Our software product is sold to be intalled on the client side We are targeting large companies who can truly benefit from it and see the ROI. The challenge is the long sales cycles and being a start up? Is their any way to shorten the sales cycle? (ie let's say by bringing your price under a certain bar or talking with someone specific in the company) How do you overcome the fact that you can't provide references yet?
There are a lot of company's that have done exactly what you are trying to do: sell a new product from a new company without a single success story. The biggest challenge is to last long enough to ramp sales so that they support your overhead. The most important thing is to get positive cash flow ASAP so you can survive for that period. Here are some thoughts, in no particular order, that might help:
Survival is all about cash flow. You can have the best product in the world that every person China needs, but if you spend more than you make, you will die before you succeed. If you cannot find a way to make your cash inflow larger than your outflow, you won't make it. Whether from sales or investment or loans, you have to bring the cash in. Of the three, sales is the best way to get it so work very, very hard to bring in cash that way and only look to investment or loans as an absolute last resort.
Hope that helped a little. If nothing else did, you should at least get some help from the book I mentioned. It is a must read.
You definitely need some early adopters. Until you have several customers using your product, it will be tough to grow your pipeline.
Now, regarding the price & sales cycle:
Price: I'd stay away from touching the price. If you price your product too low, you'll send out a perception that your product is not that valuable. Also, low prices will hinder your ability to grow the company, and you'll have less R&D dollars to put into improving the product, and you'll be overcome by competition and out of business too quickly.
One thing you can consider is to create a segmentation that allows you enter new accounts with a "low fee" and then scale inside the account. The pricing threshold should be a value that does not require your buyer to go into the long and bureaucratic purchasing cycle (if the customer can buy the product using his credit card, then he doesn't need to ask "permission" to anyone)
Shortening the sales cycle If your product falls in the "complex sales" category, then it will be very difficult to shorten the cycle.
My experience tells me that, instead of trying to shorten the sales cycle, you should invest in making evaluation as easy as possible.
If you can, make your product available online for people to try and experience. Give them all the information and resources they'll need to evaluate the product.
What this means is you're putting all the pre-sales effort on the customer side and when they're ready to buy they'll tell you.
This is a switch from the traditional outbound marketing & sales (where you chase prospects, call then, send emails, go on sales callas to do demos...), to inbound marketing (where you get prospects to find you, evaluate the product, and then buy it - all in a self service mode).
The result is that, although the sales cycle is not reduced, you'll have a better stream of prospects - this makes your sales cycle look (virtually) smaller.
Hope this helps
Is such early stage you need to get Early Adapters to buy your product. This solves the problem of providing references.
Going cheaper than the competition is not always the best way to differentiate your product. Companies will doubt its quality.
Shortening your sale cycle depends on the product. In enterprise sales, this is common because the price tag is higher.
Can you sell the same product as a limited edition to smaller companies? That will bring the quick sales you need.