In 2015, I launched a company. After five years as a product manager at Withings, I had acquired a certainty: brands are not equipped to know what their products become once they are put on sale, especially on the internet.
I saw my sales colleagues spend several hours a day looking for their product pages on dozens of merchant sites. Of course, the retailers had bought the goods, but how could they be sure that the products were rated on BestBuy.com, still available on JD.com or sold at the right price on Amazon.de?
I started to develop a web app that could automate the tracking of product pages: price, availability, notes, content. My salespeople could see all distribution issues at a glance. When I started to feel traction, I left Withings (on good terms!) and launched BlueBoard. My first customers were the tech brands of the Parisian market: Parrot, Netatmo, Withings. My launch price: 290 euros per month, to follow all their products all over the world.
I quickly realized that my customers were receiving proposals for competing solutions at several tens of thousands of euros per year. I realized that my pricing had to be much more ambitious, and I set myself the goal of signing 6-figure contracts. In order to achieve this, we had to solve a few problems in our business strategy.
Moving to annual payment and upfront
When I launched BlueBoard, I had no B2B SaaS experience. My reference points were more consumer subscriptions like Spotify and Dropbox. So I offered a monthly rate to my first customers, with 12 invoices each year.
My advice is to move as quickly as possible to annual billing with upfront payment. All the major SaaS companies (Salesforce, Google Suite, Slack.) are now pushing towards this type of invoice. It doesn’t stop us from continuing to talk about monthly rates, and it makes management incredibly simple. Impossible to focus on essential deals if you have to deal with 12 micro-renewals per account per year.
Set up a minimum basket
Spontaneously, sales teams may tend to sign easier and smaller deals. Large structures are often discouraging to approach.
The effort required to close large deals is indeed higher. These accounts also represent more work for all the other teams (operations, account management, support.), but in the end, a deal at 100,000 euros is much more profitable than five sales at 20,000 euros.
You have to make sure that the sales team shares this vision. In particular, setting a minimum basket has helped us to stop wasting time on deals that are too small and focus on the best opportunities. Then, I was very involved alongside the sales team on the first 6-figure deals signed.
Don’t cap the number of users
Most SaaS have a license or user-based pricing. Others have a user cap for each price point in their offering (up to 10 permits in the Pro Pack, for example). The problem when the product is not very “individualized” (as Slack can be, for example) is that users share licenses. This is difficult to contain, and it makes the work of the customer success team very difficult: it’s impossible to know who is trained and what everyone’s problems are.
As a result, we decided not to go for a license. Even better: for all our contracts, even the smallest ones, we have an unlimited use policy. And the more users you have at a given customer, the lower the risk that the customer will not renew.
Signing global deals rather than national deals
During the first years of BlueBoard, we didn’t know which way to take the multinationals. Do we contact the different regional offices separately to sign as many contracts as possible? Or is it better to contact the head office directly? We asked ourselves this question for some time and tried both options before deciding.
From now on, when we identify that the global HQ has the latitude to negotiate for the whole world, we go straight to them. Of course, instead of 100,000 euros, we could perhaps have signed up for 150,000 euros separately for EMEA, APAC and the Americas. But these companies have purchasing departments that talk to each other and could ask to streamline the contracts (by reducing the total value). Signing 3 deals also mean 3 times more negotiations, renewals to discuss, fronts to defend.
There are exceptions, however. At L’Oréal, for example, it was understood that a few contracts with local branches and sub-divisions would first have to be signed before the head office would agree to negotiate a global framework contract.
Getting the means to talk to the real decision-makers
The prospects with whom we come into contact are generally our future users. They are e-commerce managers, account managers, customer support or marketing managers. They are not usually decision-makers and do not have the freedom to subscribe to themselves.
For smaller deals, the decision-maker is usually the head of our end-user. We can afford to approach this future user and move up a level.
For larger companies, it is much more complicated to go from the user to the decision-maker. In the best case, the decision-maker is the N+4 of our contact, and it is long and challenging to get in touch. In the worst case, the decision-maker is in another country or another team and our contact person doesn’t know him! In this case, it is difficult to sign a contract.
The solution we found is to surround ourselves with business contributors who are specialists in the sector. To sign deals with electronics giants, we worked with a former VP of sales in the sector. He knew the organizations like the back of his hand and some of the decision-makers were former colleagues. This has a cost (a percentage of the final sale, over several years), but I don’t think we could have signed this deal without him.
Beware of tenders
Our experience with bids is slightly negative. Nobody does tenders for fun. Usually, it’s because it’s mandatory after a certain amount. Very often, there is already a competitor present before us on the file. The requirements of the call for tenders are then modelled on the capacities and functional scope of the competitor in question, and we don’t stand a chance. The only interest in such cases is to learn at a lower cost what other players in the sector are doing.
If you don’t give up answering all the invitations to tender, you’re just more suspicious than before! For some organizations, knowing the amount at which a tender is being issued is valuable information. The objective is to sign quickly and avoid this.
Making Statements of Work
Nobody wants to develop custom software for a single customer. It’s the best way to shoot yourself in the foot. On the other hand, saying no to everything can endanger a business.
The solution that worked for us was to make statements of work (SoW) when feature requests were close to things that were already in our roadmap. Accepting customer requests meant prioritizing our developments differently. So we signed additional contracts where the client paid us to accelerate the growth of features that we were going to do anyway (and get involved in iterations). And the advantage is that the beta testers are already found!
By gradually implementing these different solutions between 2015 and 2017, we managed to sign our first contract at 100,000 euros all-in in December 2017, 2 years after our launch. Today, we have signed several others, notably in consumer electronics. We are now tackling the childcare and cosmetics sectors!