Secrets to Closing Your First 6 Figure Deal

From Salesforce Ventures, Director of ISV Sales, Brooke Gardner.

Good afternoon. Thank you for joining us for Secrets to Closing Your First Six-Figure Deal. I'm Brooke Gardner with Salesforce, and I'm joined by John Stewart, CEO and founder of Map Anything, Bob Marsh, CEO and founder of Level 11, and Kathy Lord, SVP of Customer Success and Sales at Intact. Thank you all for being here this afternoon, and thank you all for joining us. So let's go ahead and get things started with some introductions. Can you each share with us a little bit about your role, your company, and some of the growth you've experienced this past year?

Sure. So as you said, John Stewart. I'm the CEO, co-founder of Map Anything. Map Anything is an app innovation partner of Salesforce. We are the businessware company, which means we use location as part of business process and workflow to help employees be more productive in their planning and gain efficiencies. So really focused on field sales, field service, field marketing.

My name is Bob Marsh, founder and CEO of Lovely Levin. So I spent my career about 20 years in sales and sales management, and one of the things that I learned as a successful seller and managing other successful sellers is that what made them do well is not from any magic closing technique or some special product or relationship. It's that that they had the discipline to do the controllable activities every single day with discipline that led to success. So as I learned, but the problem is that only maybe 15% of your sales organization actually act that way naturally. So if you have a 100-person sales team, you got 85 people who get lost in customer service issues or writing proposals. So that was really kind of the nugget that got me to start Level11. So we're a sales activity management system We work with companies to help identify the critical selling activities that lead to sales. Every salesperson gets a personalized scorecard to know where to focus. Then sales managers use it to really manage their team, run their team meetings, manage their one-on-ones, et cetera, that sort of thing. We work with companies that are here at SaaS. They're like Influitive, Sprout Social, Salesloft, and large enterprises like HP Enterprise, Comcast, Verizon. I heard we just signed Mutual of Omaha this morning. So our growth over the last year has been very much focused on this topic of larger enterprises. So in the last year, we've gone from one 6-figure customer to now we have about a dozen. We just recently signed our first quarter-million-dollar customer. So this topic is certainly one that's been top of mind for me.

That's great. So Kathy Lord, SVP of Direct Sales and Customer Success for Intact, as Brooke mentioned. For those of you who don't know, Intact is cloud ERP for the mid-market. And so we span everything from a couple million dollar companies all the way up to billion dollar companies. And one of the things that I found is very interesting is that I own the entire revenue stream. So I'm not only under the gun to sign up those new six-figure deals, but I'm actually accountable for making sure we retain those six-figure deals for the next 15 years. And so it's a very interesting approach we have in terms of deciding which of those accounts we bring on board, as well as how have we scaled up in terms of starting from smaller customers and then now growing up to supporting billion-dollar organizations. And so, I'm really excited about our panel today and talking about some of the things that we live through in terms of trials and tribulations as we figure out how we do that successfully.

Thank you guys for those introductions. Okay, so— Jason M. Lemkin, let's go ahead and start with you. Tell us about when do you know that your company is ready to go after your first large 6-figure deal?

Well, you're ready to go after it when you decide to go after it, but the reality is you're not actually ready to do your first 6-figure deal. Like most SaaS companies, I started in the SMB segment and then climbed up the market segmentation. What you'll find is that when you get into 6-figure SaaS deals, it means you're dealing with enterprise, and the enterprise have their own way of buying software. And so the things that you don't think about when you've been selling product to these small companies in the mid-market are things that have nothing necessarily to do with the product. You start getting into, here's our click-through license agreement, MSTU. My first 6-figure deal was a company by the name of First Data. They said, that's great, here's your 65-page, license agreement that we use, right? And then there's data privacy issues and procurement process and the things that you don't have to deal with at a smaller scale. And so that was a bit of a change in the way we operated and did business. And so the lesson learned there is understand early on the answer to the question, which is, how do you guys buy software? Because when you attack those, it's never about the— necessarily winning the technical end of it. It's going to be about everything you have to do to actually close that deal.

And yeah, Bob, you want to add anything to that?

