What Makes the Enterprise Drone Sales Cycle Different?

Part 1 of Creating an Enterprise Drone Program: How to Avoid Communication Breakdowns and Time Wasted Between Enterprise Clients and DSPs

As someone who has worked with drone service providers (DSPs) to help them understand what they need to know on the front end to perform their best as well as with enterprise clients to establish a drone program, I’ve seen how communication breakdowns and unrealistic expectations can capsize efforts to effectively utilize drone technology. By shedding light on some our shared experiences technology stakeholders within organizations seeking to become involved with drone operations can learn to communicate more effectively, while DSPs will better understand what they need to do to best serve their enterprise clients. With this better understanding on both sides, the industry as a whole will become stronger.

Changing the way we communicate and approach this technology might sound simple, but there are numerous gaps in our collective knowledge, despite the never-ending supply of innovation and curiosity this industry offers. That can mean differences in the way we communicate, prioritize tasks and solve problems. Often, we can be looking at the same issue but through different lenses. Solving those problems means being able to better understand where they often begin, which requires an in-depth look at the drone sales cycle.

Exploring the Drone Sales Cycle

The UAS industry is a melting pot of professionals. There are a wide array of educational pathways and professional experiences that can lead people into this emerging market. Tech gurus, veterans, active duty military, manned aircraft pilots, recent college graduates, engineers, mechanical experts, marketing types, photographers, miners, railroaders, claims adjusters, public service members, green energy, oil and gas, wildlife conservation, manufacturers, farmers and many more are all part of this industry. This much diversity leads to an equally diverse application of drone technologies across industries.

This diversity doesn’t just effect the technological applications since it also drives the sales cycles. As an example, the sales cycle for drone-related products/services in agriculture may look very different than it does in oil & gas, because of how drone operations originate within any given company will vary based on how that company is structured and how it has chosen to apply the technology. While a company’s structure is largely driven by industry standards within their core industry (i.e. oil/gas, agriculture, insurance, etc.), organizational behavior as a whole is predictable. Due to this predictability, there are consistent barriers and subsequent solutions that can be applied to each stage of the UAS sales cycle, regardless of how the technology is being used.

There are slight variations to the number of phases contained within a sales cycle, but the most common descriptions include six phases: Prospecting, Qualifying, Proposing, Negotiating, Closing, and Referrals. The uniqueness of drone technology is something that needs to be considered and potentially addressed at every point in a drone program sales cycle.

Prospecting

During the prospecting phase, DSPs will work to identify potential customer leads. Common tactics during prospecting include purchasing a list of leads, networking, using referrals from existing or previous customers, conducting surveys, monitoring web traffic and market research. Often times this requires cross-referencing between traditional industry pools and UAS media content in order to identify targets.

Enterprise clients are often bombarded with communications from companies seeking to do business with them - not just DSPs, but all sorts of contractors, consultants and others offering products or services. Most enterprise clients will have a standard method for handling solicitations. Often times these processes are organized based on the department / functional area affected and type of product, which many DSPs would fall outside of.

There are some significant prospecting challenges in the drone program sales cycle that need to be addressed at this stage. Many of them stem from the fact that numerous companies do not publicly share information about their use of drones. Effectively prospecting what type of organization might have an interest in starting a drone program can be difficult when there’s little information about others that have or are going through a similar process. This limits the potential pool of publically identifiable prospects by default. There is little that can be done to overcome this barrier. The only solution is time and tenacity. As a DSP gains momentum and builds their reputation within the drone market, other opportunities will begin to show themselves.

Traditional methods like traffic monitoring are just as likely to catch competitors scoping out your services or product as it is to catch potential customers. While this could be said for any industry, it’s more prevalent in an emerging market like UAS. Methods for receiving and processing solicitations related to UAS services/products are not likely to exist and/or be implemented consistently yet within the enterprise, meaning any initial outreach efforts may go unprocessed.

These challenges are not insignificant, but getting past many of them can simply be an issue of research and collaboration. Many understand the potential value the technology represents, and that understanding can be an incredible tool for anyone at this stage.

