The Death of Relationships?

This is a strange post to write. It makes me feel old, like that crusty-old attorney who swears he’ll have his secretary print out every email until the end of time. Except now I’m that guy whining. But I digress…

Since starting my business close to a decade ago I’ve done dozens of enterprise deals in data licensing and software, many in the low six figures. For context, negotiations range from protracted and complex to moderately straight-forward (but never faster than three months). The lifetime value of contracts often exceeds $1m–certainly a lot of money for an individual, and not chump change for a young business.

I’m continually astounded by how many of these deals are transaction-led, with key elements of the relationship ignored or untouched as part of the deal process. As entrepreneurs, the relationship means the world to us. Inspiring trust and confidence can help BigCo ‘get over’ the fact we might be a young company, have unproven tech, etc…

This isn’t an argument for bringing back the three martini lunch, but business can’t get done on its own. Does the rise of millennials and shift to SaaS portend a real shift in how enterprise deals get done? Relationships exist because contracts can’t spell out what to do in every (unforeseen) situation. Minimize the relationship and increase transaction costs and watch trust decline. This will likely have all kinds of second-order impacts.

One could chalk up deals that go sideways as the fault of sales management but I can’t help wonder if something else is at work. Below are a summary of observations based on my experience.

  • Enterprise buyers aren’t sophisticated; they are consumers, just like you and me, but they happen to have different day jobs.
  • The rise of prosumer/SaaS models means more technical integration and less account/relationship management; power in biz dev/account management shifts to PMs and technical management
  • With a counterpart of limited professional experience, negotiations degrade to haggling, the nemesis of a win-win deal. Inevitably price becomes ‘the’ issue, neglecting other powerful levers like distribution rights, usage model, exclusivity or updates.

What do you think? Are millennials ‘responsible’ for a shift in B2B deals, or does the nature of technology drive this? Is there value in having a seasoned biz dev operator?

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