September 27, 2022
Author: Pete Prowitt
After working in B2B SaaS over the past decade-plus one of my favorite questions is, “Should we expand into enterprise sales?”
I love this question because it tests the scale of a company’s ambition, the clarity of their vision and the viability of their product. Those who can successfully bridge the gap from SMB to enterprise dominance are rewarded when raising capital, getting acquired, or by the public markets (examples here, here, and here).
But making the transition to enterprise has significant challenges, like longer deal cycles, greater acquisition costs, and less revenue predictability. The companies that make this transition successfully are the ones that lay the groundwork early on for the shift to enterprise.
In this article, I’ll cover the five key actions companies can take today to make sure if and when the time comes to shift to enterprise, they’re ready.
Because “enterprise” can be used to refer to any number of companies, for the purposes of this article we’ll define “shift to enterprise” more broadly as the shift to larger customers with more complex needs and greater revenue potential. Whether for your company that means 500+ or 500,000+, the takeaways below still hold.
This sounds like a no-brainer, but you won’t get far with your sales efforts if there are major gaps between enterprise expectations and what your product can deliver.
To close those gaps, you need to continually:
As an example, early on at Stytch we were laser-focused on passwordless solutions. Over time though, we discovered a critical mass of customers weren’t ready to go fully passwordless, and instead wanted to support it for only subsets of their users. This was especially true of more upmarket prospects.
To make ourselves more enterprise-friendly, we shifted our priorities and built our own passwords solution to offer alongside our suite of passwordless products. We’ve since made investments in products like differentiated CAPTCHA and Single Sign-On solutions with a similar aim to close any gaps between our products and our prospective customer requirements.
As a result of these roadmap changes, we’ve broadened our total addressable market and created a compelling offering that has strengthened our enterprise position. If we hadn’t listened to our enterprise customers or been agile enough to shift our product roadmap, we’d have missed out on this upmarket TAM.
The process of selling to the enterprise is completely different from selling to SMBs: each requires tailored sales motions.
With smaller companies, the person you are selling to likely is both the end-user of your product and the economic buyer. You often have less than three people involved in an evaluation and can make a buying decision in less than 14 days. For these customers, you want your sales motion to optimize for speed, ease of evaluation, efficiency, and volume. Think freemium or “product-led” growth strategies where sales reps are managing a high volume of deals.
In stark contrast, enterprise sales processes involve more stakeholders, more time, and more organizational hurdles. Companies of 100+ employees will involve on average 7 people when deciding to buy software, and often take months to close a deal. This requires a more hands-on approach: sales teams need a detailed understanding of your customers’ strategic priorities and KPIs. They should also consider leveraging partnership-selling between Account Executives and Solution Engineers to offer more tailored advice.
With all the different stakeholders and stages involved, enterprise deals can get complicated quickly. Consider visually mapping out the path to close to help navigate these lengthy, complex buyer journeys.
To effectively capture upmarket opportunities, it’s critical to understand where to leverage people and where to streamline with automation. This requires answering the following questions:
These questions will reveal the mission-critical junctures where you need people to sell your product, and the easier hurdles that you can leave to automation. In short: reserve your talented, creative, and expensive salespeople for the customers and moments where they have the greatest incremental impact, both on your customers and your business.
In the early days of growth, your company will likely employ founder-led sales to win your first set of customers. Companies at this stage often critically mistake founder-led customers as indicative of their product-market fit at scale. Your early customers will likely be early adopters willing to take a risk on a fledgling startup, and these sales likely won’t be reproducible at scale. As such, your true ideal customer profiles or sales playbook won’t reveal themselves until you’ve learned how to sell to strangers.
This is where outbound comes in.
In learning to sell to strangers, early outbound sales will give you the opportunity to:
All of this helps you refine your sales toolkit in the ways you’ll need for the longer, multi-stakeholder processes that enterprise sales require.
Your sales team should be a conduit for customer feedback early on (something I’ve written about in the past). Because enterprise has more stakeholders with unique requirements than SMBs, it’s also important to invest in frameworks and rituals to organize that feedback in a way that’s easy to draw from later on. If you cannot adequately categorize and prioritize the needs of enterprise customers, you run the risk of missing critical components or prioritizing your efforts against the wrong needs.
To encourage early adoption and collaboration between your GTM and EPD teams, they should work together to:
Whether your teams are meeting once a month or once a quarter, the key is to establish this flywheel early on so your product can evolve with you as you scale. Here’s an example framework I use with my team that can get you started.
So, should you move your sales team upmarket? For most companies the answer is eventually “yes,” but make sure you’re prepared for the road ahead. If enterprise sales will be important to your business, make sure to:
While this isn’t a comprehensive guide on building enterprise sales teams, these principles have served me well at past companies and guide our thinking as we expand into enterprise sales at Stytch. I hope that they are helpful to you, and would love your thoughts or feedback at email@example.com. In the meantime, good luck on your enterprise journey.