Yeah, I mean, I think you're right. You don't— you never really feel like you are ready. You certainly want more of it. But you're always— I mean, every customer— I think when you're early on in particular, there's a tendency— you want velocity, of course, and you you go after the smaller companies, and you think about, like, there's the ego stroke of the large company. It also validates a lot about your business, but it can be a mind-bender when you get things like, you know, that's a really nice agreement you have, here's ours, and you go through that process. And so you don't really know if you're ready or not, you just kind of have to go for it at some point, and you're going to see if you're ready. So you kind of have to just keep kind of shooting at it, Maybe you'll get it, maybe you won't, but you just have to decide, as you said, that you want to give it a run.

The thing I would add to that, and this is, I think, such a great structured way to look at it, is you look at what is that customer journey or experience and how are you solving it for them and addressing that when you're dealing with either SMB customers or smaller, and what of that is going to be different as you get bigger. There are certainly sales cycle things that are different, and oftentimes they're going to want to see a face-to-face face, they're going to have certainly a different contractual and procurement process, but what we've found is dramatically different is that once you sign them up as a customer, they're expecting a different level of service in terms of how do you train me, how do you implement me, what level of support am I going to get? I want a named person I can call and chew out if something's not working in the software. I'm not willing to log on to, you know, a portal and enter my case. And so it's really across that whole buyer's journey, and since we need to keep that revenue going for many years to come, it's— Thinking also beyond just how do you get them to sign the first contract.

That's such a great point. Again, going back to that first deal that we did, our advocate called me and said, "Hey, we just need to take a look at your service level agreement and escalation process." I said, "Oh sure, no problem. I'll send it over." So I hung up the phone, I called my CTO and partner, I said, "Hey, I think we need to go write a service level agreement and escalation process." Exactly.

[Speaker] You were talking about it, when you think about are you ready, if you have a sales organization, particularly as a founder, you might have to look and say, are they ready? In terms of equipped. I mean, they'll say they're ready, 'cause they're gonna say big dollar signs, but you do need to decide, are they really equipped to handle a customer like this? And even if you don't, like as I say, if we have founders in the room, If you don't have experience either, then it's gonna be on you to figure it out. So, but better you to do that than the rep. And so particularly for that first one or those first handful, and probably it'll last for a long time, you will need to own that sales process. And honestly, the larger enterprises will expect it and they'll value it too. But you're gonna probably need to take ownership of that one and learn along the way because there's little quirks, things like you just mentioned, that'll come up through the sales process that nobody in your company would ever have imagined coming up, like your escalation policy, but only you as the founder are gonna have the wherewithal to say, "No problem," hang up the phone, and then you can actually get that done like that night. So those are some of them. That'll happen in many different swings of the sales process.

So Bob, what are some of those key milestones that you need to achieve as a company before you can go after that large six-figure deal?

So the, I don't know if there is one. I really think it's a little bit what John said. Some of it is the emotional decision that you're ready and that you're willing to go for it. So you certainly have it in you if you've started a company. But if you've got other customers, that's helpful. So if you've got some kind of a process to follow so you can understand that's the process for everyone else, then you have to start thinking about how could this work for for a larger enterprise, as you mentioned, Kathy, that they may expect more in person. They may expect, like we've had this recently, what's your implementation plan? What? What's that?

They're trying to help.

Right, so they just, some of it is like, are you ready? If you have a process in which you implement and manage a rollout, okay, you have something, so actually you may have more ready than you possibly realize. So having a base of customers that are using to prove that You're somewhat ready, certainly one of them.

Cappy, once you close that first big deal, how do you get the rest of your organization behind you? And as you were talking to Bob, all the support that you need from your engineers, from your ops team, how do you get them all together to support what it takes to make, ensure that this big success that you just landed is that?

