This answer would be useful primarily for young SaaS Entrepreneurs, or those who want to build a company in Enterprise SaaS.
At Cogno AI, we work with a lot of large Financial Institutions as our Clients. When I say large, I mean really large — think of companies with over 100,000 employees and over $50 Billion in market cap — yes, that’s how big ICICI Bank is.
ICICI Bank is not just our client, but also one of our oldest clients. We have been working with them for over 3 years now. I am sure reading this, you’d have many questions in mind:
- How did you acquire them?
- Who did you sell to within such a large company?
- How did you manage data security?
- How long did it take you to convert ICICI Bank into a paying customer?
- What is the contract size?
- What is the pricing model?
- How do you grow the account?
- How do you retain them?
And many others.
I’d say, relax. Let’s take a step back and structure things a bit. Before we delve into — “How did you acquire such a large client?”, let’s first understand how a large enterprise works.
Structure of a Large Enterprise
When selling to such large enterprises, there are several stakeholders involved. You need to first understand who all are involved and only then would you be able to navigate within them for closing a deal.
I will talk about a Financial Institution since that’s where we at Cogno AI have specialized so far. Other large enterprises are quite similar.
So, in a typical Financial Institution, one has to deal with 6 stakeholders in the Sales cycle:
Business Team
This is the main sponsor of your product within the organization. They are the ones who really need your product. They are your actual buyers. The rest other buyers are more on the support side. Make sure that you have a rock-solid business case to put forward in front of the Business Team.
In a typical Financial Institution, the Business Team could be the Savings Account Team, or the Credit Card Team, or Personal Loans Team. These teams in some way bring revenue to the table and therefore, they often have big budgets to grow that revenue.
Remember, keep your focus on helping the Business Teams grow their business (revenue), and cracking them should be a breeze. When meeting the Business Teams, the biggest selling point is often the case study of the success of your solution in a similar-sized organization.
Information Technology (IT) Team
If your solution is a SaaS-driven solution, you’d have to speak with the IT Team as well. They are the ones who will do the Project Management and Delivery with your Operations/Delivery Team. The Business Teams are often too busy with their monthly/quarterly targets and so, the task of implementing your solution within the organization is given to the IT Team.
IT team will often get into the depth of your product’s architecture, data flow, integration aspects, ease of use, etc. Keep the associated documents ready. In a large enterprise, you often face the challenge of them asking you to deploy your software within their premise (on-premise deployment). I will get to that in a later section in this article.
Broadly speaking, go for the cloud to save your time. On-premise deployments are a nightmare.
Coming back to the main point — keep documentation ready:
- Architecture Diagram
- Cloud Service Provider Details
- Data flow
- Firewall and port opening required
- APIs you provide
- APIs you need from them
- Detailed Project Implementation Plan (Gantt Chart)
These documents are extremely important and they are the bare minimum ones that you will have to provide to the IT Team to convince them of your capabilities. They need to have these supporting documents for IT Audit records.
Apart from these documents, you may need to provide the support mechanism, product user manual, etc. Be ready to provide some custom documents that the IT Team may ask. You may also have to get on a call with someone from their IT Team to walk through the documentation you’ve shared. They may have some questions on the fly, and therefore, make sure that you bring along someone from your Engineering Team with you.
Information Security (InfoSec) Team
In a Financial Institution, they’re often the ones that are most difficult to crack. They will grill you left-right-and-center on various Information Security aspects. They will force you to deploy on-premise. They will ask you for all sorts of Security Controls that you’ve implemented in your Product to make it compliant with their ecosystem.
They may even ask you to make changes in your architecture and IT Infrastructure — don’t use MySQL, use Oracle Database because they’ve purchased licenses of the same. Don’t use Nginx Web Server because they have procured IBM WebSphere.
