My Losing Battle with Enterprise Sales

https://lukekanies.com/my-losing-battle-with-enterprise-sales/

by aberoham • 7 years ago

338 53 7 years ago

jbmsf• 7 years ago

Rings true to me.

markbnj• 7 years ago

Great piece, and a lot of it rings very true, especially the part about managing warring subgroups within enterprise sales prospects. Back in the early 2ks a startup I cofounded to sell to huge banks (enterprise sales on steroids) did a deal with a marketing group at one of the largest US banks. IT was opposed, wanted to build internally, and we had many meetings like those described by the author. We did a 600k deal but behind the scenes the battle continued, and a couple of months after signing the IT guys won, the marketing guy who did the deal with us left the bank, our contract was bought out and we were sent packing.

matchagaucho• 7 years ago

"Our products were built to solve problems that big companies have."

That's really the crux of the challenge. Vendors like Atlassian can win over an enterprise one seat at a time, and co-exist with competing tools in other departments.

But a solution close the hardware, like Puppet, is a company-wide cultural decision. There's a propensity for the enterprise to choose one winner.

detaro• 7 years ago

Depends on the enterprise I'd guess? Yes if you have strict, centralized IT rules, not if your department has flexibility in running the stuff under its control.

bigbadgoose• 7 years ago

In saas enterprise sales there's much more focus on the post-sales lifecycle.

Because the model is recurring revenue, elastic with workforce, and up/cross-sell, there's huge focus on account management, service levels, and delivering actual value.

If those aren't getting to the customer, it's likely they didn't actually need your product, or … their product didn't need _you_.

ummonk• 7 years ago

Yes, this is why SaaS products are fundamentally just better than one-off sales products. It aligns incentives between the SaaS company and the customer.

mathattack2• 7 years ago

The SaaS vendors I’ve dealt with are pushing 2-3 year contracts due to churn fears.

jjeaff• 7 years ago

Exactly. And that contract will include a minimum number of seats in exchange for a "discount". So they don't have to worry about you hating it and downsizing.

parasubvert4• 7 years ago

This is why traditional enterprise software is increasingly being sold and valued like a SaaS. A lot of the latest SaaS IPOs (MuleSoft, Elastic, Pivotal, SolarWinds, DocuSign) derive a lot of their revenue from installable software. The economic model is annual subscription (with incentives for multi-year pre-pay) rather than big perpetual deal followed by 25% maintenance annually in perpetuity.

Wall Street likes this model, understands this model, and it's less prone to boom/bust and aggressive sales tactics.

The result has had a huge positive impact on making enterprise sales more driven on actual results rather than schmoozing. It leads to more sustainable, stable revenue for the software company that's directly tied to ongoing perception of value from the customer. The customer also in theory gets a LOT more attention from account teams and support than they otherwise would. Screw-ups or shelfware at worst lead to 1 year of revenue and hit the churn rate.

LaserToy• 7 years ago

I also lost couple battles with enterprise sales. Somebody makes a decision and engineering has to deal with it.

anoncoward1112• 7 years ago

Sales sucks. I have always preferred selling to consumers and handling support in a humane and friendly way.

I simply don't have the moral fibre in me to fuck someone out of their money like a "b2b" guy does, or car salesman does.

stupidcar2• 7 years ago

Sales does suck, but as the article says, enterprise sales aren't the way they are because the salespeople are necessarily immoral or trying to fuck anyone out of their money, they're the way they are because big companies need to be sold to in a particular way. When the buyer is not the user, and there are multiple departments and decision makers involved, you can't just rely on the quality of your product to win out. You can have a fantastic product that you know will help the customer immensely, and you still have to follow the enterprise sales process if you want to sell it.

anoncoward1112• 7 years ago

Agreed. The beautiful thing is that the power of creating anything is increasingly being put back into the hands of the consumer. We are rapidly approaching the point where anything you could ever want is buyable with the click of the button on Amazon or etc.

