another enterprise has tried the same. Because if you were good enough to be chosen by one, the others will be assured of your abilities.
• If you are a SaaS company with sizable traction, the enterprises will take that as an indicator that you will still be on the face of this earth five years from now. This is important to enterprises because one of the reasons large enterprise clients like to use other large enterprises' SaaS products is that they know the vendors have proven expertise and maturity, will be able to support their employees in every possible manner and can atleast be assured that the company will be existent atleast for the foreseeable future.
• It is best to gain traction with as many small and medium sized enterprises as you can. With those in your client list, you know you would have weeded out most of your product and customer issues before approaching the big one. And that is what the enterprise would take a sign of a stable product that will not disrupt their day-to-day business in any manner.
• Keep your SMB happy. Since they may also directly work with big enterprises (one of them could be a supplier / vendor!), the happy ones can oblige and get you those uber-important referrals / warm introductions / word - of -mouth to the right people inside the enterprises.

2) Trials or freemium models may not be useful

SaaS companies offer trials or freemium models so that their products can help their prospects try out their applications. In most cases, it is needed and important. But for enterprises, it may not be the best approach. Why?

• Enterprise employees may not be at liberty to try new software solutions before their internal IT teams approve of it.
• The employees would have to put in extra efforts to try the software to see if it actually works for them or not. Not all employees have the drive, authority or time to do so out of their daily schedules. Moreover, until there is a mandate from the higher management, many would not want to take something into their hands and "waste" their time if they assume that their management is never going to approve this.
• Because your usual 2-3 tier pricing plans are usually not setup for volume discounts, enterprises' purchase managers will need to get a deal out of your sales teams.

So start forming a sales team when you see some traction starting to happen and your start hitting around 50% of your revenue targets in your first year.

3) Be setup for longer sales cycles

Selling to enterprises is long, tricky, and nerve wracking. But absolutely rewarding, if patience is ingrained as a virtue!

• Sales cycles in enterprises can last upto 18 months sometimes.
• Decision making happens across the hierarchy and functions with all the intra-organizational politics involved.
• Organizations need to assess IT risk, which takes time, before they move to adopt any such tools.
• You will iterate through several product versions before the sale is made. Yes, thats the best thing about SaaS!

So what do you do?

• Make diligent use of a CRM to keep a track of all touches that happens with every person in the enterprise throughout the entire process.
• Try entering into more than one enterprise at the same time (perhaps two). It is easier said than done. Your good progress with one can be shared with the relevant people at the other one to try move things along, should there be an impasse.
• Ensure marketing teams are able to engage humans inside the enterprise through their usual channels. Yes, enterprises are made up of people and they do have lives and connectivity outside of the organization. Try to get as many eyeballs from employees of this enterprise.
• Keep the key people abreast of every feature being developed and get them to be part of your customer-driven development, although they are technically still not your customers.

4) Use your and your employees' network to land the first enterprise

• Do remember that it is not just the sales people who have business networks.
• All employees are likely to have one or more people in their close network probably working at a large enterprise on your target list. An introduction always helps! Always! While cold calls and emails would be ok to turn up some enterprise leads, success rates with introductions are much higher.
• If IT isn't restrictive, try to use that network to help penetrate the lower tiers of the enterprise, one team or department at a time. Word would spread internally and find internal champions to further the product awareness. This will eventually get you your first meeting with the decision maker!

5) Be setup for customization and on-premise installations

You may be willing to customize but may not be ready for it.

• Your technology architecture must support customization in terms of speed, scale, and ease.
• Customization means that you will be required to maintain differing versions for each enterprise that you land as well as maintain versions for your usual non-enterprise users.
• Enterprise management is paranoid about IT security. Not that SMBs are not but enterprise would be willing to spends millions to appease their insecurities. So although cloud technologies and infrastructure have come a long way, you may still be required to have an architecture where your product should work on the enterprise's own servers or private cloud.

So what do you do?

