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Enterprise software typically consists of long sales cycles and is rarely built like consumer-facing apps. A new breed of company is building software for the end-user, which then spreads inside the organization. This trend is causing companies like Slack, Yammer, and Box to grow at an alarming rate. This article talks about:

1. How this trend opens up a larger market inside an organization

2. How employees end up pitching the product internally

3. Why usage matters so much

4. Challenges with this approach

  • LM

    Lincoln Murphy

    almost 5 years ago #

    This is a great post, but it missed one major point, and that is how the "selling" actually works.

    I can't speak for Slack - so if anyone can, please weigh in - but Yammer, Box, and other "land & expand" plays start with the "consumer" or end-user to bring the product in.

    This happens, by the way, with little to no exposure to the end-user of pricing or even that there's a paid plan... because the individual user will most likely not be the one who actually gets "sold" to; they aren't the economic buyer in this case.

    Okay, so then the vendor leverages those users to drive adoption (while orchestrating that process through their product design) within the organization. Often this results in disconnected "pods" of users in one company. Marketing starts using the product. Sales uses it. Product uses it. But they don't use it together.

    BTW, understanding and exploiting organic network effects to drive intra-company virality can help adoption expand beyond those pods, but that’s a discussion for another day.

    In the case of Box, they found that like 90% (or some super-high number) of the people in a company have a personal Box account, and most use it for work at least a little bit, but they aren't all connected under one business account.

    Then at some point, once the vendor sees some level of critical mass within a company, they reach out to who they think is the economic (and technical, usually) buyer. Oddly, it's often IT and they reach out to to say "you have [some huge number] of people using our product; how would you like to have ownership over data and control over access? Great, it's $5/user/mo" Or whatever.

    Because they do this after “critical mass” within the company has been reached, it makes it harder for the company to just rip the product out and not pay.

    So the "consumerization of the enterprise" is very real, but it acts as a foot in the door (or, several feet not just in the door but all the way in the house, with people in 'em walking around) but the actual sales side of it often looks very similar to an enterprise deal.

    • LT

      Luke Thomas

      almost 5 years ago #

      @lincolnmurphy completely agree. I should have been more descriptive regarding how the selling happens.

      While selling the *entire* company is the holy grail for these companies, I've seen a "stepped" selling take place too.

      For example, let's say I signup for Slack. It's a product that could be used by the entire company, but I only care about using it inside the marketing department right now. I pitch my boss, and he buys 5 seats for his employees. Meanwhile, someone from sales does the same exact thing. I've seen sales follow-up with these "pods", and expand the base to include more people in the department/company.

      With that being said, I have seen the end-user be the buyer, and then bring the product inside the company. It's rare, but it happens :)

      • LM

        Lincoln Murphy

        almost 5 years ago #

        Thanks for following-up on what I said... my comment came off as "that's the only way" ... I meant it more as "this is one (potentially super-powerful) way" ... good stuff.

    • LT

      Luke Thomas

      almost 5 years ago #

      Also thanks for taking the time to give clarity on this topic. It's super helpful.

  • JM

    Jack McDermott

    almost 5 years ago #

    Loving this idea--seems like more and more apps/services are taking this "one to many" approach. Curious what tactics can increase adoption/conversion moving up the chain to managers--anyone have ideas here?

  • LS

    Logan Stoneman

    almost 5 years ago #

    *That moment when you read an article, which validates all the sales efforts you do*

    Thanks for the share @ryangum - I'm currently in the education industry & we decided to sell through professors, then departments, then to the institution. By creating champions across each level of the universities, we're finding our sales cycle decreasing dramatically. Also, by communicating directly with our end-users, we can truly understand their problems to build a better product-market-customer fit.

  • SS

    Salman Sharif

    almost 5 years ago #

    This idea is being adapted by many firms already, and it can really help bolster organization's growth

    • LT

      Luke Thomas

      almost 5 years ago #

      Hey Salman, I'm always looking for more examples of companies selling BigCo software through the end-user. If you have any thoughts, I'd certainly be interested.

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