I am really glad the days are over where we used to have go negotiate with some sales guy to buy paper for the office :)

blihp• 7 years ago

The author sounds like they were confused as to who the customer is for Enterprise Sales. It's always the person / team who is paying for, not the person / team who is using your product or service. The companies that do well selling into political environments, which most large companies are, get an Executive on board who can navigate the environment / clear a path. So that Executive and whoever they tell you matters, who will probably never use your product, is the customer and who you work to keep happy. Sure, it helps if the product works and is good but sadly this isn't always a requirement. It's a very different and dysfunctional world compared to selling to small / mid-size companies where the customer often is the user where things are a bit more sane.

gk1• 7 years ago

As I say: Make the user want your product, make the buyer want to pay for it.

yesimahuman• 7 years ago

I didn’t quite follow the story arc at the end. Somehow Puppet is back to enterprise sales (i.e. it’s inevitable for a product like this), or are you rejecting it? Very timely for me so I’m trying to understand the point...

hurflmurfl• 7 years ago

I'm with you on this one. A very nice read on an interesting topic, but there seems to be no point to it?

Maybe it was meant as a sort of excursion into enterprise sales for people who have no idea on how those work and align with customer sales?

inthewoods• 7 years ago

The point at the end, I think, is that the money is too big to ignore, especially if you're on an VC-expected growth path.

gumby3• 7 years ago

On thing he didn't mention (but surely must know -- this guy clearly has the enterprise scars) is the importance of the "coach" at the customer.

He well describes the team of people that need to be involved in actually sending you a PO and payment(s): someone from purchasing, someone in middle management, possibly someone from legal, and the hapless folks who actually have to use your product. You never get them all in one room, which is probably a good thing.

The coach is the person who will get the deal done: they know the product is needed, they know who needs to be convinced, they can make the case, and they will sherpa you around to the appropriate stakeholders so you can make your pitch. Typically they are middle management for the people who will use the product, but they can also end up being someone who reports to the CTO or whomever.

Another key thing is go in at the right level. You might get an intro to the CEO, and she may end up convinced that your product is the greatest thing since sliced bread. That's unlikely to help: she'll come back from the week end and tell the GM of some division "hey, we should really be using that Foobartronix cloud solution!" and the GM will say "Wow, thanks, that's gonna make a huge difference to us" and then nothing will happen. You'll want to pitch the highest person responsible and no higher.

I once pitched our product the CEO of the Sony Computer Entertainment (Playstation). He was really interested and asked good questions and I assume forgot about us almost completely as soon as we had left the room. The importance of that meeting was that the other people who had decided to work with us (which happened in the blink of an eye...like 9 months) wanted him to know they'd found a good solution to a big problem. We were crucial, yet in an odd way irrelevant to that meeting.

stupidcar2• 7 years ago

And then after 6 months of effort, the coach moves to a different role or leaves, and suddenly the whole deal deflates like a balloon.

caust1c• 7 years ago

Yeah, but it's still a helluva lot easier with a Coach or a Champion than it is without.

gumby3• 7 years ago

Yep, been there, suffered under that.

barrkel• 7 years ago

Your champion may move to a different company doing a similar role and spread the religion there. I think this can go both ways.

KuhlMensch• 7 years ago

Nice addendum.

There is also a link between the nature of the proposal and the internal coach/champion: If its an opaque technical change? You will probably need someone on the ground. If the proposal is a transformation that involves making existing functions obsolete? That will need C-level clout.

avinium• 7 years ago

Great article and spot on for anyone who's ever dipped their toe into the waters of selling to enterprises.

It's a draining and frustrating experience.

The problem - as the author mentions - is that it can be so incredibly lucrative.

parasubvert4• 7 years ago

I used to hate enterprise sales, until I learned the most successful sales motions and sales teams are all about successful outcomes. If the product mostly does something value-able, and customer is taken care of, the money will come.

There are some sales processes/books that get into this (Insight Selling, Let's Get Real, Ninety-Five-Five etc.) and really can open your eyes as an engineer that there is an ethical, effective way to manage enterprise sales to solve user problems.

