Here’s What Enterprise Buyers Look for When Evaluating Software
At some point in every software company’s growth comes the great challenge of tackling the enterprise market.
In a panel for DevGuild: Enterprise-Ready Products, devtools accelerator and fund Heavybit, Inc. brought together CTOs from PlanGrid, One Medical and AdRoll to discuss what they look for when evaluating software. Grant Miller, Co-Founder and CEO of Replicated, led the discussion.
Here are some of the key lessons we learned from the panel about how software providers can anticipate the needs of enterprise customers during the software evaluation process.
Adapting sales cycle expectations for the enterprise
Enterprise sales cycles are significantly longer and more complex than those of smaller customers. The panelists note that for enterprise deals, you may need to adjust your expectations about who will be involved in the deal. While the CTOs may be directly involved in the purchase decision-making at the startup and SMB organizations, the role of the CTO at larger organizations can be very different, and not all CTOs look the same.
“A lot of our clients want to target CTOs or C-level executives,” said Valentino Volonghi, CTO of AdRoll. “That’s not always the best way to go, practically speaking. But if you’re determined to go down that path, make sure that you know exactly which person you’re talking to at that point in time… some CTOs are a lot more technical than others. Some are more big thinkers, some are more customer-facing CTOs.”
They also suggested that founders stay closely involved in the sales cycle, even if they’ve already handed off most sales activities to the team.
“I would say that in general, founders have always been the best salespeople I’ve ever met. So even if you have a sales team, if you’re a founder out there selling it, good for you. That’s how you’re going to learn. If you have a sales team, check in on the customers,” said Ralph Gootee, Co-Founder and CTO of PlanGrid.
Enterprise features to focus on
Scalability in bottom-up tools
While enterprise orgs often have a more centralized process for purchasing software than smaller teams do, it’s a misconception that top-down is the only way to reach enterprise users.
“The reality is that we would slow people down if we went through a central process for every major class of application, and I don’t want to do that,” said Kimber Lockhart, CTO of OneMedical. “At the same time, we do hit a stage with various types of vendors when we have enough sprawl within the organization that we need to help provide a tool that just works. For those kinds of vendors, it’s helpful for them to support SSO so that I can make it easy for people to pick the one that we already chose, as opposed to going off and picking one of the others.”
Security features and team
Unsurprisingly, security is a major concern for enterprises, and their vendor evaluation often focuses heavily on security features and practices. They look for dedicated security resources and security practices around data.
“What we care about is whether you have a person there who deals with security,” said Valentino. “For certain types of data, we’re going to want to sit down with your team and go through your infrastructure. I want to know how you’re going to deal with disaster, if there’s going to be a disaster, because if we put your servers in front of our customers’ websites and you have a spike of latency for three hours each day, our customers are going to leave us and we’re going to be stuck with you instead because we signed a contract.”
To be ready to speak to these concerns, preparing for security reviews and questionnaires is an essential step. Kimber noted that she often asks to do penetration tests during security evaluations: “Our security team genuinely wants to work with vendors to help them improve their security and to understand where things are today. So, yes, if you do terribly in our penetration test, then that could be disqualifying—and likely will be.
On the other hand, if you’re in the same territory that most people are—where you’re giving your best to security yet we find a few things—there’s a process to work with you to fix any security issues that we find so that we can feel confident about using your software system.”
Reporting and meta reporting
Another important feature that enterprises look for is reporting on the tool itself, not just the data it manages.
“Understand that your application is going to get used and you need to be able to report and create the next high-level view, the executive level report, to service up for someone like CTOs to look at and evaluate and know what’s going on,” said Grant Miller, CEO of Replicated.
When pricing, beware of build vs. buy
When it comes to evaluating the cost of software, enterprises will think about the cost of building what they need instead of purchasing it. In this context, it’s important to understand pricing for the features that they’re interested in.
“Of all the totality of the features that they have, we may need five or six. And then once those are covered they might be so much simpler to build on our own. That’s where we’re like, ‘Your pricing is out of whack,’” said Valentino.
Think of enterprise customers as partners
Selling to the enterprise may also require a shift in mindset around your relationship with customers. By approaching enterprise prospects as a partner and sharing your willingness to work with them at every step of the way, you’ll get better engagement—and you’ll lay the groundwork for more successful deals in the long run.
“If we’re even at the table right now, it means we want to work together and that we’re trying to establish a trust relationship,” said Valentino. “So the deal is, let’s get to know each other as two businesses and figure out how we do things and what we value, what are our core assumptions that we care for. And then we can move on from that.”
When it comes to selling to enterprise customers, there’s no one magic formula that works for every client. But by understanding the mindset of the enterprise buyer and learning to address their needs and concerns, your company will be able to more effectively build long-lasting partnerships with enterprise customers.
A self-serve model compared to a more traditional enterprise sales models seem diametrically opposed, but it’s helped Atlassian redefine how B2B software is sold to enterprise companies. Find out how.