Qualifying

The DSP Qualifying Process

In a traditional qualifying stage, after you have your list of prospective customers you’ll need to identify an actual person or group to contact in order to verify whether or not they are a good fit for your offering. Some methods used in contacting prospects during the qualifying stage include cold calling, email campaigns, face-to-face meetings or contacting people through social media channels. The overall method for qualifying prospective customers is to conduct a preliminary needs assessment. These can be as informal as a 5-minute phone call or as formal as a site visit or demo, depending on the product/service being offered and the size of the client. The objective during this phase is to move a big list of prospective clients into a targeted list that only includes potential customers that are both willing and able to purchase your services, product or offering.

“There are typically two types of contacts within an enterprise; champions and decision makers. Initially, champions could be a primary contact based on a opportunity lead. They are called champions because they champion the cause of the drone program throughout an enterprise. Some large enterprise clients have a decentralized org structure where [decision makers with approval authority within the Corporate HQ] may be [responsible for making company-wide decisions], but actual purchasing and [implementation approvals occur]at the regional level. “ –Andrew Maximow, Chief Drone Officer, Firmatek

The qualifying stage can be challenging for both drone service providers and technology stakeholders within enterprise companies. DSPs should expect to invest a lot of time in this stage identifying the right point of contact and gaining initial buy-in from said contact.

DSPs should expect and anticipate challenges when searching for the right contact within a large enterprise company. It will likely take several attempts to find a “technology stakeholder” (AKA champion or sponsor) who is invested in the drone concept and/or involved with drone operations for the company. These contacts can be literally anywhere within any given company and this is where we see that professional and industrial diversity start to complicate sales processes. There is no one way for companies to go about engaging with drone operations. The functional area that is ultimately tasked with establishing drone operations is largely dictated by the industry, the company’s core mission values, company-specific logistics and the organizational structure as a whole.

“Oftentimes the best initial contacts at enterprise-level companies are the individuals leading drone adoption efforts at the ground level, in other words—the actual users of the technology. Alternatively, these contacts could be the people that oversee operations that could be improved through drone usage, even if they don’t have much specific drone experience to date. However, end users of the technology on the ground are often not empowered within a company to approve [the] level of funding [needed for a large scale drone program].” –David Bowen, VP Product Strategy, Measure

Communication is a challenge for any enterprise, not just in regard to drone operations, but in general and can often lead to communication siloes. Departments can be completely unaware of what other departments are doing, and often times there are communication gaps between field locations and corporate headquarters. As a result, drone operations can pop-up in multiple areas of a company and function independently for an indiscriminate amount of time before they become aware of one another or successfully integrate.

DSPs should not assume that everyone within any given organization has the same knowledge. This may seem obvious, but I have seen this inaccurate assumption negatively impact sales first hand. Be aware that it is possible for hundreds, even thousands, of employees at an enterprise company to be oblivious to the fact that their company is using drones, and even those who are aware that drones are being used most likely do not know the extent to which they are being used. All of this is to say that it isn’t enough to reach out to one or two contacts at a company when it comes to drone services. You must find someone who is at least peripherally involved with drone operations.

“At this point, only a handful of companies have dedicated UAV teams, and the reporting structure is not always clear (even within the organizations),” -JT VonLunen, President, RMUS

Identifying the right contact for drone-related sales can be challenging for DSPs because applications of drones are often de-centralized and lacking one straight forward contact or entry point. As with any corporate program, there are likely to be several decision makers between you and your sale. This can make the qualifying stage for UAS services uniquely time-consuming.

The Enterprise Qualifying Process

On the other side of the equation, enterprise company contacts have checks and balances that are not obviously visible to the DSPs. Unless you’re talking to the President of a company, your contact must seek buy-in from the person or people above them, and then further approvals from other departments such as finance, legal, compliance, etc. Contacts at enterprise level companies can often feel as though their hands are tied and may lack the ability to change the situation. Being sensitive to the organization’s political structure is key, even if you’re not aware of what that structure looks like. Just know that there is a political landscape and any contact you work with is subject to it.