For you, it might be quite tempting to agree to the same because the client is putting a $50k — $100k cheque on the table. Avoid it. Really, avoid it, because soon you’d see yourself becoming a custom IT shop. Accommodate whatever your product supports. Accommodate for the first 5 customers so that you can get a foot in the door. But after that, be rigid in your approach, or else, you’re going to soon see yourself becoming an IT Services company.
Apart from the above details, the InfoSec Team may want to conduct a third-party security assessment of your product. They will share a long excel of 300 line items and will ask you to fill the same. Then, a third-party auditor would be appointed to check if your team is complying with all these 300 line items or not.
These line items could range from how you give server access to your developers, to your work from home policy to the mechanism in which you store employee biometric data. It often gets really tedious. But, I guess, that’s the cost of working with a large enterprise.
When in Rome, behave like Romans. When working with large enterprises, you need to present yourself as “compliant” as them.
Legal Team
The Legal team will usually ask you for 2 things:
- A Non-Disclosure Agreement (NDA): make sure that the NDA you sign is a bidirectional NDA. This means that it is not just you who is supposed to keep the client’s information confidential. But the client also should keep your information confidential. What information? Your pricing! Remember, that people move around and change companies.
- Service Level Agreement: SLAs usually would be really long and contain some nasty clauses including penalties for non-performance and uncapped liability on you for something going wrong. I’d suggest that if you’re going to work with a lot of enterprise clients, hire a lawyer to vet these agreements for you. If you can’t hire on a retainer, hire on a “per-agreement” basis. We take services from Shivendra from SS Law and he’s damn good!
Here are a few suggestions from my side to ensure that you don’t end up signing something that bites you back:
- The client should maintain the confidentiality of data in terms of documents, proposals, etc.
- All invoices are to be approved within 7 calendar days of sending them over email. If not, invoices would be deemed to be approved.
- All invoices are to be paid within 30 calendar days of the date of approval. If not, there would be a penalty of 0.05% per day.
- Source code and intellectual property solely belong to you, since this is a SaaS-based solution.
- Exclusivity should not be given to any client under any circumstances.
- The Indemnity on you should be capped to 100% of the contract amount. Indemnity is applicable only for Software or Service-related issues directly attributable to your solution. No indemnity is applicable to Directors or any of your team members.
- The client can audit (servers, contracts, etc.) with 3 days of notice, provided the cost of the audit is borne by the client.
- The notice period for termination — 60 days from both sides.
These are just some of the clauses that we make sure to put into our agreements.
Procurement Team
Large companies often have specialized procurement teams whose job is solely to negotiate with you and bring down your price to a minimum. Procurement folks are tricky to handle and will often ask you to give at one-tenth (1/10th) of the price you’ve quoted, stating that there are other vendors who are offering a much better cost.
Here are a few suggestions to deal with procurement teams:
- The procurement managers often cross the line between negotiating and insulting. Don’t take it personally. They’re doing the job they’re paid for.
- Keep a margin of 10–25% for negotiations with the procurement teams. If you want to get $100, quote $125 so that you can reduce $25 during the procurement process.
- Avoid getting into a conflict or argument with the procurement person. In spite of all the relations that you’ve built with the Business Team, 1 procurement manager can block your deal.
Compliance Team
If you work with Financial Institutions, you’d find yourself meeting compliance teams as well. This is to ensure that your solution is compliant with the regulatory requirements. Financial Services across the world is a heavily regulated industry and so, you need to make sure that you are not selling something which tomorrow creates a regulatory issue for the client.
Unless you’re selling something really core, Compliance is usually not an issue. More often than not, the Business Team will speak with the Compliance team without getting you involved.
Woah! So that was a lot of people to deal with for 1 deal! Well, the reward is also high. If you’re able to navigate through these people, you’d often get a deal that would be 10x your usual deal size.
Now, let’s talk about — how do you get connected with these enterprise clients? Basically, how do you generate a lead?
Read the full blog post here: https://getcogno.ai/blog/how-to-sell-to-large-enterprises/