• Have a large enough team (software development and customer success) to be able to handle requests from such enterprises.
• Maybe split your initial development team into a core product development team and a customization / project team. The core team handles the key features of the product while the customization / project team is each formed for every enterprise you land and they dedicatedly support customization of the product. But it takes a very diligent program and product management team to ensure that product performance and customer experience does not deteriorate due to the differing and competing priorities between core and customization teams.
• In addition to having architectural support for on-premise deployment, you need to have a team structure in place which can support the enterprise without being an additional IT burden.

6) Have you made switching to your product stress-free?

Despite unique value propositions, your product may not be the first one in the world. Since almost every company wants an enterprise client with them, guess who will be on the target list of all your competing SaaS products? So if the enterprise is already using your competitor's software then what do you do?

• The most important thing to do is devise ways in which switching costs and burden are lowered considerably.
• Think data migration. Is your SaaS product, tech team and customer success team is capable of handling migration of the enterprise's business data into your product?
• Does your team know the best possible ways to run a pilot program inside a non-core business department of the enterprise?
• Do you have a full and complete API that can be used by internal IT or external consultants to make integration tools to ease the switching burden?
• You may wish that the entire enterprise will use your product only. But in reality, you may have to coexist with your competition inside a single enterprise because of vendor lock-in fears, switching costs from an earlier product etc. So healthy coopetition with an API-led bridge between your SaaS product and your competition will mean a win-win-win and longer term revenues.

7) Appoint a legal expert or firm that deals with technology related matters

This not to protect yourself in a lawsuit against a mighty enterprise. Although, God save you if a mighty enterprise decides to file one against you. It is because enterprises will make you enter into several kinds of agreements and your legal team should be able to protect your interests at all times, in line with your business strategy and vision.

8) Make or Buy?

Large enterprises often debate and discuss whether to make or buy an IT product. IT may not be the core business of the enterprise but it is no longer considered a cost center or an afterthought. So,

• You will face competition in sales not only from your direct competition but also from the software development services companies offering to make a highly customized product similar to yours.
• Keep in mind that if your product is going to affect their core business, they will be more inclined to "make" something over which they can have control and gives them a competitive advantage rather than "buy" a product over which they do not have any control and can be used by their competition as well.
• But why on earth would an enterprise spend money on making a highly-customized cloud-based product that is tailored completely to their organization and would give a huge competitive advantage over their competition? Would they rather not buy a SaaS product and then customize it to their needs in order to save time, costs and efforts? Having already been part of a failed, multi-million, "make" technology project and already seeing how a subsequent decision to buy and customize is working terribly, all I can say is it depends! 

8) Be ready that your first enterprise sale may not be profitable

So you have successfully considered all aspects above and gone past every obstacle to get your first enterprise success! You have worked hard, spent a lot of money and efforts in acquiring the customer and have deservedly celebrated the same. 

But are you prepared to know that your first enterprise sale may not turn out to be profitable?

• Your support and training costs will be higher than anticipated.
• Your product may be completely bug-free but it will face customer-led issues. Your customer success team will work 3 times as hard to get users within the organization to adopt the tool. If adoption is glitch-free and the tool starts to get used within the organization as envisioned, only then will your client see the value and benefits that you touted. Only then will they choose to remain with you in the next year.
• Enterprises will have much seasoned negotiators who may give your sales people a run for their money and eventually result in a lower per seat price than you would like to have.
• If the enterprise was trying your product, chances are that they were trying others too. So bidding wars between you and your competition started by the enterprise purchase managers will likely affect your profits.
• You will be going out of your way to please your first enterprise customer. Be it customization, deal price, etc. Not that other SMB customers can be ignored but yes, you will probably focus on your first enterprise customer at the cost of some SMB attention.

All of the above will end up costing you money that had not been factored into your first deal's pricing and terms! But in the longer term, your first enterprise success, if sustained tactfully, will probably your ticket to other enterprises.

So go make your SaaS product ready for the enterprise!