The first challenge for any technology stakeholder within an enterprise is for their drone operations to be considered as substantial enough to be viewed as a formal program or department, such as being issued their own budget. I can pretty much guarantee that the vast majority of enterprise clients do not have a drone-specific cost center specified within their procurement systems. At least they don’t yet. There are tremendous backend implications that result from creating new cost centers and adding new data columns to existing internal systems. Because of this, corporations have certain thresholds that need to be met before any new venture of any kind can be viewed as a formalized program or department, including drone operations.

As a result, many companies purchase and use drones for anywhere from 6 months to 18 months or more before formalizing their operations. In fact, purchasing equipment is usually the first behavior enterprise company’s exhibit during drone program development (although it shouldn’t be). Most companies initially focus on purchasing drone equipment to the exclusion of all else. This puts any drone service provider that does not sell equipment at a disadvantage because the enterprise is only focused on step one, acquiring drones.

This is a classic case of putting the cart before the horse, and while drone service providers are well aware of the challenges this approach will create, it can be impossible for any external group to persuade a well-established enterprise company of this without the involvement of influential decision-makers inside the organization. Similarly, technology stakeholders may be aware that purchasing equipment isn’t all they need to start a drone program, but again, their hands may be tied, and purchasing equipment is necessary to showcase the value of drone enhancements to executive leadership.

“Nearly every company takes a wait and see approach in UAV fleet building. They will often only purchase a few units prior to scaling up. Quite often it takes 12 months just to get UAV policies approved.” – JT VonLunen, President, RMUS

Lastly, many companies strive to keep all of their services and systems internal and are generally wary of external service or product providers. There are plenty of good reasons for this type of mentality that I won’t go into here, but just keep in mind that this barrier exists (for good reason) and it is another challenge that DSPs must navigate through when qualifying potential sales.

These challenges can be overcome with better communication on the part of both enterprise clients and DSPs to determine how and if there could potentially be a fit between the enterprise’s needs and the DSPs offerings.

Proposing

Traditionally, companies will pitch their services/products to their potential customers at this stage. This phase is especially time-consuming in emerging markets where needs and offerings are still being developed and/or fine-tuned. This can put a strain on UAS service providers that may otherwise not be felt in more traditional industries. Common tactics in the proposing stage include in-depth demos, additional needs assessments, other intake efforts and of course, presentations.

Challenges during this phase include educating prospective customers about drone technology, ineffective or non-existent workflows and management processes related to drone operations and overcoming misconceptions about drone technologies. All of which boil down to an extended, and expensive, UAS sales cycle.

DSPs are saddled with the responsibility of educating their prospects on drone technology as a whole, while simultaneously educating them on their product/offering. A great example of this is when a DSP completes flight missions for a company in order to showcase the value of their product/service. It’s pretty difficult to show a company how useful your flight tracking software or aerial data analytics tools are without having flight data to work with. This challenge would be present in any emerging market, but when coupled with the regulatory complexities of both airspace and traditional industries (such as transmission and distribution lines, heavy machinery, and active railways) the simple act of demonstrating your product becomes very time consuming.

Some DSPs have reported flying drones for a company for several months in order to show the value of their software/hardware or service. Some DSPs want to do the flying for companies, but many have stated that they are doing the flying now with the goal of having their clients complete their own flight missions in the near future. Ultimately, even the DSPs that do not want be involved with the actual flying of a drone operation end up doing a great deal of flying in order to make the sale with enterprise clients. This is why you see DSPs starting to develop niches within certain markets.

Enterprise clients often have safety and regulatory hoops any vendor would be required to jump through in order to gain access to their field operations environment and the amount of effort and customization that can go into landing the sale can prove useful when approaching identical areas of other enterprises within the same industry and it can also be prohibitive when considering trying to approach a new industry. Once the value of drones is more broadly understood, perhaps DSPs will be able to sell their services/product without having to gain access to safety-sensitive areas of the company to do so. Until then, even drone software vendors must be prepared to do some on-site flights during the UAS sales cycle.

The biggest risk with this is that a DSP can invest a lot of time in educating the prospect on drone technology, conduct several flights, and process flight data without ever receiving any financial compensation. I believe that this is probably one of the most crucial aspects of the drone sales cycle that all DSPs should be prepared for. Gaining the enterprise sale will cost excessive amounts of time and money.

