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Which Is Harder: Selling to a Big Firm or a Medium-Sized One?

SCENARIO: You're an experienced sales professional selling a product in an industry that you know quite well. Your manager gives you a choice between two hot leads. One lead is for a large, internationally- known enterprise; the other is for a medium-sized, regional business. The potential deal size and up-sell potential are the same in both cases.

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The correct answer is "The large enterprise".

One of the great myths of B2B selling is that selling to a large enterprise is harder than selling to a medium-sized business. It just ain't so.

Large enterprises, regardless of industry, tend to be similar in terms of corporate structure -- hierarchical and segmented into well-recognized roles. By contrast, mid-market firms enjoy a wide variety of corporate structures (networked, collaborative, consensus-driven, loose affiliations, etc.) and may have all sorts of shared responsibilities. That makes it more difficult to figure out who's actually making the decisions.

Large enterprises also tend have well-developed processes for purchasing different types of products. While those processes may not always be to your advantage, they're usually well-documented and well-understood. Medium-sized businesses often lack that infrastructure which may mean taking the time and effort to build a process so that your product can be purchased.

Large enterprises also tend to be similar in financial structure. They're almost always publicly held, with publicly-stated goals and salaries for the top executives. By contrast, medium-sized firms can have all sorts of financial structures, and if they're privately held, it can be very difficult to figure out who's being motivated short term versus long term, etc. That gives you fewer leverage points.

Large enterprises also tend to have similar business strategies within any given industry. For example, there is very little difference, in terms of overall strategy and operational behavior, between Toyota, General Motors and Volkswagen. Figure out how to sell to one, and you're pretty much set up to sell to the rest.

Medium-sized businesses tend to be far less predictable because they generally have unique business strategies. The reason is simple. If what a mid-market firm provides isn't unique, the firm isn't likely to remain in business for very long... because a larger competitor will force it out.

For example, two decades ago, thousands of small chain stores erupted around the country that provided high speed copying services to small businesses. One of these chains, Kinkos, eventually achieved critical mass and used economies of scale to undercut the other local franchises, eventually driving them out of business.

This happened because providing reproduction services to small businesses is insufficiently complex and unique to justify the presence of a mid-sized firm. Because the service is all a matter of who can buy the equipment and paper cheapest, there's no reason for a mid-sized firm to exist, except temporarily.

Thus, whenever you find a successful medium-sized business, you need to dig deeper to find out what's unique about what they're doing in order to be successful. And that takes extra effort, which is going to add time to your sales process.

So, all other things being equal, your best choice - in terms of likelihood of developing a successful sale -- is probably go after the larger company.

READERS: Anyone care to argue this point?


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