Consumerization of Enterprise Sales

In 2004, The Consumerization of Information Technology was published talking about how consumers of devices are penetrating the enterprise. In the past few years corporate strategies have changed. Organizations are now thinking about how to incorporate their employees assets into the enterprise. Employees bringing their own phones and laptops and connecting them to corporate resources.

I continue reading articles on how enterprise sales is changing. These articles state how enterprise (or b2b) startups are changing their selling tactics. The new approach looks more like traditional sales and marketing of consumer products rather than business software.

All fingers point to Salesforce starting this way of thinking. They used a bottoms-up approach to target individuals in the enterprise, outside of traditional sales channels, with self-service signup.

Many new enterprise startups have been successful with this new approach including Salesforce, Dropbox, New Relic, Yammer, and Github. This new approach spends more on marketing than a traditional sales force. The goal is for Potential targets to easily find or hear about your services and want to try it themselves.

Once enough users inside the organization value the software the purchaser will come to the startup to purchase the software. The purchaser reaches out to the startup because of line items big companies require from their vendors such as support, integration, training, compliance, administration, and security. All services which the startup can leverage to charge an enterprise price point.

Point Solution vs. General Product

There is a difference between a true B2B product, such as a database vs. a product that can be used by numerous people inside of the organization.

Yammer is a great example of an enterprise product which benefits from the consumerization of the enterprise. Their market size is big. The entire organizations can benefit from better communication and the customer needs to invite others in the organization to use it for it to work. They have a strong value proposition and viral growth.

On the other end of the spectrum is a B2B product such as an enterprise database, such as Cassandra. Cassandra which is commercially sold by DataStax doesn’t use a consumer style customer acquisition strategy. They use a traditional sales approach and it seems to work for them.

Will This Work For You

This new approach for acquiring customers is exciting. Startups are excited because they can get lots of customers quickly. Venture capitalists are excited about this approach because it means less money for them to invest. Startups don’t need spend money on traditional sales channels.

These tactics work for enterprise companies who have already figured out the majority of their business model. They can use the new approach as their channel. For this to be work however, the startup needs to have a full understanding of their value propositions. These can be found through customer development and minimum viable products.

Startups shouldn’t use these methods to acquire users until they have a firm understanding of their value propositions. The founders need to get out of the building and validate their hypotheses. These potential customers are found using the traditional sales approach.

Traditional Sales Isn’t Going Away

People still argue the traditional sales approach works. They argue the only affective thing with enterprise sales is doing enterprise sales. This means directly selling or directly marketing to your potential customer base. This means customers can be found by:

• Targeting them at conventions they frequent.
• Leveraging contacts for a warm introduction.
• Directly reaching them through cold calling and emailing.

These approaches still work on older generations and older organizations. As younger generations start taking over more senior positions, sales and marketing tactics will change. Some startups can benefit from the new approach but not all large enterprise are ready for this shift.

For instance, there are many enterprises that want on-premise solutions. These organizations don’t like data being outside of their control. The new approach won’t work for them.