Luke mentions Bladelogic. I worked for BMC for a while, and it rings true to me that there was a night-and-day cultural split between sales and R&D. Sales at Bladelogic under John McMahon were maniacally customer focused, similar to Mark Cranney's approach at Opsware (he's now at Andreesen Horowitz). BMC was run by Bob Beauchamp for many years, the ultimate salesman, and for all the flaws of that company, for many, they really cared about customer success, which explained how they could maintain $2B in revenue with aging, middling products. They just never seemed to be able to reconcile the cultural divide between R&D (which did whatever it wanted), consulting (which also did what ever it wanted), and sales.

The difference between a consultant and sales is that the consultant gets paid by the hour, the sales person gets paid by the success of the customer, assuming the incentives are properly structured. These incentives are, for example: subscription software commission, with an emphasis on renewals (i.e. lower pay on 1 year bullshit deals), maintaining customer satisfaction, and consumption, i.e. customer actually using the software, not it sitting on the shelf, is a good proxy for "they're getting value out of it".

I also find that enterprise sales generally requires a fairly intensive free consulting engagement called a "proof of concept" (POC) usually 1-3 weeks of intense work and commitment of time from both the company and customer to enumerate all the technical risks/benefits of the software, and to run through every single one of them until the customer (a) feels the product does what it says on the tin (b) can work in their political and technical legacy environment.

Getting to a POC as the last step before negotiation & deal close is a major theme in large enterprise sales motions, as it forces a crucible: users (not just buyers) have to learn the software, and their concerns are directly aired.

Sometimes POCs are poorly scoped and drag on forever, or worse, are inconclusive leaving the deal in limbo for months or years. This is where the better enterprise sales teams shine, as they focus on what will make the customer successful and address the concerns from the administration team and users.

I wouldn't underestimate the cost/benefit of sales. Sales execs make $250k+ OTE and the best ones top $500k to $1M or more with accelerators, because they have to coordinate across customer teams AND internal teams (support, consulting, R&D, sales engineering, sales desk, legal, procurement, etc.). AND they have to be personable and social. It's a tough gig. Sales engineers OTOH have to be a bit of a sales person in soft skills but also know 20+ years of legacy technology and IT culture along with the deep technical innards of a product to properly sell, demo, and POC it. On top of that, a POC takes several of them them out of other customers for 1-3 weeks, which is like $50k or more of investment alone. And after the first deal, they're often continuing to demo, teach, make friends, provide white glove support, etc., to make sure the customer stays happy with the solution.

This is why enterprise software gets expensive, into the millions, all of this high-touch time adds up.

Enterprise sales isn't something to avoid, it's still the nature of engaging with a large complicated company, or the government, where most of the users or technical folks aren't necessarily focused on the market, or upleveling their skills, they're focused on their internal problems. They need someone from the outside to expose them to the new ideas.

We keep thinking some next generation of knowledge workers will fix this, that everyone will be self-starting, self-educating, and will buy things transactionally with low-medium touch... we thought it might be the case with Open Source, and it hasn't (the biggest OSS companies have large enterprise sales teams). we also thought it might be the case with SaaS companies (but they too have large teams).

softwaredoug• 7 years ago

The difference between a consultant and sales is that the consultant gets paid by the hour, the sales person gets paid by the success of the customer,

I like your attitude about sales, but as a consultant I can tell you I won’t be billing many hours unless I am constantly thinking about how every hour billed helps my client. Clients can tell you tomorrow in an hourly relationship to stop working, so just want to clarify by your definition consulting is constant “sales” (in the sense of proving you give real value for the investment)

parasubvert4• 7 years ago

Yeah, my statement was hyperbolic on purpose. The difference with sales is you can put in 300+ hours and still get no pay. Which is partly why prices need to be higher than an engineer would otherwise think reasonable.

On the other hand, consultants live and die by repeat business and reputation so it's not as far removed from software sales as I'm saying above.

