Signing up a big-name client will give your start-up great momentum.
But are you up to the challenge to secure and maintain this clients?
Over the last 12 years I’ve had successes and failures in getting big-name clients to buy my products.
Benefits of signing big-name clients:
- Endorsement for future customers. Nobody wants to be the first customer! A well known brand that buys your product will give other prospects more confidence to buy from you also.
- Financial benefits. Larger customers are more likely to pay their bills and can be your highest paying customers.
- Expanded use of your product. A larger customer is more likely to be a higher consumer of your product – in both volume and features. Increased usage builds the popularity and growth of your product.
Challenges of signing big-name clients
- You take a risk when investing your limited resources into these opportunities. Can you afford not to acquire this prospect? Conversely you could spend the same amount of time acquiring a portfolio of smaller customers.
- Also larger companies have much more bureaucratic oversight. At one stage I had verbal agreement with a big multinational, however the legal and contracting process still took an additional 4 months! Make sure these deals are worth it!
- Too much focus on acquiring your big-name client could affect your strategy to scale your start-up.
Challenges of retaining a big-name client
- Too much influence on your product roadmap is never a good thing for a start-up wanting to scale!
- Unequal relationship in commercial terms and the client expecting “freebies”.
- Your big-name client may only be a small consumer of your product. Your sunken costs in acquiring your client may not be recovered.
Strategies to consider
- From the first meeting and at every meeting with your prospect, always confirm/reconfirm the decision process:
- What are the next steps?
- When do they expect to confirm with you?
- Who is the decision maker?
- What are the obstacles and how to manage?
- Continually review opportunities that are consuming time and resources. Don’t have stars in your eyes! Be pragmatic and drop them if you have to. Then focus on growing your portfolio of opportunities. Your opportunity could return at a future date. Keep your pipeline reports focussed on opportunities that are still real.
- While negotiating with big-names set your limits on how much you will concede. A long term relationship will not eventuate if one party feels they are being exploited. Also be calculating your own and your customer’s BATNA is. BATNA is: Best Alternative to a Negotiated Agreement. BATNA will help you understand your true position.
I love signing big-name companies! It is such a buzz! But I’ve also had a good portion of frustrations and failure when they don’t mature. By keeping this structured approach you will make better decisions for your start-up.