Well, ideally you have a little bit of that discussion before you close them, but that rarely happens because all of a sudden you're in the throes of closing this big deal. But I think the key thing is understanding what makes that customer a 6-figure deal. Is it because instead of selling them a 5-user departmental license, now all of a sudden you've sold them an enterprise-wide license? So is that scaling up based on a higher volume of users? Or is it scaled up because you've now sold more complex modules? Or what can drive you there? And one of the things that I've found really helpful is that ideally when you're selling customers and they're starting to to grow, even though they may be an existing customer, your customers, if you're targeting growth-oriented companies, they're gonna actually take you to that 6-figure deal probably almost just as fast as when you go acquire a net new customer at a 6-figure deal. And so that was one of the really cool things for us is that when I had to go get services, support, engineering, and finance to agree to go, you know, as we moved upmarket and selling bigger deals, I said, "Hey, you know what? I'm going to acquire customers that look like the ones we already have today. So we may have acquired a customer when they were 50 employees and $20 million, but you know what? Now they're $300 million and hundreds of employees, and so we're already servicing those customers. And so you look at that and you say, okay, well, how happy are those customers? Are they the ones that are calling us about support or they have product issues or they're on the red account list every week? And so it's a great way, I think, of self-reflecting into your install base of how many of those customers are growing or not. And then that can help take you upmarket. But the number one thing that I used was just mapping out, and you'll hear me keep repeating this, but I think it's such a great framework, is going through, here's the milestones on that customer's journey. What are they expecting different? And this is how we're gonna deliver it. So I was able to sort of lay out a framework of this is what it means to engineering. This is what it means to services. And okay, did I get everything right the first time? No. And you guys, you go along, you're going, oh no, I didn't expect them to ask for that. But at least you can get their buy-in because it's now not unknown. You kind of get a framework for what those larger customers are expecting back from you in return. And if folks haven't sold or worked with larger customers like that, it's kind of scary because they don't know what you're signing them up to do.

When I think of the implementation, like for these bigger customers, it's different. In any kind of SaaS company, you're trying to build, ideally you're hoping for a very frictionless sales process, self-service driven, etc. But those bigger ones we were talking about earlier, it just requires something different. One of the things that I know we learned is that for a larger enterprise, you have to have this different mentality for what does implementation and rollout mean. So it's not just, hey, go here and install this and click these buttons and here I created this really nice Word document with pictures and screenshots. There actually needs to be a formalized project plan, implementation plan. Here's the start point, here's what a kickoff call is, who should be on that call, what are we going to cover, all the way through the process, regular escalation to the executive sponsor, like make sure that you have that designed out. Here's what done looks like. This is when we are done and both of us are in agreement. We're signing off on that agreement. That concept of a project-driven implementation was one that was very new for us. We made plenty of mistakes to learn that one. That was a big shift and actually a very simple concept that unless you've been burned a couple of times, you don't really think of it that way. You think of it, "Hey, they bought it. They can go install it and then we're good." but it doesn't really work that way.

So it's, you know, again, this being your first 6-figure deals, it's gonna be an enterprise account. One of the speakers yesterday warned about CEO magic while scaling a company. For your first enterprise account, expect to be doing CEO magic and do a lot of it, and don't shy away from it. So we aligned the whole company about doing just about anything we had to do with this one client. To basically make sure we met their needs, and they did roll out and adopt because we knew that first enterprise client was gonna get us our next 5, and it probably got us our next 10, truthfully. Also, the one thing that did do for us was, just like the company from a sales process standpoint wasn't really enterprise ready, what you're gonna find is if you have an SMB, a mid-market solution, and you bring it to that enterprise segment, your solution's probably not ready either. And although we did a lot of fire drills, what that first enterprise client did for us is they made our product bulletproof at an enterprise scale. Up to that point, I think the most number of records, for example, that we were dealing with in an account was like 100,000 records. Well, this was a financial services company. They had 30 million account records, right? So you look at the relative scale of how to deal with it, and they had hierarchy structures on top of hierarchy structures, which led us to putting in role-based UIs and permissions. So they really got us ready So the next enterprise account that we went to, we were actually ready to take that deal down a lot better. And our whole company was aligned about it. So the developers never complained when in the middle of the day I called them up and say, add this feature. We need this. Do it now. And everybody was on board with that. And that really, I think, drove our success in the segment.

So we've got a room full of founders here. What piece of advice would you each give to them on finding and closing that first 6-figure deal? Kathy?