A major ongoing debate in industry is whether self-supported OSS with consulting and full time employees is a better model (time/cost) than enterprise software. I think at worst you have pathological tendencies in either case: the software company wants you to use the unique features that keep you renewing and make it hard to switch, whereas the consultants want to build a factory that keeps billing/renewing and makes it hard to maintain.

drieddust• 7 years ago

This is not true always. Enterprise sales is also made by massaging the ego, or creating false sense of urgency (a 60% discount offer with an expiry deadline of 15 days ) of those who hold the purse and does not have common sense. I have seen millions spend this way.

These books probably portray humans as logical rational machines who will decided based on some rules. Emotions, alliances, and personal gains are more important to decision makers.

Luke mentions Bladelogic. I worked for BMC for a while, and it rings ……

This paragraph negates itself. If R&D and consulting did not listen to sales. How they were able to keep the customers happy. As a customer if I cannot get what I need in the product, sales will have to lie to me to make a sale.

The difference between a consultant and sales is that the consultant gets paid by the hour, the sales person gets paid by the success of the customer…...

This is becoming true with subscription models but there also sales pushes for muti-year deals with minimum spend. In my view, once the contract is signed sales just runs away leaving delivery guys to deal with the customer who expects what product can’t deliver. Any post-sales issue simply becomes delivery team’s problem, customer education etc.

I also find that enterprise sales generally requires a fairly intensive free consulting engagement called a "proof of concept" (POC) …………

This exercise provides a certain level of risk mitigation. However, requirements get modified to clear the POC because customer gets invited to dinner parties, conferences in vegas etc.

You are right this system exists for a reason and it can’t be fixed. However, its not all rosy and ethical. In most cases their is so much at stake that unethical behavior creeps in. It is just human behavior and that's the way it is going to remain.

ptx• 7 years ago

You got your response passages and quoted passages reversed.

https://en.wikipedia.org/wiki/Posting_style#Interleaved_styl...

parasubvert4• 7 years ago

This is not true always. Enterprise sales is also made by massaging the ego, or creating false sense of urgency (a 60% discount offer with an expiry deadline of 15 days ) of those who hold the purse and does not have common sense. I have seen millions spend this way.

Sure. That's not the most successful way though, IME.

These books probably portray humans as logical rational machines who will decided based on some rules. Emotions, alliances, and personal gains are more important to decision makers.

That's too categorical a statement. The books absolutely recognize those things, but are about providing techniques to rise above them. It's not always possible, but it's better for everyone if we can. It's also generally harder to maintain a politicized process when transparency is emphasized. I've seen senior customer executives give preference to a large vendor for emotional reasons or perception of personal gain (nobody every got fired for buying IBM), but were forced to change their minds when the transparent process built enough champions to surround them with enough facts that there was a better way. Not saying this is easy, just saying that it is possible to engage in politics in an ethical way.

This paragraph negates itself. If R&D and consulting did not listen to sales. How they were able to keep the customers happy. As a customer if I cannot get what I need in the product, sales will have to lie to me to make a sale.

Maybe, but that's not necessary and usually ineffective. Customers generally force the vendor to prove their claims and catch liars. The better way is when sales focuses on the strengths of the product that will have impact. No product is perfect, and all software has flaws. Lots of old software still gets used and sold because it has value in spite of its failings. Of course, this can't last. R&D needs to get its shit together, or the company will gradually lose customers.

This is becoming true with subscription models but there also sales pushes for muti-year deals with minimum spend. In my view, once the contract is signed sales just runs away leaving delivery guys to deal with the customer who expects what product can’t deliver. Any post-sales issue simply becomes delivery team’s problem, customer education etc.

Initial deals should not be multi-year, and if they are, that's definitely risky. Maybe the first renewal could be multi-year. Multi-year deals help both sides once they're in expansion mode and the product is installed, the initial post-sales services are complete, and people are getting value out of it. Lower locked in prices for higher term/volume means benefits and stability for both parties.

If sales runs away, that means their incentives are poorly structured and not aligned to consumption. It can happen, but it's bad business. I have a big chunk of my variable pay tied to consumption, not just initial sign up and renewal, which keeps me sticking around to keep an eye on post-sales engagements and on support tickets, along with keeping my relationships with the customer active. A massive chunk of my time (as a principal sales engineer that covers country-wide territory) is not spent on working new deals, it's working with existing customers to keep them successful, or I won't get paid on consumption through the year, or renewal when the time comes. And even if it's not for a large deal, there are times to bend over backwards for a small customer to preserve your reputation. I don't deny the bad behaviour, I just don't see it as very sustainable.

