This article was originally featured in SoftwareCEO.
Just like many software companies, Ephox got its start by selling its web authoring software online. Founded in 1999 in Australia, the company mastered the art of search engine marketing, and during the first few years most sales were on the web.
While the company was doing well, growing at an average of 25-30 percent a year, it wanted to move beyond its online roots. This situation is quite common in the software industry, with thousands of small companies that have created a niche for themselves by selling online.
In particular, SaaS and open source companies –-- typically with a low entry point --- find it natural to get their start by selling online. However, only the companies that can break away from online sales and master enterprise sales are likely to tap the true potential of the market and become leaders in their space.
"Buying software online is like building a house by going to The Home Depot," says Andrew Roberts, CEO of Ephox. "Some may do it, but for many it is far too daunting a task. Most businesses prefer to deal with experts --- builders, architects, etc. --- who will guide them through the complexity and mitigate the risk of failure.”
"We now have a significant share of the web authoring market. Moving to an enterprise sales model has helped us get there."
Enterprises are looking for solutions and not software. This was the starting point for Ephox’s move from online to enterprise sales. Ephox was able to triple its revenues and grow its profits tenfold in just two years, even while facing severe economic headwinds. Here are the actions the company took to achieve its transformation:
1: Touch customers multiple times during
their decision process
To make the transition to enterprise sales, one has to touch customers more
often and in more ways. While web downloads of evaluation software continue to
play a role in marketing at Ephox, these are only one touch point –-- a minor
one –-- in a marketing process that aims to touch the customer multiple times.
While the web used to be the key conversion tool to transform prospects to customers, in enterprise sales the key conversion tools are phone calls, webinars, and sometimes face-to-face meetings.
2: Reach beyond the people who download
the software
At Ephox, people who visited the website and left their contact information
were most often technical people, with little understanding of the problems
their end users faced. Further, since they were in IT and not on the business
side, they had little decision-making power on the purchase.
The Ephox sales team now starts by contacting those IT folks, but focuses its selling efforts on the business manager or project director who holds the key to the purse strings. Those decision-makers are more likely to understand the ROI.
3: Upgrade sales skills
Selling to the enterprise can be financially very rewarding but it takes a
very different skill set to execute well.
An enterprise's buying process is usually complex –-- involving multiple stakeholders with different agendas –-- and the sales cycle can be lengthy. It takes a skilled salesperson to navigate through this maze and bring the stakeholders to a decision point
4: Increase the value of the software to
customers
Enterprise buyers appreciate a complete solution, one that includes handholding
during the sales cycle, 24x7 telephone support, custom legal agreements and
professional services.
When you move beyond the technical downloader to the business decision-maker, price is less of a driver and other considerations become critical. These include integration with existing systems, quality of support, reputation in the marketplace, trust established during the sales process, and so on
An
online sales process will often come down to a price comparison.
As
an example, Ephox has established support centers on three continents to ensure
that customers can talk live to a local expert.
For Ephox, the proof is in the pudding. The company's average deal size has increased from $15K two years ago to about $35K now.
5: Leverage partners
Ephox had established relationships with key software vendors such as EMC, Oracle,
and others. Initially Ephox targeted these vendors to OEM its products and pay
a royalty.
But this is not as effective as going straight to their customers, which are typically F2000 companies with big budgets for content management. Ephox is increasingly focusing on developing joint-marketing programs with its partners to reach out to the customer base and sell add-on modules.
6: Make sure multi-channel
marketing has a compounding effect
Enterprise
customers prefer to buy from other large enterprises.
While Ephox is a relatively small company, it invests heavily in online and offline marketing activities: Google adwords, trade shows, regional events.
This marketing outreach seems to be working. While visiting the company's offices, an IBM manager stated recently, "To the outside world, Ephox seems so much larger than it really is."
7: To get the attention of OEM partners,
get the attention of their customers
To get noticed by an OEM partner, One needs to sell to their customers. Yet,
to sell to customers, you have to be anointed by the OEM partner: a typical chicken and egg problem.
Ephox plays in the web content management market alongside the industry heavyweights. Establishing meaningful partnerships with those companies is a challenge, since they are being pursued by hundreds of other small companies at the same time.
Ephox took the approach of initially "forcing" its way into the customer base by building integration code – with or without public APIs.
After the first few customers started raving about the Ephox product, the OEM product teams took notice and opened the doors to a tight partnership.
8: Establish a sales process
A key step to successfully moving a sales team to enterprise sales is to
establish a sales process. The sales process is simply a tool for the sales
team.
It includes these pieces:
1) A
checklist to ensure that salespeople cover all the bases during the sales cycle
2) A
summary of best practices that is continuously evolving to reflect new
realities
3) A baseline to measure how new approaches fare, compared to existing ones.
9:Land and expand, with referrals
A referral from an existing customer is one of the shortest paths to
closing new business.
But in most online sales environment, sales transactions are largely reactive. When a sale is made, little happens until the customer re-initiates contact with the vendor.
In enterprise sales, it is critical to have the sales team proactively call the customer to check on the status of the project and then ask, "Who else in your organization –-- or outside --- should I talk to?"
Ephox is now getting 25 percent of its new licenses as a result of referrals from existing customers, up from single digits.
By
following these tactics, Ephox has successfully transformed its business from
web downloads to enterprise sales. In fact, the company even hit the Inc.
5,000 list
this year. And I believe any software firm, who successfully makes the
transition from online to enterprise, can vault itself to the upper tier of
vendors in its market.
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