Trying to do your first software transaction with a new customer and expecting them to do a deal that passes the revenue recognition hurdle and is in mid-six to seven figures is unrealistic in todays reality unless you are a large stable company in the business with a core application that they ‘need’ to run the busines.

I could also go on about the fact of the big perpetual transaction actually hurts the vendor / customer relationship, but that would violate the spirit of this forum.

I’m a enterprise sales guy. Been one for a lot of years. Been the 1k forever. I am the wolly mammoth I wrote about.

Fisher

In fact, I believe just the opposite of Jim’s post to be true. A company with multi-million dollar investment into SAP will be less likely to yank it out and, thus, SAP need not have a high priced person managing the account.

On the flip side, no business buyer in their right mind is going to sign a six figure check for a new, cutting edge solution without having a relationship in place. Software (whether installed or as a service) hasn’t been commodotized yet. An investment still needs to be made and people want to invest in products and services that will be supported in 12 months.

The days of closing 7 or 8 figure deals are slowly dwindling, but the death of the enterprise sales rep has been greatly exaggerated.

Here’s our problem: We *have* to build relationships and do selling the old-fashioned way at least partially. We can’t go 100% the online or inside sales way – our clients are not buying services like ours by using their credit card online. But our deal-sizes are not that huge, and therefore the traditional way would be too expensive. Moreover, we play in a niche and so our market isn’t super-huge.

Either we grow slowly without salespeople or we grow fast but riskily with salespeople. Rock and a hard place…

However, my sense is even (or especially) for small traditional license-based software company, you still need an AE.

Someone has to drive the buy/sell process inside the customer
- ensuring that the right people are at the right meetings (customer people I mean),
- understanding the needs of the customer and which products might fit those needs,
-understanding and deflating buying obstacles that the end user/purchaser may not be aware of or able to get around.

Additionally, you need a customer champion within the selling org who can
- get the right sw company people to address the needs/questions of the customer
- ensure that any outstanding customer issues are addressed
- keep product mgt and dev folks up-to-date on changing customer needs

An AE may not be the only way to do the above, but my sense is that it’s one way that works and will thus continue to be employed.

Further, my sense is that you will even see this model continue for Saas companies as they go after larger deals or get a wider footprint in an existing customer. I wonder what the ratio shift of sales to marketing in Sales & Marketing costs of established Saas companies has been.

mark