This exercise provides a certain level of risk mitigation. However, requirements get modified to clear the POC because customer gets invited to dinner parties, conferences in vegas etc.

Usually those invites are about building relationships, education, and trust. POC requirements tend to be a pretty transparent negotiation, if they're not, that's a problem. I can see cases where requirements are particularly onerous that there might be some give and take, but I don't see this as a ploy rather than an exercise in containing scope and risk. Like if a feature is young and buggy, why not say "this is young and buggy, are you really going to use this in year 1? Let's defer evaluating that.". That might disappoint someone who really values that feature in the customer, but it's also trying to be honest about a situation.

You are right this system exists for a reason and it can’t be fixed. However, its not all rosy and ethical. In most cases their is so much at stake that unethical behavior creeps in. It is just human behavior and that's the way it is going to remain.

You're absolutely right. I am painting a "best case" scenario above with the teams I've worked with. I have seen plenty of unethical behaviour by customers and vendors. I'm just trying to say, it's generally easier and leads to more success if you don't engage in that. All IMO.

remote_phone• 7 years ago

This is the most informed comment in the topic. Having spent a decade in enterprise software on the engineering side, everything he/she says is true.

lefstathiou• 7 years ago

I enjoyed this piece though some of the anecdotes felt apocryphal. Some broad thoughts on enterprise sales (been doing it for 5 years with tremendous coaching from my brother who has done it for 18):

I love love love the enterprise sale. It's complicated, strategic, psychological, time intensive, stressful and so many other things. Cunning, patience and integrity are key attributes that lead to success here and when you win, you win big. The key is to ensure this type of sale aligns with your temperament.

Years ago, a mentor gave me some advice (which I believe to be true): the key to selling to the enterprise is that you need to be known, liked and trusted.

To be known, you need to be getting in front of the key decision makers and influencers and build a real relationship with the long term in mind. There are no short cuts and salesman should not be writing an intro email or going into meeting 1 or 2 thinking (and pitching) like they will get the commitment on the spot. Skip steps and you lose the sale. It's a relationship that must be cultivated even after initial rejections. I can't count how many customers said "not at this time" that eventually came around to become large accounts.

To be liked, you need to be respectful, genuine and interested in them (not yourself). Find out who they are as people, what they value, what their goals are, their kids names. Ego is your enemy here. Read Dale Carnegie.

Trust is about integrity. You must believe in the product and the benefits you market must be realizable (that's not to say the customer will necessary place much value on those benefits). The moment trust is compromised, it's over (and not just for you, the company). It takes a sentence (perhaps just a word) to destroy a personal and company reputation.

Which goes back to the ultimate prerequisite (as mentioned in this article) of all enterprise solutions IMO - solve a problem that people care about.

mlthoughts2018• 7 years ago

““What does it matter what the customer thinks? They already bought the product.” Astoundingly, the CTO did not fire him on the spot, and instead just moved on, ignoring the comment entirely.”

The author lost a lot of credibility to me when I read that part, because it’s often critical for the life and success of a product to be skeptical of customer requests or feedback, especially bespoke custom work requests that come up all the time in enterprise sales. Your company wants to grow and needs the revenue, but accepting custom requests takes you off-strategy and often wastes resources on things that won’t generate value beyond one isolated sale / renewal.

The Recurly founder had a great quote about this, related to why Dropbox succeeded (by ignoring feature requests from customers and imposing their own vision if a simple interface, and only adding features later). It’s discussed here: < https://zurb.com/blog/don-t-add-features-to-make-customers-h... >.

