Introduction

In the past two decades the licensing business model clearly gained a lot in popularity and became the standard way to do business in the B2B world.

There are now more software-as-a-service (SaaS) companies than ever before, be it in HR, marketing, finance, project management, you name it.

Major companies shifted from legacy products generating perpetual revenue to cloud hosted solutions generating recurring revenue (think Pack Office, Sage, Adobe).

It has become so popular that large corporations can use up to 250 different SaaS, and sometimes even more.

The rapid growth in SaaS adoption by big corporations brought some issues along the way.

Firstly, a visibility problem, each business unit or department has its own SaaS and it is difficult for the IT administration of your company to know whether all the licenses the company is paying for are used to their maximum.

Secondly, as access management is often managed within the SaaS, there are lots of shadow licenses, meaning employees that left the company but are still able to access the company’s resources as their access has not been removed. This causes major security threats and is also a waste of money for the company.

Fortunately, over the past few years, SaaS governance companies like Beamy emerged, allowing companies to track all the SaaS they are using, to improve budget allocation and security.

As a founder, your SaaS solution is usually firstly used by a small group of tech savvy early adopters, that allows you to have feedback and iterate on your product. Hopefully, your users love using your app, and you start having product market fit. Thanks to word of mouth and sales efforts, you are then starting to have a few paying customers that allow you to fundraise, hire great talents and consolidate your product. At some point, your product becomes robust enough that it might convince bigger, and Enterprise clients to buy it.

Everything is awesome and so simple, right?

In reality, crossing this border from early adopters to Enterprise customers is no easy task.

Why should you sell to Enterprise clients?

There are many reasons why you should make selling to large companies a priority:

• Product differentiation: building an Enterprise version of your software will enable you to cover more needs and to have a new competitive edge regarding competitors on the market. As your software covers more needs, you will also increase your total addressable markets and the barriers to entry will be higher.
• Less churn: Being a SaaS company the churn is one of the key metrics you need to track. Too much churn will eventually kill your SaaS company. Enterprise customers are less likely to churn and have much better net dollar retention.
• Faster revenue growth: Enterprise deals are much bigger contracts and this will allow you to lengthen your runway, to be cash flow positive quicker, and less dependent on VCs capital.

If you are not ready fast enough to sign Enterprise deals, you will basically educate and evangelize the whole market with an innovative product, but a competitor can appear on the market and capture the lucrative Enterprise segment. You have done all the work that has made it possible (think Slack vs. Microsoft Teams) but a competitor is getting free lunch.

What makes it hard?

Selling to Enterprise clients is much different than selling to SMBs. Let’s discover the main key challenges you will face when selling to large accounts:

• Longer sales cycles: building an Enterprise feature will likely require your company to do some research with your client to make sure that what you will build corresponds to their needs. This time is likely not invoiced and this feature might be a one-off.
• Time consuming: Enterprise features take a lot of time to build. However, they are not part of the core value proposition of your business and fill your developers’ roadmap.
• Developers would rather code something else: Usually when building Enterprise features your developers will have to deal with legacy technology and not the latest technologies that they love.
• Bugs: your Enterprise client will likely require a lot of small details and customization, that will increase the area for bugs therefore maintenance costs.
• Your buyer is no longer the user: selling to Enterprise is basically a shift of paradigm in which the buyer of your solution is no longer the end user (it is now maybe the CISO or the CTO).

In addition to the above, Enterprise clients typically have several persons involved in the buying decision, with well defined (and slow) buying processes, and are more looking for a long-term fit rather than quick results (unlike SMBs).

How to sell to Enterprise clients?

As we have just seen, by moving upmarket the buyer (which is now the CISO or the CTO) of your solution is no longer the user.

You will have a new mindset that you will have to deal with, and new objections that you and your sales will need to cover.

So what do you need to do to get the approval of this new category of buyer?

CISOs or CTOs generally have the same type of requirements:

• Visibility on your app: one way to give your client’s IT Admin visibility on what is happening within your app is to provide them with audit logs.
• Control: to allow them to have control over what happens on your software, you will need to allow log-ins on your SaaS with the credentials of their Identity Provider (IdP), in other words, single sign-on connection (SSO).
• Trust: as every human, CISOs and CTOs need trust to do business with someone. Trust comes in various forms and shapes.

Conclusion

Of course it takes more than this to fully fulfill all the expectations of large accounts, you could also add analytics on the usage of your app, a proper invoicing process, integrations (APIs) and so on.

Enterprise sales are challenging as they take time and involve several interlocutors.

However, if you are ready soon enough to sell to them, you will be able to 10x your revenues compared to your self-service application.