For many startups, selling to corporate clients is an attractive, yet daunting, prospect.
Corporate organizations are huge, startups are tiny. They’ve probably been around for decades or even centuries and they’ve got millions of customers whereas startups are new and probably lack clients.
So, how should startups go about procuring corporate clients?
We spoke to Adrien Cohen, president and co-founder of Tractable, a London-based insurtech startup that develops AI to assess damage and estimate repair costs in ‘real time,’ who shared his cheat sheet to help anyone looking to navigate the corporate jungle.
But first, and by way of context, Tractable was first set up in 2014 and now employs 100 people spread out across London, New York, and Tokyo.
The company has raised $55 million in funding and services more than 15 corporate clients including Tokio Marine — arguably one of the largest car insurers in Japan — and Covéa, a big French insurer.
If you want to emulate Cohen’s success in lining up corporate clients, here are some simple tricks and tips you can follow:
Enter from the top
Before you even consider reaching out to a corporation, do your research. Figure out who you’re speaking to, and who holds the power to actually make decisions.
Should you manage to get a face-to-face meeting, make sure you know who is in the room and focus your attention on the right person.
If possible, Cohen says you should try and get in from the top while respectfully empowering the team on the ground.
Know what you want
It sounds simple enough, but Cohen insists you need to have a clear idea of what you want and why — and to think about this well in advance.
“You may not be able to get a deal now, or even soon, but what you can achieve now that moves the conversation forward and secures progress: is it another meeting with more stakeholders, or an introduction to people they know, who perhaps can move quickly?” he adds.
Seem bigger than you actually are
Making your business seem bigger than it actually is, isn’t always easy, but it’s not impossible and it could make a huge difference in terms of making in-roads with a larger organization you’re trying to sell into.
“This is difficult, especially when starting out, but there are ways around it. Don’t ever go to a meeting alone; bring your co-founders,” Cohen says.
“If you have investors from this space, ask them to come — their expertise will go a long way to establishing trust. Corporates don’t want to take on extra risk, so give them every reason to put their faith in you by surrounding yourself with credible people,” he adds.
But seeming ‘bigger’ doesn’t cut it. Get creative and think of ways of making yourself and your business appear more professional.
For example, Cohen says he had a meeting early on with a potentially game-changing client, so instead of using the tiny meeting room in their noisy accelerator (where they were based at the time), he scouted around and found a much bigger room in the building next door.
Did that alone swing the deal? Cohen says probably not, but it possibly gave his startup the boost they needed at the time.
Pithing is an art and when you’re trying to sell to a corporate organization, the pressure is on.
With that in mind, here’s what Cohen says should do and what you should avoid:
- Have a great looking presentation. If you’re a tech company, you need to be able to demo the technology, and it has to look amazing. If you have no powerpoint skills, find people who do. If you aren’t a natural presenter, practice — and seek advice on what works, and where you fall down.
- Adapt to your audience. You need to establish a rapport quickly. If they bring a lot of energy, then raise your game; if they are formal, then don’t be too quirky. At our start, as French 20-somethings selling to British insurers, we needed to signal through what we wore and how we acted that we understood their world, their challenges, and what they were trying to achieve. So while we didn’t fully suit-and-tie up, we didn’t turn up in t-shirts either.
- Adopt a phased approach, in which the first step is always very simple. Yes, there is a grand vision: but it’s your job to make it very easy to get started. Therefore, the first phase of your engagement needs to be very simple to activate — you need to do all the work for your customers, and hold their hands through the first steps.
- Apply healthy paranoia: regularly take the temperature on the account through different people, so you can imagine and pre-empt all potential obstacles and prevent issues becoming threats to the account.
- Lie. It’s all about trust in the end, and if you lose your reputation it’s gone forever. So can you make yourself look big by bringing your investors along? Yes. Can you lie and say you have more customers than you do, or your product does what it cannot? Absolutely not. So – never lie, it won’t do you any favors.
- Name drop. If you try and demonstrate you have leverage over people by talking about your connections with their seniors, they may want to prove you wrong (and that their relationship with these people is stronger) by blocking you. Stay humble, make your audience feel valued, and give them agency.
- Employ blind faith. It’s easy to assume your connections at the company have it all figured out. But there’s always potential obstacles that they may not foresee — and these could be deal breakers.
The golden rules
When it comes to pricing, Cohen says there’s a golden rule: don’t do anything for free.
“You’re providing value, so charge for it,” he stated matter-of-factly. “Very often, startups discount their services way too much, which is not OK — if you’re doing something for free, it’s not good for you, and it’s not good for the corporate.”
If you’re charging them — even if only for a proof of concept — they are likely to pay attention to it, Cohen notes.
“If your product does what you expect then you’ll get senior buy-in. Without that commitment, you’re just a minor engagement and one that’s easily forgotten or neglected — and one that others will expect to get for free too.”
What about discounts? Cohen says that if you need to offer one to a first customer, then do so, but it must be negotiated properly and with a view to evolve the deal as the relationship progresses.
Now that you have all the skills you need to pitch to prospective corporate clients, get selling!
How do you deal with clients? Share your experiences with the Growth Quarters community.
Published June 17, 2020 — 07:46 UTC