Enterprise organisations can be quite complex to navigate due to employee size, systems, and processes that are implemented for greater organisation effectiveness. Some of the benefits of enterprise clients are that they churn less, drive bigger average deal sizes and tend to offer higher net retention rates over its lifespan.
There are some potential downsides if not managed properly as some can be quite expensive to onboard and maintain due to onerous requirements from vendors. If you are thinking of going up market, I’ve highlighted a few areas below to consider. This list isn’t exhaustive, but the primary thing to remember is that enterprise sales is a team sport and will require all parts of the organisation to align to win in this space.
Many large organisations require a certain level of product maturity from vendors they work with. Apart from the continuity i.e. financial position of the vendor, there are other key considerations worth noting. This list is not exhaustive but I’ve listed a few below:
Define or redefine product messaging - although your product may be solving similar problems at large and smaller organisations, the messaging and position to large organisations requires tweaking. As you go upmarket, there tends to be more people in the decision making process, selecting a product is more streamlined through an official process and business i.e. return on investment (ROI) becomes increasingly important to identify and articulate.
Define or redefine Ideal Customer Profile (ICP) - before going upmarket, defining where you will be able to maximise your investment and gain real traction by understanding who’s your ideal customer is paramount. This should be by industry/sub industry, department, job role, persona, geography etc. This will be very closely linked to your product messaging. The more relevant the messaging to the right persona, the greater the impact.
Define key account targets and organisation mapping - there are typically two approaches when going upmarket, going wide or going narrow and deep. If you have a clearly defined ICP, the recommendation is to go narrow, build momentum and then scale. As your product is looking to deliver ROI for your clients, you need to be conscious of ROI for your GTM approach. Taking a targeted approach allows you to manage your cost of sale more efficiently and better learn and understand what works and what needs iterating.
Sales Execution - there’s a lot to cover in sales execution, however for this edition I’ll touch on two aspects that forms part of a bigger story. As vendors go up market there’s increased complexity and multiple stakeholders that need to be involved in product selection and purchase. That means longer deal cycles and multiple layers of pain and interest to navigate. Navigating this complexity is what’s referred to as multi-threading. It is engaging with multiple stakeholders in a company to influence their decision to select your product, potentially over a competitor. This is also important with sustaining and growing adoption, long term partnership and subsequent growth. The other point worth noting is MEDDPICC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Paperwork Process, Identify Pain, Champion and Competition). There are different variations to this model, and some may use different meanings for the letters such as channel/partners etc. This frameworks helps to align the selling process with the customer’s buying process and problem they are trying solve, tying to business objectives. It also helps improve forecast accuracy which, which larger deal sizes, increases forecast risks.
Partnership & Integration - ‘If you want to go fast go alone, if you want to go far go together” African Proverb. We have seen from the past that companies that try to operate monopolies or work in siloes tend to fail eventually. In building a sustainable enterprise (upmarket) business, leveraging a wider network of business (partners) has many benefits. To name a few:
Bottom line is, "The whole is greater than the sum of its parts" - Aristotle
Multi-products - this is an interval vs external viewpoint of the organisation going upmarket. Multiproducts mitigates revenue risks and provides more opportunities for growth and scale. It’s also greater validation for employees who will join, instilling confidence and a sense of security that they’re not just joining a one hit wonder.
Multi Year deals & Payment Terms
Positioning the company and teams to be able to secure and sign multiyear deals also offers greater long term financial security. Most larger organisations buy technology solutions on 3 - 5 year contracts and would expect that they will have the option to do so. Multiyear deals provide the opportunity to build strategic relationships with these organisations. One benefit that’s not talked about much is, when for any reasons things may not work well during the onboarding/implementation phase, a multiyear deal gives the opportunity to recover and rebuild confidence.
When it comes to payment terms, be prepared to be flexible as many larger organisations have set policies that require longer payment terms, some up to 90 days. Many also use procurement solutions like Coupa or Ariba and require direct interaction with these platforms.
AE compensation plans - How you incentivise your salesforce will be a key element of the quality you attract and an important piece of how they will stay motivated. I’ll touch on hiring abit later. Depending on the industry you operate in there are different models and benchmarks for rewarding enterprise sales reps. This is typically an OTE of anywhere between 10 - 20% of the quota they carry. Some industries may be slightly lower and some may be slightly higher. The fundamental direction is to reward your top people well.
There are varying schools of thought and marketing disciplines today. The marketing efforts you deploy should be relevant to the industry you operate in and being where your customers are. I’ve covered 2 below briefly that I believe would be relevant to most industries.
Account-Based Marketing - this marketing approach can be quite expensive based on how you deploy it. It leans heavily on personalisation to the company and personas within the company. If you plan to use this method, I recommend working with a marketing professional who has experience in this space.
Sponsored events & networking - getting brand awareness and attracting the right clientele can sometimes be a challenge, especially if you are just going upmarket. Being at the right events and connecting with the right audience can open up new doors and accelerate your shift in this space. Sponsored events with networking opportunities (virtual or physical) is a great way to break through these barries. Depending on your ICP, there are events that cater to both executives and practitioners. Do your homework before investing resources though as these can also be a waste of time and resources.
There are different schools of thought when it comes to hiring reps to go upmarket - senior experienced AEs with more than 10 years of enterprise selling experience or a rep that has some experience but is younger in their career and may be more eager and willing to do hard job of hunting. There’s no right or wrong approach, it depends on where you are in your stage of going upmarket and which hiring profile will suit your needs best. Ideally as time goes on you’ll have a mix of both. What I think should be common in every case is hiring:
Bottom line
It takes a village to win in the enterprise space. Going upmarket can be rewarding but may not be for every business. Do your research, ensure your product is enterprise ready and you have a team around you with the relevant experience and grit to make it happen. If you need help to walk this path, reach out to us at Lead Not Lag.