So absolutely. So I think you really need to think about it, and it a little bit depends on how you sell your product and if it's a matter of scaling up number of users and you're going from departmental sales to enterprise-wide sales or selling a bigger footprint of more complexity. But the number one thing I would say is to, map through what your current process is today, and then map through what you would expect that to change to or to differ, so at least you have documented a sort of roadmap of the things you think you are going to need to do differently. So whether or not you have them in place, you at least know what those gaps are. And the great thing is about events like this is it is so easy to document your process and go to a peer and say, okay, This is what we do today. What do you think we got to do different to go get that first deal and try to make them successful? And so, you know, leverage other people's trials and tribulations to try to, you know, reduce the amount of times you're banging your head against the wall on it.

A couple of things. One is that coming back to the same concept of just deciding you're going to do it. So that first one, I remember when, you know, after our first couple of years, I just felt like we just, we have to get our first 6-figure customer. Like, we got to figure out a way just to get the first one any way possible. And so I remember there was a, it was a large enterprise and we were trying to figure out how to price. We had no idea, and it seemed like if we used our typical pricing, it would be, it would be way up here. I'm like, I don't even care, just make it more than $100,000 and I will be happy. So because all I want to do is get a customer and prove ourselves, our sales team, our product team, our investors, like anybody to say we are— someone gave us over $100,000 to use our product. So, and someday I'm sure we'll laugh at that because it's really small, but you just have to get over that hump of deciding like I'm just gonna find one. And then when you get that, it's like, all right, now the next one, and now like go after 250 or whatever it might be. So that's that mental barrier, and you know, sometimes you can get very caught up. And I remember in using your typical economic or your pricing model or calculators for what it would look like and say, oh, this one, maybe our first one's gonna be $342,000. It's like, maybe not. Just get your $100,000 and let's move on. And then if we lose a little bit, it's okay, but you know, we'll fix it the next time. So there's a little bit of that I think you have to get comfortable with. The other topic a bit is on the new business front. It's, I touched on it, slightly, but there's a lot more preparation work that goes into, you get that first meeting, like how do I go in and how am I ready for it? And preparation doesn't mean I'm gonna read all night long about all these people and what they're saying on Twitter and like what it's saying about the company. It's just there's a lot of research that goes into it in terms of like you talk to a lot of people. I'm preparing for that meeting, let me call my sponsors, say what do you guys wanna get out of this? Tell me what to expect in the meeting, what's the room like? Tell me about the other people and what are they looking for and what do they do. So it's just a lot more blocking and tackling on how to prepare for that meeting, go to that meeting, expect for there to be many more, many more people that you need to deal with. And ultimately when they say yes, it actually doesn't mean they're ready to go. It might mean like, yes, we want to buy it and it'll take 6 more months to go through procurement and IT and security and everything else. So you kind of have to also be ready for all those different twists and turns of what it's like to buy something because Those first meetings aren't going to be like the typical ones where you go in and demo. It's going to be a lot more complicated with a lot more people involved in that discovery and sales process.

I think you're spot on. I mean, just be prepared that it's going to take you a lot longer than you think it is. It's going to cost you a lot more to service that client than you think it will. And the price, whatever you negotiate with your business sponsor, doesn't mean a darn thing until you get through the corporate procurement department and they get their pound of flesh, which they will.

They'll start higher.

Yeah, start a lot earlier. Prepared for that. Right? So I think it's one of those things where it just does come back to that. You just got to be ready to go after it and just understand that your job is to make sure you have alignment about taking care of that customer as best as you possibly can, because you are going to use that first enterprise client to get your second, third, fourth, and fifth. And so they've got to be a referenceable customer.

Thanks, Sean. So at this point, we would like to open it up to the audience for any questions you have for our panelists. Yeah, go ahead. So how transparent should you be to a customer about whether or not they are your first enterprise customer?

The pause may be part of the answer. No, I actually do think that you should. I think it's— you want them to know that. I mean, if they don't, it's— they're gonna buy. I mean, if you tell them that, then a lot of these bigger companies, they actually like that and they're comfortable with that. And but part of your process would be like, look at— we are You would be our biggest customer, or this part is new to us, whatever it might be, but you're buying it for this reason and this is what we're all about. We would like you to be part of helping us design what is this product going to look like. No, you're not going to own the product, but we want to have your input and help guide us because we want to win more customers like you. Then turn it into this opportunity to say, and in return, what I would like from you is we want product feedback from you, but also I want you to be a referenceable customer for us. Like, assuming we find success, help me share your success story and use your name and use your logo and all that kind of stuff. Like, that's the quid pro quo that comes with it that only comes if you're open and honest. So I think it's actually really important. They're gonna— and if they know that, then they're gonna appreciate the honesty. They just want to have some sense of can your business handle them, which is more of what they're concerned about.