“The challenge is that [your technology stakeholder] may be part of a tech innovation or emerging technologies group and not an operational business unit, so you could end-up spinning your wheels working on demos and proofs of concept projects without getting traction towards a paid contractual engagement.” –Andrew Maximow, Chief Drone Officer, Firmatek

Proposals are only as good as the information provided to the DSP. If the contact you’ve been working with has limited knowledge or misinformation, the pitch will reflect that. As discussed in the previous section, it can be tricky to find the right person or people to work with at an enterprise company. It is common for drone programs to lack formal standards and work processes and as a result, you may be presenting to someone who is excited about the technology, but not necessarily the person with the authority to make the financial decisions you need to land the sale. Similarly, you may be required to present to both the corporate groups at headquarters and then separately to regional management groups.

Lastly, you’ll have to overcome the misconceptions about drone operations. Many enterprise contacts have already tried using another DSP that does some or all of what you do and they may have had a bad experience. Despite being a totally different company, the skepticism is there and acts as another barrier to the successful pitch, although there are other distinct challenges in the proposal phase.

DSP and Enterprise Challenges

There can be a lot of overlap in drone service providers and for technology stakeholders at any company, which can make it difficult to keep up. Over the course of the past three to five years these enterprise groups have had many companies approach them. They’ve sat through many proposals or demos and I can tell you first hand that busy managers, directors and C-suite leaders at enterprise level companies do not care as much as you do about how you differentiate from the other DSPs. Effectively sorting through all of this often requires an enterprise level contact that understands what a DSP provides/does, and that isn’t a small endeavor.

One of the most common pitfalls associated with this issue is an inconsistent use of terminology. That misuse of terminology is actually one of the biggest time wasters I’ve encountered during communications. This is one of those gaps that is created by an industry with such diverse backgrounds and is a symptom of our melting pot.

An obvious example that I see on a daily basis is the use of the term “management,” which is a pretty vital word to be using accurately when you’re an enterprise client looking for UAS management services. I’ll walk you through two examples of how the term management is used to mean different things by DSPs versus enterprise companies.

To a tech or drone startup company “Drone Program Management” typically means inventory monitoring (not “management” although the DSP may use the term inventory management), data storage, data processing, flight tracking and/or fleet tracking, but to enterprise clients “Drone Program Management” means more than fleet metrics. “Drone Program Management” on an enterprise level entails developing an SMS, writing the policies, procedures, establishing roles, responsibilities, disciplinary procedures, employee training, training tracking, employee management, delegation, reporting and more. Reporting not just on how many flights occurred and where, but on the metrics that are important to their company such as amount of time needed to clear a derailment site or number of repairs completed in the last quarter, or amount of money spent on drones per department or subgroup and developing practices to communicate the ROI on the drone program investment.

Likewise, where DSPs say “inventory management”, what they really mean is inventory monitoring. This typically includes flight logs, tracking battery usage, life of propellers, software malfunctions, physical damages, type of equipment, pilot name, etc. This is different than what enterprise clients think when they hear “inventory management” when enterprise clients say “Inventory Management” they mean “establishing policies for applications of UAS, establishing and managing procurement processes, purchasing review and approval processes, cost center tracking, repair and replacement processes and procedures, accident reporting, safety standards and compliance, procedure for assigning employees to UAS, tracking deployment of UAS etc.” If an outside vendor were truly going to be offering “management” they would need to go beyond notifying a company how many flights they completed last week or providing battery usage logs. They would need to have authority within the enterprise almost to the point that they themselves are internal employees.

Best practice for technology stakeholders at enterprise companies would be to also spell things out where possible. Keep in mind that DSPs are not striving to become civil engineers or insurance adjustors, and often times they are not coming from corporate backgrounds. Your job is to provide as much information as possible to the drone service provider so that the solution they pitch to you actually meets your needs. An easy example here would be avoiding the use of job titles and instead using terms that aptly describe the job function that person performs and the extent of their authority. Instead of saying, “Superintendent”, say “A member of upper management with the highest level of regional authority.” Your goal should be to enable the DSP to create a well-rounded solution for your company.

