6 Business Development Tips to Land Multi-Million Dollar Deals
When it comes to startups, if you’re not growing…you’re moving backwards. No matter how good of a product or idea it might have , a business will not succeed without sales. While investing in Facebook ads, capitalizing on SEO trends and writing great content can help bring in sales, your revenue comes from closing big deals.
Closing large deals requires much more than a few cold calls and sales tactics. The deals are bigger, and therefore the requirements and scrutiny are also higher process.
So how does a startup position itself to close deals with the biggest companies in their space? Here is a list of factors that will help you quickly improve your business development efforts and close B2B deals with big companies.
1. Reach out by every means possible.
A warm introduction is the best way to reach a contact but we don’t always have that luxury. Luckily, social media searches can help you get in front of your contact.
Use LinkedIn to search the name of the company and the words that describe the title, role or division of the person you need to meet. Include words like “venture”, “innovations” and “new technologies,” as those teams can be responsible for onboarding new technology. Send a personalized invitation.
Another successful trick is to search for alumni from your university who work at the same company. Ask them for an introduction to the right person or department.
2. Build a product they can trust with their brand.
The best companies cannot afford to tarnish their brand. They avoid taking chances on a product that they don’t trust. You need to pass the “trust” test.
To do this, start with a product of superior quality and value. There’s no way around this. Do not compromise on any part of the production quality or user experience while developing your product.
My friend Andrew Thomas, co-founder of SkyBell and one of the top entrepreneurs in the Internet of Things industry, has closed deals with the biggest brands in their space, including Honeywell, Amazon, Nest and Alarm.com. While positioning their video doorbell product, Thomas found success by over-sharing a commitment to their brand.
“We explicitly stated how serious we regarded their brand and worked with their quality control teams to affirm our product quality.” His advice, “prove to them them that they can trust you with their brand.”
3. Ask questions and listen.
Sales boils down to our ability to quickly gain information about the prospective partner and their needs. The best way to do this is by asking good questions and letting your prospect do most of the talking. Asking questions leads your prospect to tell you what they want, how they want it and when they need it. Then you can frame your responses to accurately address their needs. It’s far better than trying to “pitch” them on your product.
It sounds simple, yet produces results. The key is to truly listen to them. Resist the urge to always focus on what you’ll say next. Also, don’t interrupt or speak for them. This helps you build strong rapport based on trust and respect – and helps you be more likable.
4. Create a vision built on mutual purpose.
At big companies, decisions are made by many people of various authority levels in multiple divisions. Success requires that you not only sell your contact on your product – but that you are so clear in defining a value proposition that your contact can then sell the idea to other key people in their organization.
How do you do this? Co-create a vision built on mutual purpose. Work with your contact to define the value proposition in the present and future – with the most amount of clarity possible. Business partnerships work best when your contact owns the solution as much as you do.
5. Don’t sign a deal that harms you.
It’s easy to get carried away when you’re working with the biggest companies in your space. The volumes are bigger, there are more users and the orders tend to have more zeroes. It’s harder to say, “No.” This is something that hurt our company badly. We are in the credit card payments space. We landed a major client in our first few weeks of launching our company. We eneded up losing money because we weren't sure of everything we were doing. It almost dragged us under.
Resist the temptation to say “yes” to everything. It will do you no good to over-extend yourself and go out of business, which is common with these types of deals. Sometimes it’s the deals you don’t do that are the best decisions you’ll make.
Here are some common land mines to consider:
- Exclusivity – Unless 1+1 = 3, avoid granting a partner with exclusivity for certain markets, timing, features or product.
- Ramp-ups and lead times – Define a ramp-up schedule to pace your delivery of product and define lead times to properly manage your manufacturing. Big companies can “kill you with kindness” by ordering large amounts of product that you can’t fulfill in time.
- Consignment – If you have hardware, consignment is rarely a good idea. You want firm purchase orders before you go build large volumes of product.
- Profitability – Unless you are funded as a high-growth customer acquisition model, don’t take a loss on product sales just to placate a big partner.
6. Be patient.
Closing deals with big companies can take a long time. There will be many times when the deal loses momentum. Remain patient and keep a long-term outlook. “We all think we're persuasive, but sometimes there isn’t much you can do for a deal except be patient, polite and present,” says Thomas.
While times are slow, you should reach out every four to six weeks to provide an update. Send emails with news, press coverage, awards and anything else that will keep them excited about your product. While this may seem annoying, it keeps them in contact and aware of everything you're doing.
Effective business development efforts bring in the revenue and strategic positioning you need for long-term success. A business development leader must be willing to prospect, handle rejection and keep going. They must create trust with their counterparts and create a vision that results in profitable outcomes for both sides – and then get both sides to act on it. The success of the business depends on it.