Yeah, you can actually use that to your advantage. Your advantage. And in some cases, they will take a little bit of ownership and pride to watch you as a company develop as you go over time. And like you said, they can't own the product, but know that— I always told— and the funny thing is, to this day, whenever we're signing a new client that will become our— now our biggest customer, I continue to tell them that, because I want them to know there is no one more important, no one customer more important than them. And so I think that buys you a lot of weight, a lot of credibility. And you just gotta couch it as, look, we're gonna make sure, we're building our whole reputation of our company on you, our first enterprise client. So we're gonna do whatever we have to do to make sure you're successful. That's my commitment as the CEO. We're gonna align all our resources. And I've never gotten dinged for that, not one time.

[Speaker] And I would say on that, this is really important when you're thinking about, not just are you ready to close your first figure deal, but is that prospect the right first 6-figure deal for you to close? Because you need somebody who's a little bit of a visionary, who has a high risk tolerance, that's willing to truly partner with you to help you bring your organization to service those types of customers. And if you find the right first one, they can really accelerate your product and your approach to the market. It can really, really be detrimental if that first 6-figure deal you close is somebody who has a very low risk tolerance and probably even more important, isn't in the sweet spot of what you're looking to grow and develop the product. So if that first 6-figure company is saying, "Hey, we need features A, B, and C," but the rest of your market needs X, Y, and Z, you're on a wild goose chase. And sometimes it's hard to totally assess that before you sign them up, but I think that's one of the most critical things when you are bringing on those first couple is they have to be right in your wheelhouse so that they can actually take the product where you're going to be able to go to mass market with it as opposed to some fringes.

Thanks, Kathy. Yeah, sure, in the back.

[Speaker:JASON M. LEMKIN] So the enterprise level, if it's a real enterprise account, like even to this day, we I have in-house legal counsel now, something I never would have dreamed of having at a software company, but we have to because of our deal flow. And there's certain key things that matter, and there's certain things that don't. And understand that their lawyers, just like your lawyers are going to do, they're going to ask for everything under the sun and the sun, right? So the things that are really important to a SaaS company, at least what I always tell my CRO and my sales guys, Absolutely no IP assignment rights, and these are ones that are important, guys, right? And because large enterprise companies will be really sneaky about that and try to stick that in there. I.e., you build a feature for them, they own it, or can they make an assignment to your software, right? None of that, okay? Make sure it's mutual identification, right? No, under any circumstance, termination for convenience. This is the nightmare for your auditors. Revenue recognition issues. You don't want any of those, right? So the no-hire clauses are kind of BS. They're not really enforceable in most states. But I kind of focus in on those 3 main points.

Those are the 3?

And then the rest of it is, you know, it makes my lawyer happy, it makes their lawyer happy to mark it red. It's like coloring. So whatever, right? So, but you know, those, and a lot of those large corporate agreements will follow the same flow. Now some of them, if you're off platform, You do get into the data protection, and if you do anything with healthcare companies, you are gonna get into HIPAA provisions, and that itself is its own little nightmare, and there are some bugaboos in there too. And that's where your insurance, your limited liabilities become important. But just understand the things that really matter, and then don't worry about the rest of the garbage. Oh, yeah, I mean, look. I'm not gonna win this argument with a GE or Siemens or Comcast. It's just the way it is. Right, so.

But I will tell you, we go all the way up to very upper mid-market, and we just say, it's our contract, and if you want to move forward, and we explain to them that the size of organization they are, the amount they're spending with us annually, and yes, it is over 6 figures, but at the same time, the risk and exposure for them is minimal, really. And if you want to move forward, this is it. And SaaS is very different than licensing on-premise or custom software development, and so, I mean, this is the challenging part is many times their agreements don't even really give them the protection that they should want to have around service and availability and all those things that most software as a service contracts cover. And so when we have that conversation with them, we can generally get away with it. I agree when it's the Boeings, the GEs, I mean, you got to use their paper. Go ahead.

