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Four Ways For Enterprise B2B Technology Companies To Grow Their Contracts

Forbes Agency Council
Elliot Schimel

Many B2B enterprise technology companies face the same challenge: graduating from $100K annual licenses to million-dollar annual licenses. While this is usually seen as a business dilemma, for many companies it is really a marketing challenge.

It may appear that failing to land those bigger deals is a structural, leadership or product issue, or simply because of the sales team’s inability to close those big prospects. Often, however, the problem lies in your marketing and branding efforts. How you position your offerings to prospects and clients can determine which decision maker within a company evaluates the value and budget for an annual license. The key is to prove your value to business users at large companies that have the ability to sign off on $1 million contracts.

How can companies prove their increased value to these executives at Fortune 500 companies? The answer frequently is not reliant on the company’s technology or offering. Often, there is a need to modify behaviors and perceptions that served them well to get to their current $100K contracts, but become detrimental when making the leap to contracts over $1 million.

Many companies grapple with these challenges while attempting to reach that next level. CEOs, consider these philosophies and strategies in order to start landing those million-dollar contracts:

1. Consider becoming a business solution instead of a technology platform.

Companies usually start out by promoting their technology capabilities to get investors excited and demonstrate scalability. But positioning a company as a technology platform could eventually devalue it and put it in danger of being relegated to the dreaded franken-stack, treated as nothing more than infrastructure to be manipulated by IT. If you want to get a bigger piece of a buyer’s business or sell your products and services to a larger company, I believe you must position yourself as a business solution.

Technology may drive your product or service, but it’s the business solutions and result that will attract the C-suite executives who sign off on larger contracts.

2. Don’t fear becoming a 'consultant.'

There used to be a negative association attached to technology companies that were also seen as service companies, since the assumption was that they would be more difficult to scale and, therefore, would command lower valuations. That has changed.

The C-suite and VP-level executives at large organizations who are needed to sign off on major purchases demand expert consulting in tandem with a product, not a technology platform that they need to play with to get results. After all, enterprise solutions and advanced data analytics offerings often require sophisticated analysis to generate the insights needed to glean optimal value. In these scenarios, consulting adds value and provides opportunities to offer more robust customer service.

3. Consider doing away with the freemium model.

Freemium models can be used as a marketing tool: a vehicle for getting a prospect in the door, with the goal of upselling them to the full version of a product. This can be an effective tool in the early stages of a B2B tech company’s life, but later it may serve to undercut sales efforts. It begs the question: “Why would I pay an annual license of $1 million when there is a version that is free?” 

4. Look into establishing a user conference.

B2B companies may not think they need a user conference, but an event is table stakes for vendors that service large companies. Creating a user conference can show that a company has evolved from a startup to an established company, has a client base and will not pivot its core business. In other words, one could consider it to be a stable and sound partner.

Additionally, our research shows that nearly all decision makers at mid-sized and large organizations say their experiences at events are highly influential in choosing a vendor, and 61% of these executives attend at least three events a year. Why not invite them to an event that is all about the value of your company? 

All of these suggestions have a common thread: They require companies to let go of the short-term in favor of the long-term. This can be painful at first because it will be necessary to retire the tactics that helped your company reach its current position, and can be exacerbated because the frequency of “easy small wins” may lessen as the company aims for larger deals that involve more decision makers and take longer to close.

Following through on some of these actions can lead to growing pains, and you may encounter naysayers in the organization who do not want to change the course. Not only will the strategy that got a company to its current inflection point likely decrease its opportunity for continued growth; it can also often lead to failure.

Put another way, when B2B tech companies reach that inflection point, they need to start dressing for the job they want, not the job they already have.


