For many startup founders, dealing with corporates is a huge challenge.
Corporate customers take their own sweet time to close deals and you have to deal with many decision makers which often results in spending a lot more time and effort than what you had probably accounted for.
Here are a few suggestions for startups to deal with corporate customers:
Identify the decision maker very early in the process.
You move from one division to another – and the deal is evaluated by several stakeholders. And each stakeholder carries his/her ego and questions around the deal.
As a founder, your aha moment will come from identifying the decision maker in the entire process. The earlier you figure out, the better it is.
And for your information, the decision maker isn’t always the senior-most person – but somebody else. Identify that ‘somebody else’ very early in the process.
Never ever take the ego flight.
You will be questioned on your credibility, your company’s differentiation in all probability, this will hurt your ego quite strongly.
Imagine a junior person from customer side asking you unintelligent questions around the product ! Let it be. Don’t bring your ego to the table.
Be prepared for a long timeline to close the deal.
Unless you are very lucky, expect the deal to take its own sweet time. 3 months? 6 months? 1 year? Well, it all depends – but for sure, it won’t happen in a fortnight.
You will be tested for your patience.
Importantly, be prepared about the worst situation – what if the deal doesn’t go through?
How will you handle the situation? How will you justify the time and effort spent in the deal? Read the next point!
Don’t be the decision maker from your side. Try to have a few more ‘bosses’ from your side, so that you can leave the final decision and not always give in to client’s pressure. It’s always a good idea to assign somebody from your team to co-lead the deal. This will help you focus on other aspects of the business and importantly, enable your team to learn from client interactions.
Always – and always look for the fineprints in the legal document.
Congrats on winning the deal!!! You definitely deserve a pat in the back.
But hold on – have you read the fineprints in the agreement? Couple of points to look for :
- Is there an exclusivity? Can you sell your product / service to competing clients too? If not, then what are the terms of exclusivity?
- Payment terms : How long will it take for you to receive the payment? Assuming that you do need a healthy working capital equation, you need to be very sure of the payment terms and ensure that the duration is on your side.
- Customization ?
Assuming you will be customizing the product for the client, you need to be very clear on the pricing part of this.
- Termination clause?
What if you or the client decides to terminate the contract ? Who owns the IP, in this case? What would be the timeline to terminate the contract?
Ensure that you are very clear on the agreement and the same has been vetted by your lawyer.