Anyway, this author’s rants actually strike me like someone who doesn’t have a good sense about product design or product management.

ewams2• 7 years ago

All the comments and the story seem to be coming from people that have been around sales or briefly touched it but never been full in a sales position. It's definitely true that "enterprise" sales has a different sales cycle than commercial or smb. I've had seven and eight figure deals close faster than a small 6 figure deal. I also have found smaller organizations need much more care and feeding after the sale than larger companies. But of course this is not true for every organization or sale.

I empathize with his part on gear that sat there for years after the sale. Welcome to business, it happens everywhere. I've been on both the purchasing side and the selling side of it. Things just happen, just like we all mean to change the world or pick up a hobby but something else shiny gets in the way. But it's not a reason to give up on sales.

Politics are a part of everything. Engineers (or anyone) that refuse to accept this are just cutting their eyes out to spite their brain. If, on the sales side, you ignore the politics of the organization it is no wonder you struggle. The same is true for people in their own organization that can't get anything done, don't get promoted, or can't make friends.

Sales sucks. When you spend days, weeks, months, even years on a deal and you don't win you get nothing. Sometimes you even lose your job. Sales is expensive in more ways than just money or time and it is not for everyone.

I enjoyed reading your piece but the negativity in it is from frustration at lack of understanding. Just because you are not good at something does not mean it is bad or evil. I love basketball, but I am horrible at it, so I know realistically I will never be in the NBA. But because I do know what goes in to it I can truly respect those people that do. You can learn from others for things you are not good it, but why kid yourself? Focus what you are good at and become even better.

Michael Jordan was an amazing athlete, totally dominating basketball. He tried his hand at baseball and did decently but realized being just "decent" at it was all he would probably be and went back to what he excelled in, basketball.

I need to finish my book on sales and consulting geared towards engineers.

EGreg2• 7 years ago

Any chapters done yet, that we could read?

ewams2• 7 years ago

Just in a poorly formatted word doc currently. I'd be happy to contact you when its closer. Thanks for asking!

ziont• 7 years ago

modern day enterprise sales is essentially providing free consulting work.

RyanShook• 7 years ago

I understand enterprise sales to be a necessary evil but man it is annoying when I want to try a service or software but have to talk to a sales rep before being able to test out the product.

confiscate2• 7 years ago

ya but that sounds like you are not the target audience.

Most of the time in enterprise sales, the potential customer is too busy to try software himself. Learning a new piece of software takes a lot of time and effort.

Unless you are a techie, it's easier to just have salespeople do the work of walking you through quick demos. Or have someone junior at your own company, take care of the "dirty work" of figuring out new software and tell you the results. It sounds like you are that junior person at your company :)

thirdsun• 7 years ago

Most of the time in enterprise sales, the potential customer is too busy to try software himself. Learning a new piece of software takes a lot of time and effort.

That's exactly why I want to deep dive into specifics and see the product in action and detail on my own, without a sales person behind my back.

I understand that there are customers that need the guidance, but please make it optional. For me it's just an additional barrier that will most likely result in me not considering the product at all.

voiper1• 7 years ago

Always listen to what customers tell you, but never do what they say.

Great line.

bernardlunn• 7 years ago

Speaking as somebody who used to lead enterprise sales teams, my take is a) the company did not know how to do enterprise sales properly b) they raised far too much capital. If you bootstrap (most great enterprise software companies were bootstrapped) you cannot afford to deviate too far from customer needs.

lucio• 7 years ago

beautiful.

briancl• 7 years ago

Enterprise software sales has changed dramatically in the last 10 years, largely due to the shift to SaaS and the shifting strategy from land big to land fast.

If you look around the younger generation succeeding in enterprise sales, you'll find that many come from a far more technical background. Maybe they transitioned via sales engineering roles first, but the next generation of field sales reps often have real world experience to apply in a consultative sales process.

The days of closing deals over steak dinners or on the golf course are over. Providing real business value in the short term during a quick POC is a must-have. Delivering on real business objectives over the first 6-12 months to ensure the expansion is too.

Some of the old guard, at least the ones that are any good, have adapted. A lot of the old skills are still useful for building relationships and trust. Being able to manage complex organizational challenges that getting more and more complex is an asset as well.

My Losing Battle with Enterprise Sales

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