The Octothorpe : One lead qualification attribute to Rule them All
One Attribute to Rule them All : Sales Wound #78
Attn: Quant Marketers, Demand Gen Ninjas, Growth Hackers
Oc·to·thorpe :ˈäktəˌTHôrp : a term for the pound / number / hash sign (#)
The exact number of employees in a company is by far the most important attribute when qualifying an opportunity because it singlehandedly indicates their ability to pay for Enterprise software. Note, “enterprise” software simply means they can sign an annual contract. If you sell a $100/mo product and you require a no outs, 12 month term, then welcome to Enterprise selling. (I’ll write a post later about why Annual commitment vs Mo to Mo is the only requirement for Enterprise)
Time vs Money : When you have few employees, Money is more valuable than Time. Later it’s inverted.
If the company has They don’t have the budget because every $ is more valuable than their time. They’ll just hack free stuff together.
20–50 emp: “If” you have a product that is must have for the biz at this stage, then they could make up to $12k/yr budget available but every single dollar is still hard fought for.
50–150 emp: This is the key inflection point as now budgets become available and the Money vs Time balance has shifted as you’re now trying to save Time. At this stage companies can spend up to $120k / annum for key products that will save them either engineering or sales cycles which are the 2 key bottlenecks (remember, ship code : ship revenue post)
150–300 emp: The SWEET Spot for Enterprise “land” sales up to $150k/annum. Established budgets + the pain is certainly Time as they can’t just hire emp to solve all their bottlenecks. Also key is the org size is small enough to get directly to the CXO/VP without much difficulty.
300+ emp : The issue now is the company is Too Big and there are now managers of managers. Complexity will kill you. Yes, you could sell to this company but do you have the time? Sales cycle has just increased 2–3X.
500+ emp : forgettaboutit. This is now a 6–12 month sales cycle if you’re lucky. InfoSec, Procurement, RFPs, Vendor Approval, etc. You just don’t have the time at this stage of the company.
The Exception: when you engage with a smaller business unit within a large company (ie Fortune 1k). The first qualifying question then is “How many people are in your specific org?” — Then if you are dealing with a GM/VP/Dir who has up to 150ppl rolling up to them within their org, then you can structure your contract as “For Business Unit X only” which is your “Land” into the big enterprise.
After Octothorpe the following are the next most important Qualification
2) Location : North America, Australia, UK, Germany. These are the only countries that buy “enterprise” software. India, China, Japan are the antithesis of this.
After this, all of these attributes are simply bonus to help you understand the strategy for the prospect. # Employees + Location are the 2 gating qualifiers before you go any further.
3) Title: CXO/VP/Dir your sales team better respond within minutes. For middle/lower titles the strategy is quite different. “Dodge Low, Punch High”. Stay far away from titles that include “Strategy” “Consultant” “Business Development”
4) Industry: can be important if you have specific wins in an industry. Nothing kills a sales team more than context switching
5) Years of experience / Years at the company : Total # of years of experience is an indicator if they have ever purchased Enterprise solns before. # of Years at the company tells you how much influence they have in the org. You’ll never close the VP who has been there < 3 months
6) Amount of Funding: Typically post Series B (50–150 employees) means the company now has enough $ to buy enterprise solns up to $120k and Time is more valuable. If a team is boostrapped or a “Lifestyle” business avoid like the plague because every single dollar is earned with blood, sweat and tears.