6 Ways To Sell To Big Companies If You're A Start-up.
AYDIN MIRZEE is the co-founder and the Co-CEO of Chide.it, a software company that empowers intelligent decisions and the creators of FluidSurveys.com and ReviewRo
When founding a startup, everyone involved gets used to being told “no”. They are told no for their ideas, for funding and for sales. There are two ways to react to no, either get discouraged and give up, or realize that eventually there will be a “yes” and continue working towards that end goal.
The successful startups are those that both persevere through discouragement and try something different. A great quote by Richard Branson goes: “You don't learn to walk by following rules. You learn by doing, and by falling over.” In which case, stepping out of a comfort zone and doing things that others might not, is the thing that can lead to success.
This was the case for me as the CEO of FluidSurveys.com. Founded in 2008, FluidSurveys is a leading online survey tool and form builder. At the time of launch, there were already thousands of survey tools available on the market, including the well-known market leader SurveyMonkey.
Despite the barriers we faced, it is now one of the top survey software providers in Canada and is used in over 50 countries and by large organizations including government, educational institutions and Fortune 500 companies. It was our ability to sell to large organizations that contributed to FluidSurveys’ success in the early days.
Here are six lessons I learned along the way:
1. Get Customer Testimonials Early On
Most of the time, large organizations are skeptical about buying from a startup for a number of reasons. Validation is the best way to get around this issue. Getting positive testimonials from beta customers who were involved in the product development phase and presenting it to large potential clients is an excellent way to validate the product and the company.
2. Try a Pilot Project
Pilot projects are popular with large organizations. FluidSurveys regularly performs pilot projects with large organization and has had successful sales as a result. “Get the targeted organization on a reduced rate pilot project and have them use your product for 6 months to a year. After that, why wouldn’t they buy from us instead of the competition? They are already familiar with us and our work at that point.”
Essentially you want to have the company use you on a smaller scale first, which is a small step towards the goal of establishing a strong relationship. From there, they are comfortable with the product and they will be able to move to using the product on a large scale, and the big steps will be much easier.
3. Understand the Buying Process
With large organizations, the product user will not necessarily be the purchaser. In Business-to-Business sales especially, there are almost always several people to consider in the buying process: initiators, users, influencers, gatekeepers, and deciders.
When contacting a company, try to understand who your main contact is. While they may not be the decision maker, they could play an incredibly important role in whether or not your product is purchased.
Another important point to consider is the buying timeline your customer may be on. Consider if they will be more likely to purchase at a particular time of year and how long the process may take.
4. Pitch to as Many People as You Can
As a general rule, the product should not be pitched to just one person. Because there are a number of people involved in making decisions, if they can hear the pitch from you, you can be confident they received the right information
Tip: Avoid talking about price until the key purchasers are present. Rough numbers are fine but the final quote should be given after the full presentation.
With FluidSurveys.com, I would often have to speak to not only the people within the company that make the buying decisions, but also the managers of the IT department. The reason for this is because large organizations are interested in central management: the ability to control the product themselves instead of having you come into the company. In the case of FluidSurveys.com, the IT department was an influencer in the buying decision since they had expertise with software products.
5. Consider Tiered Pricing
The way that the product is priced is another key component in landing sales with large organizations. The concern is always pricing too high vs. too low. If you’re priced too high, you might lose a bid to the competition. If you’re priced too low, prospects may not value the product. So what do you do?
My advice is to implement tiered pricing. Tiered pricing tends to work best for large organizations because their requirements may vary. For example, access for the first 100 users may cost $200/year and the next 100 users may cost $150/year. This is applicable to all sorts of products, not only software. You have to give the impression that you are not coming up with pricing on the spot and keep in mind that large organizations need all the numbers to plan for budgetary concerns. Prepare this information before you initiate a conversation with a potential client.
6. Address the Bankruptcy Concern
One last hurdle for startups to jump is the bankruptcy concern. Large organizations tend to worry about what would happen to their data in the event that the startup should go bankrupt, or has other financial issues. The best way to reassure these enterprises is to have good measures in place in the event that bankruptcy does happen, and be able to easily explain them to large organizations.
The most favorable way to alleviate these concerns from organizations is to give them the ability to download all of their data at any time or keep all of the data (and possibly the software itself) with a 3rd party (this is called escrow). The agreement and the conditions for the release of that data would then depend on the end situation.
In the end, the key is to be able to answer every question that big customers have. Better yet, covering their concerns before they even ask is a sales tactic that demonstrates your previous experience in working with other large organizations.
These sales tips for selling to large organizations have helped us at FluidSurveys.com more than double in staff, users and revenue in the past 6 months.