When most companies first start out, it’s common for them to sell to small-medium businesses (SMBs) and startups — it’s much easier to reach those types of businesses, they’re more likely to take a chance on a new product, and they’re small enough to build close relationships with to drive ongoing customer advocacy. However, as the company and product mature over time, leadership usually starts expressing their desire to move upmarket, sell to larger businesses, and ultimately close bigger contracts and drive more revenue. The reality is making that move isn’t straightforward or easy.
Momentum’s Head of Marketing, Clayton Pritchard, recently sat down with Coby Berman, current Co-founder and COO of Radar and former Director of Sales at mParticle, to discuss how to set sales teams up for success as the company makes the strategic decision to move from SMB to Enterprise sales.
The fundamental differences between selling to SMBs vs. Enterprises
The decision-making process in enterprise organizations is complex. When selling to an SMB, you’re likely selling directly to the decision maker who’s also playing the role of the customer champion. If your value proposition is strong and your customer likes the product, you'll have a closed-won deal after a few calls and demos. Unfortunately, this isn’t the case with large businesses.
Selling to an Enterprise means you’re selling to an average of 20-25 people who must come together and see value in your solution, agree on outcomes, and align on a decision. The role your sales team plays in this process is different. You’ll need to align your internal sales strategy to match the size of the customer, often bringing in more people or teams into the process.
Another core difference is the mindsets of SMBs and Enterprises. SMBs are in investment mode, trying to grow as fast as possible by implementing the right tools and software to help achieve their revenue goals. Enterprises, on the other hand, are thinking more about risk mitigation. They’re attempting to ensure no reputational or operational risk will come with implementing a new tool in their tech stack. As you start selling to enterprise businesses, you’ll notice that your revenue team will hear objections from procurement and compliance teams and will need to be equipped and trained to fight for those contracts.
And, of course, an important difference is budgeting. While budgeting looks different in every organization, the way larger companies approach budgeting is vastly different than SMBs. When you’re at a smaller company and looking to secure budget for a new purchase, it’s much easier to go directly to your CFO with the proposal and get their sign-off. With Enterprises, customer champions don’t always have that flexibility. They’ll need to be more thoughtful about securing that funding, where it can come from, how to carve out a budget if there’s none, and who the right person is to sign off on it. For sales teams, this means patiently navigate this process and working with your customer to facilitate these conversations, ensuring the right people are brought in at the right time.
How to move upmarket successfully (and some rookie mistakes to avoid)
Now that you know the difference, let’s talk about how you can start the move up.
Coby emphasizes that before you decide to make the move, it’s important to take the time to understand who your customers are. Do these larger organizations have the same pain point in the same way SMBs do? Is the solution you’re offering going to solve that same problem? Invest time in understanding the personas and archetypes of these customers, the value propositions that resonate with them, and how they view risk and the challenges that matter to them. All this upfront work will help your teams create a more tailored pitch.
Another piece of advice Coby offers is to match the experience of sellers to the sales motion. We’ve already established Enterprise sales is vastly different from SMB. By hiring reps who have experience selling a higher price point to a team of decision-makers (and maybe even in your specific industry), you will protect yourself from losing deals simply because of the lack of sales experience. And if you’re not able to hire new reps, it might be worth working with your sales enablement or product marketing teams to implement a training or onboarding program to slowly grow your SMB reps into successful Enterprise reps.
Some common mistakes Coby also mentioned are:
- Not tracking progress effectively. Enterprise deals, on average, can take up to 6 months (and often even more), so it’s crucial to break up your sales cycle in a way that makes sense. This can mean making changes to the qualification process or creating more milestones along the way, so you’re able to track progress over time.
- Not setting the right rep expectations. Your SMB reps might be accustomed to closing one deal a week or maybe a few deals a month. When they pivot into Enterprise sales, success might look like one closed deal after six months! They may easily feel discouraged with how slow things go, so make sure you set expectations early that it is typical.
- Not being consistent and always giving your teams “more time.” Since Enterprise deals take so long to close, it becomes easy to keep adding months and months to the cycle. Resist the urge to give yourself more time. Even for large deals, set up quotas — whether it be on a monthly or quarterly basis. Find what works best for your organization and keeps you accountable and consistent — otherwise, what could’ve been six months might turn into twelve.
Tools that may help make things easier
Moving upmarket isn’t easy and takes a lot of work. Luckily, Coby also shared a few tools that can help make the process a little bit better.
Gong: You might already be using Gong for your SMB sales motion, but it becomes even more useful in Enterprise sales. Rewatch past footage and look out for any mentions of competitors, physical body language during pitches, and questions being asked. All of this helps give you a better idea of how your pitch is landing in the minds and hearts of potential customers.
RevOps.io: RevOps.io is a CPQ solution that speeds up internal sales processes. Deal desk and sales teams can use the product to price deals based on usage and immediately get quotes, terms, and discounts approved.
Momentum: Momentum is a RevOps automation platform that increases GTM team efficiency by connecting all of your sales tools together with automation and enabling your team to manage their work from Slack.
As you consider moving upmarket to tackle Enterprise deals, the most important thing for you will be to understand who your new customers are and if your sales reps understand them. From there, figure out which changes you need to make to the structure of your sales team and how your sales processes to support this complex sales motion.
Enjoyed this blog post? If so, watch the full fireside chat with Coby below.