“[Your] champion can be helpful in answering questions, navigate internal org structure and company culture, and explaining business processes throughout the enterprise,” Andrew Maximow, Chief Drone Officer, Firmatek

The bottom line on the proposal stage is that it is going to be time-consuming and it can be very expensive. There is no guarantee that you’ll land the sale, despite having put in a large amount of time and effort, but it is possible.

Negotiating

This is the phase where your potential customer will ask questions and voice concerns. Responding to their concerns and questions is a good sign as it signifies engagement instead of an outright rejection.

DSPs are more likely to agree to tailor their product or service in order to land the client. This is partly due to the emerging nature of the industry and partly the nature of tech-heavy industries. This can cause confusion and puts both parties at risk of diluting the quality of the deliverable. Customization or changes may seem like a good choice at this time, but the DSPs are the experts on drones and the enterprise is the expert on their needs. Ineffective communications during this stage can result in ineffective solutions. Customers have more power in the UAS industry during this phase than other well-defined industries and they don’t always wield that power effectively because they don’t come into the negotiation prepared with a holistic understanding of what they will need to establish a drone program. Look for tips on how to prepare your company to use a DSP in the last article of this series.

Sales in the UAS Industry typically involve the DSP working with a technology stakeholder or operations manager that must gain additional approvals before they can agree to any service or product. Every time a change is proposed during negotiations, the chain of communication and approvals must be accomplished again. This is time-consuming and all involved should expect delays.

Companies often have bidding processes and procedures that DSPs are not familiar with and in some cases even the technology stakeholders are not well versed in this procurement process. These types of gaps will be influenced by the structure of the enterprise and by which department/area the technology stakeholder is representing. The best way to avoid knowledge gaps is to again, gather a cross-functional group within the enterprise and involve them in the negotiation process. Drone programs perform more effectively when they are based on a cross-functional effort and include the right people involved in negotiations. Doing so will save time up front and lay the foundation for a sustainable drone solution.

“Most companies creating a UAV program are focused on the equipment. They get caught up in all the features they think they need. They really need to plan on the creating another division within the company like an IT, marketing team or accounting team. Allocate personnel, equipment tracking, FAA reporting, etc. This type of planning is just as important as the equipment,” - JT VonLunen, President, RMUS

DSPs may be essentially forced to offer more drone resources in order to help their target client establish or maintain a functional drone program, but these efforts can divert time and resources away from their main product/service. An example would be the detailed explanation provided in the previous section regarding DSPs performing flight operations in order to showcase the value of their software or data analytics services.

“Sometimes our sales cycles have been fairly drawn out [exceeding 12 months]. However, the way Measure typically engages with clients just getting familiar with the technology is by utilizing a “crawl-walk-run” approach. We may begin with a demonstration, move to a limited pilot program, and over time transition into repeat operations as our client relationship develops and we prove out the value of our services.”-David Bowen, VP Product Strategy, Measure

Establishing set expectations around resources, costs and process is often the most effective way to get through the negotiation stage, but of course, that will require most of the groundwork to be completed by the technology stakeholder prior to engaging in negotiations with any DSPs.

Closing

Both parties agree to what will be provided and at what costs. Documents are signed and the work begins or the product is sold.

As previously mentioned, due to the lack of standardization surrounding drone programs within more enterprises, it is not uncommon for DSPs to discover additional stakeholders within the company that must be involved in order for their product/service to succeed after the business agreement has been executed. This is why it is imperative for enterprise companies to involve as many areas of the company as possible early on in the program formation process. Failing to do so will make it harder for the business relationship to succeed.

It is also important to point out that it is just as important to include the right type of employees from within the enterprise as it is to include the right functional areas. Forming a cross-functional team of C-Suites Executives is a sure fire way to slow things down and would almost certainly lead to an ineffective end product, but forming a cross-functional team of tactical level managers would also lead to an ineffective solution. A cross-functional group should include a blend of employees with authority and the big picture viewpoint as well as experts from the tactical areas with a strong understanding of the day-to-day needs of operations.

DSPs are very vulnerable and enterprise companies should take this into consideration when outlining the terms of their business agreements because every labor-intensive sale impacts their product. The average UAS sales cycle is about 14 months, with some cycles exceeding beyond 18 months. The fastest UAS sales cycle I’ve ever been involved in was 4 months and that’s because I was on the technology stakeholder side and my full-time job was to focus on the UAS Program for a specific enterprise. Most enterprises aren’t that dedicated to drones and most technology stakeholders have diversified responsibilities that limit the amount of time they can devote to preparing for and establishing a business relationship with a drone service provider.