So the question was, how do, how do you identify that enterprise account and how do you identify that decision maker?

Yes, so I would say, I mean, obviously it's, it's probably going to be somebody who's raised their hand and expressed some interest in some way, or if you have a target list of saying, hey, we're going to go spearfishing and we're going to go try and pick off these key industry leaders because we think that they will be able to be great references for us to bring the others on board. And you can start to look at them. So what are the other technologies do they use? Are they cutting edge? Are they using sort of the latest and greatest in complementary technologies, and that just says a lot from the outset, even without having had conversations with them, to know, you know, what is their risk level. Clearly they are willing to do that. And then it's finding somebody who is in that sponsorship or leadership position that you can quickly do some great LinkedIn searches or similar to look online and say, you know, have they been proponents or spokesmen for other technologies. And so you can really start to assess, are there players there that are willing to be advocates to bring new technology and new advantages to the organization?

I think we have time for one final question. Go ahead.

As a young startup, you go on to one of these customers for a 6-week review on something that's more of a system of record for them, so it's a —pretty important piece of software for them.

How do you allay their fears that you might be out of business in 2 years?

What do you say to them to say— The question is, how do you, as a startup, how do you ensure to these big enterprise companies that you're going to be in business 2 years from now? How do you allay their fears?

Well, for myself, it was easy. We're built on Salesforce.com. Were built on their platform. Great answer. So I have the world's best scalability and availability and all that other good stuff. I don't pay him. She doesn't. In fact, I pay them. Exactly. A lot. But so it's one of those things where you convince them, hopefully your platform that you're built on, something like AWS or Salesforce, and that's a very— easy, neat little trick with your legal document that says, hey, okay, we disappear, we'll put something in, it's called an escrow agreement for software source code. We've done it 6 or 7 times, right? It's never been executed, obviously. It's almost like a paper agreement. But you can do that, and that makes them feel good. That says, okay, let's say as a company go out of business, it's a system of record, they still have an ability to continue to maintain the system and have access to it. It's something that will unlikely never be used, right? Because if a company does go out of business, They're gonna switch platforms. They can't have a system of record on a company that's out of business. But it is a nice little legal trick that certainly allays those concerns and lets you operate.

[Speaker] Yeah, there's two parts. There's the technology, so we're the same way. Being on Salesforce, instantly you have the credibility and that issue is put to the side. But then there is the business side of it, which is like, yeah, but what if you go out of business and you can't service us anymore? So there, I don't know there's a really clear, solid answer other than You know, in some cases you don't need to open up all your financials, but if they just know, hey, here's where we really truly are, you know, directionally where the business is. I think also you need to be careful, you know, that any one customer is not gonna dominate you, and not just emotionally, but I mean dollar-wise. So if you get that one 6-figure deal and they're 50% of your revenue, that's actually really risky for the company. So that could be one reason to watch, you know, your price point. So that one company couldn't financially take you down.

[Speaker] So never agree to show them your financials if you're at this stage. Instead, offer them an escrow agreement. Absolutely, 100%. We used to turn that down all the time. No. And that's, again, same thing, guys. I know it's a little bit like David and Goliath. They're gonna ask for everything, right? They want it all and they want the pony, right? It's okay to say no, right? If you've met table stakes, which is you've got a really high-value proposition that's gonna positively impact their business, you have earned the right to be able to push back, and you have a little bit more leverage than you think, because you wouldn't be at that stage of negotiations if they didn't need what you were offering.

So, you know, great advice. Great advice. Sometimes not alternative options available either, so I mean, at some point you have, you know, either they see the value or they don't, and if they're really that risk-averse where you can't get over that hurdle through the tactics that John talked about, maybe they're not the right first six-figure customer for you to have, because there is just an inherent amount of risk when you are adopting new technology into markets.

I wanna thank you all for your time this afternoon. I wanna especially thank our panel for their advice. If you're interested in further talking to this group or becoming a Salesforce partner and learning more about our security infrastructure, you can come and talk to us on the second floor at the Salesforce booth. Thank you all. Thank you. Thank you.