In the last episode with Greg Poirier, we discussed his career journey and three traits of a strong leader. In today’s episode, we’re going to discuss what the enterprise sales model is and how our companies can switch over to this model.
According to Lighter Capital, “Enterprise sales, also known as complex sales, refers to the procurement of large contracts that typically involve long sales cycles, multiple decision-makers, and a higher level of risk than traditional sales.”
To better understand it, we can compare it to the self-service sales model, opposite of the enterprise sales model. A self-service sales model is a model in which customers can make decisions and purchases by themselves without requiring assistance from anyone on our team. This requires very little commitment and risk from our customers.
On the other hand, enterprise sales require direct communication with our customers over a long period of time and include much greater risk. Enterprise sales require a greater commitment from our customers since they are often signing up for a year contract or for a subscription-based on a recurring revenue model.
An enterprise sales model focuses on long-term relationships rather than a single transaction. While customer acquisition often takes longer, this model can increase the growth rate for our businesses, build customer loyalty, provide an opportunity for bigger sales, and increase recurring revenue.
How to Switch to Enterprise Sales
Greg explained that “some [companies] are better able to [switch to enterprise sales] than others. A lot of it depends on the culture of the organization and their willingness and ability to suffer short-term costs in order to pursue that long-term game.” So, how do we switch to an enterprise sales model?
1. Achieve Product-Market Fit
Before we switch to an enterprise sales model, we want to make sure our product or service satisfies strong market demand. We want to make sure there are customers who really want our products before we try to convince them to make a bigger commitment with us and take an even greater risk.
Greg explained that the biggest indicator of achieving product-market fit is when a large portion of our salespeople are migrating to taking orders. “A lot of people are coming to the website, and they’re filling out a form, and they’re asking to speak to sales, and that’s usually a very good indicator that you’ve hit product-market fit,” Greg said.
2. Be Customer-Centric
“You have to be really customer-centric,” Greg said. If we want to maintain a long-term relationship with our customers to make those bigger sales and gain recurring revenue, we need to constantly be focused on the customer. What are their needs? What are their wants? What can we do to help solve their problems? We will dive deeper into this below, in the section, “2 Important Strategies to Stay Customer-Centric.”
3. Have Patience
As we explained before, enterprise sales focuses on long-term relationships. It will take more time and effort to gain customers and maintain our relationships with them. When switching to an enterprise sales model, we need to understand that it could take 12 months to gain a customer. We need to remember that we are focused on long-term success, not short-term.
4. Get the Team Unified and Committed
We need to have strong leadership, sales, and marketing teams in order to effectively implement enterprise sales. Part of this means making sure everyone understands the bigger picture. We all need to be on the same page.
Greg explained that at the beginning, most team members will be nodding their heads because they want these six- and seven-figure deals. They say they understand it will take a long time before we see a win and understand that it will come with a lot of rejection, but the commitment they make often dissipates very quickly. Patience and endurance within the teams often dissipate quickly.
Greg says this happens typically around six months, so he suggests to his clients that they have their leadership teams sign a letter in the beginning.
“Have the leadership team sign a letter that says, ‘We understand we’re not going to see the dividends from this event investment for at least 12 months. Yes, we understand that there’s going to be all these costs and this is what they look like. And yes, we understand that in about six months we’re going to start asking hard questions and we’ll have lost our patience,’” Greg said.
He continued, “We recommend that you go through this exercise and get them to commit to that. That letter may never be pulled out and looked at, but it does make a meaningful difference.”
5. Understand Our Finances
One of the biggest challenges of enterprise sales is simply not understanding what works and doesn’t work. Revenue can feel unpredictable, especially when it takes months to convert a customer and get them to sign a deal.
In order to focus so heavily on long-term customer relationships, we need to make sure we have the finances to sustain ourselves in the short term first. Part of this means having a great finance team who can keep track of our expenses and revenue.
Greg explained that it is very important to be able to predict how much revenue our company will be able to bring in by the end of the quarter.
“Getting that ability to have that pipeline counsel, that forecasting machine, that ability to understand where the pipeline is weak, is really key, and it’s an area that most companies going upmarket are very soft in. But it’s really important in the context of how much that size of those deals is going to sway the revenue number from one quarter to the next, especially if you look at opportunities that close,” Greg said.
2 Important Strategies to Help Stay Customer-Centric
In addition to the five tips above on how to switch over to enterprise sales, we should also consider these two strategies to help us stay customer-centric and maintain long-term customer relationships.
“The buyer is just so much more sophisticated,” Greg explained. “There’s a lot of data showing how much more information the buyer has gathered, how much they know about you, how much they know about what they need. . . . Unfortunately, it makes it much more difficult to tell your own story and get in front of the customer and shape or educate and broaden the solution they’re looking for.”
Our customers will likely know a lot about us before we even get a chance to market directly to them. With the internet, customers can learn about our company without ever going to our company website. This is where credibility marketing comes in. If our customers aren’t learning about our business from us, they are learning about it from other people. Greg suggested we use customer testimonials, stories, reviews, and case studies to build our credibility and get to our audience indirectly.
Since enterprise sales are so customer-focused, customer reviews and testimonials are a smart way to get to our customers without pestering them while maintaining our credibility.
The biggest barrier to customer reviews is simply us not wanting to ask. We just have to get the courage to ask our customers for their feedback. However, there are ways in which we can ask which will increase our chances of gaining a response. Greg explained that the right approach to asking a customer for feedback is to frame it as something beneficial to them. What’s in it for them?
“It’s not, ‘Hey, can you do me a favor?’ That’s the wrong approach. The right approach is, ‘Hey, you’ve come up with a sophisticated way to solve this problem in your organization. You planned it out well, you deployed it well and now you’re using our product very successfully. That’s a testimony to how smart you are. Let us give you a platform where we can promote and talk about how amazing a job you did.’ If you go into it with that mindset, you’re likely to get a much better product at the end,” Greg said.
For example, an employee at a large food company had a big idea to start using one of Greg’s platforms to help the company he worked at. He had such great success that Greg reached out to him, and asked him to share his success with the platform at an event. They brought him on stage so he could share his story. This benefited both the employee and Greg. Greg internally gained amounts of credibility while the employee and food company also got credibility.
Recurring revenue is a great way to earn money, but it is also a great way to force us to constantly focus on our customers.
The culture of a company with a recurring revenue model is different because they want to keep their customers happy all the time. They become a lot more customer-focused since they want to get their customers to keep their subscription with their service or product.
The company has to keep their clients happy every month since the customers are paying them every month. It forces their company to deliver better products.
“We want to have much longer, more in-depth relationships with our clients,” Greg said. By using recurring revenue methods, forces us in a way to make sure we keep those relationships up constantly.
Thank you so much Greg for sharing your stories and insights with us today. Here are some of my key takeaways from this episode:
- An enterprise sales model focuses on long-term relationships rather than a single transaction.
- Before we switch to an enterprise sales model, we want to make sure our product or service satisfies strong market demand.
- We need to be very customer-centric.
- Enterprise sales takes a lot of patience.
- We should make sure our team is committed to our goals at the beginning and make sure they know how long the transition process can take.
- While revenue within an enterprise sales model can be very unpredictable in the beginning, it’s really important to know how much the size of deals is going to sway the revenue number from one quarter to the next.
- We can use customer testimonials, stories, reviews, and case studies to build our credibility and get to our audience indirectly.
- Recurring revenue helps us stay customer-centric since we want to keep our clients happy every month since they are paying us every month.
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