The fastest sales cycle I’ve ever been involved with as a drone program consultant (DSP) was 6 months, and it was 6 months too long. The consulting firm I was with at the time couldn’t shoulder sales cycles extending past 6 months and our drone services were discontinued as a result. This is the impact that the UAS sales cycle can have on drone service providers.

For the luckier DSPs that aren’t pushed to give up on their drone services, the impact of the long sales cycle can be seen in the product/service itself. Software providers give us an excellent example of this. During the lengthy sales process, software vendors inevitably agree to create customizations that tailor to the systemic and operational needs of the enterprise. Every custom feature has the potential to serve a function for another enterprise with similar needs thus driving future business development efforts. If you create a custom feature that can identify damages on solar panels because you landed a deal with a renewable energy company, naturally you’d use that feature to target other renewable energy companies in the future. In this sense, drone sales can drive the direction of drone service providers.

The second issue DSPs must deal with after the deal is made is the careful business of phasing out the initial program support given to the enterprise in order to land the sale. As discussed in previous sections of this article, it would be difficult to sell a drone service/product to a company without a stable drone program to service. Many DSPs end up providing additional services like performing flight operations and offering training to employees, but these divert resources away from the DSPs core business solution. DSPs may be stuck continuing flight operations for their target client for 6 to 12 months after the initial demo while that company works to identify a different outsourced flight option or establish internal flight operations. This should be considered and addressed during the sales cycle. The DSP and technology stakeholder should work together to develop a timeline for program development that specifically addresses when and how the enterprise will take over the superfluous drone program tasks.

Lastly, regulations change rapidly and this can result in the DSPs product or service becoming unnecessary or conversely, falling out of compliance with new requirements. DSPs are subject not only to aviation-specific regulations but also all of the regulatory bodies that impact their enterprise clients. Even if a DSP is not involved in the day-to-day drone operations of a company, they can still be impacted by regulatory changes. Some effects can be straight forward, like if the FAA changes the Part 107 regulations to allow for night operations without a waiver. A DSP that specializes in night ops could be negatively impacted.

Other effects can be less obvious, like the rail industry being forced to implement positive train control. That’s a regulatory change that does not directly impact the drone industry but it does impact the operational priorities of Class I railroads. Implementing positive train control takes years and requires dedicated staff and financial resources. This can inadvertently impact the amount of resources available for other areas of the company, such as drone operations.

In this sense, the success of a drone service provider delicately rests on the stability of the drone industry and all of the overarching industries their enterprise clients’ are rooted in.

Referrals

This is a standard aspect of any sales cycle. The service provider seeks additional business leads through referrals by (ideally) satisfied customers. In the UAS industry, some companies prefer to keep their drone operations confidential which can hamper DSPs ability to publicize their success. Others have specific communication policies and procedures, so again, public recommendations/endorsements or recognition can be time-consuming or simply impossible.

“Companies will restrict use of their company name for marketing purposes, despite a successful working relationship. Referrals, case studies, and testimonials are some of the most powerful sales and marketing tools. Prospective clients are always looking to understand what we have done for companies in their peer group; it helps them visualize what drones can do for them and how Measure can deliver.” -Carmen Smith, VP Marketing, Measure

The quality of work provided by a DSP may be hard to discern in the event that the drone program as a whole is dismantled or scaled back due to reasons outside of their control (i.e. international trade fluctuations, financial setbacks, management changes, etc.) There is no easy way to solve this problem, but it’s always OK to seek out general letters of referral or public endorsements from corporate communications groups. You may not receive one, but it doesn’t hurt to ask.

“This is particularly true when expo and conference organizers are seeking compelling end-user use cases with real ROI to lend credibility to a public presentation. These confidentiality requirements imposed by early adopters not only limit our self-promotion but also restrict our ability to move our industry forward for those who don’t want to be first and looking to others to lead.” –Andrew Maximow, Chief Drone Officer, Firmatek

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