Startup Sales Strategy
Table of Contents
Where to start: Startup Sales Strategy 101
During challenging economic times, there can be real opportunities for startups, but they need the right strategy. For many of our customers and partners, growing their startups to their full potential requires them to move up-market. They need a startup sales strategy that targets big companies, so the startups land bigger deal sizes and become market leaders. But what are the first steps as you build this enterprise-focused startup sales strategy?
- Become the “Top of Mind”
To do this you need to know your market. Who are you selling to? What is their profile? What problem do they have? Then you need to become a thought leader not in your tech, but about the problems your target buyers have!
- Create a Moat
What are the barriers to entry for others to come into your space and beat you? Does this change depending on what market you are in? Can you change your business model to create a “moat” so that it becomes harder for others to compete with you?
- Onboard Major Companies to Boost your Flywheel Effect
The healthiest business models are the ones that build on success. For example, an AI company that uses customer data to make recommendations makes better recommendations with more data. By signing enterprise accounts, your startup can benefit from their scale and give your flywheel the kick it needs to become unstoppable. Put simply, your startup sales strategy should be to target enterprise accounts with recurring monthly revenue.
- Build a Partner Ecosystem
- Become the “Top of Mind”
Partners are a great way to open new markets and for small companies to ‘punch above their weight’ in terms of sales. But building these partner programmes can be time consuming and complex. At Nituno, we have a team that can help you here.
Download the Guide: How to Sell and Market B2B SaaS Startups
What is an Enterprise Account?
- Large: They have tens of thousands of employees, +$1Billion turnover.
- Complex: They usually have a global presence, multiple products sold to different segments. You can expect to have to work with a Matrix organisation, where each business unit has a set of specialities, priorities and constraints, managing a single problem.
- Cash Rich but Risk Averse: These companies rarely have issues raising capital when they need to invest, but governance implemented to protect investors forbids any single executive from making any big decision alone.
- Market Leaders: They’re global market leaders, meaning that while they say they always need to innovate, the status quo is often a very good situation for them.
Why are Enterprise Sales Important for Startup Sales Strategy?
It is easy to take a sales team that sells five $30k contracts per month to ten $30k contracts per month. SaaS Enterprise Sales means selling one $300k SaaS Enterprise contract. This change of value means playing in a different league, if not an entirely different sport. What does a startup need to do to close enterprise deals?
Can you Prove your SaaS is Scalable?
Enterprise customers are looking for impactful solutions when deployed at (massive) scale. SaaS Enterprise Sales require you to prove that your software will handle the scale. If you don’t have enough traction with mid-sized companies to demonstrate maturity, maybe Enterprise is too early for you.
IT Security is also a growing issue. Be ready to sign 8 page IT Security forms that will be time-consuming. The best way to come prepared is to get IT Security certifications ahead of time to facilitate the process.
Startup Sales Strategy Requires the Investment of Time
Harvard Business Review states 6.8 months are required on average to close an enterprise deal. This doesn’t mean you won’t start seeing revenue quicker for pilots but you need to invest some time. The reason is the number of people involved in the decision. We have seen deals with over a dozen decision-makers. When you build a startup sales strategy, remember that it will be extremely profitable in the mid-term. However, the long enterprise sales cycles mean that you need to take time to Test & Learn.
Best of Bread Sells Better than Cheap
Enterprises and major corporations are willing to pay to scale and to find the best fitting solution. At scale, the cost of error is huge. As a consequence, cheapness is seen negatively. Your startup will be identified as not serious enough for Enterprise attention if being cheap is your unique selling point.
This is particularly true when Enterprises ask for a free Proof of Concept. If an Enterprise Account asks for a free POC, our experience shows they will never become customers. We’ve learned this the hard way. If a company wants a free POC they don’t see the value in your tool or know what problem it solves. This could mean you have a positioning or marketing problem and that you need to tweak your SaaS sales strategy.
Create a Sense of Urgency or Sales Will Languish
For many profitable Enterprises, the status quo is comfortable, urgency is low, and change is a pain. On a micro level, office politics means that fitting in the mold gets the promotions. This explains why many Enterprises play the clock before purchasing SaaS, notably by asking software companies to add custom features before a purchase that never arrives.
This means that the first priority of any enterprise sales initiative is creating momentum in the sales cycle and reducing the perception of risk.
Startup Sales Strategy in 5 Simple Steps
Deploy the steps in this order to build your sales strategy and sign your first enterprise deals. SaaS Enterprise Sales is like a hike up a mountain, take it one step at a time.
1. Become a Thought Leader to Build your Pipe
Before the suits, the pitch meetings and adrenaline-charged negotiations, your SaaS Enterprise Sales teams need leads. Focus on lead generation, A/B your marketing before hiring a single expensive sales executive.
Why is SaaS Enterprise sales lead generation hard? Decision-makers are crazy busy, making it hard to get their attention. They need more than just a nice slogan on a billboard to push your solution.
To deliver leads, invest in Thought Leadership. Drafting exceptional content is time-consuming and expensive, but it can make or break an enterprise sales initiative. The biggest issue SaaS Enterprise Sales teams face is risk averseness. Any perceived risk by any decision-maker can be a deal-breaker.
By publishing HBR style thought leadership content, your company will be perceived as a member of the elite. Readers both inside your targets and outside analysts will be ready to become champions for you. Having great content published builds confidence before walking into your first big meeting.
C-Suites are Thirsty for Insight
As an example, a former company we worked with published an amazing White Paper on the future of their target industry. One of the ten biggest banks contacted them for a “vendor briefing” and to the startup’s surprise, the Chief Technology Officer was present. He had read our whitepaper and thought it was brilliant enough to ask his Chief of Staff to make room on his calendar for the first in-person demo.
2. Draft Your Dream List
As you begin deploying a content strategy, think hard about who you are writing this content for and how they will find it.
We recommend that you draw up a list of the first twenty accounts you dream of working with. Once the list of twenty accounts is drawn up, investigate their websites and LinkedIn to figure out who you need to convince at these companies to succeed. Remember, people buy software, not companies.
While your content may bring you other opportunities, focus marketing and outbound sales initiatives to these twenty accounts. This means that from now on, any time a White Paper is drafted, a blog post published or you are giving a speech that will become a YouTube video, ask yourself one question: What do my list of targets need to hear to want to learn more? They are the only audience that matters.
3. Hire SDRs before Closers
The first members of your SaaS Enterprise Sales teams should be two Sales Development Representatives. SDRs are responsible for booking initial meetings with any qualified executive within the list of targets you drew up. Also, they will call any enterprise inbound lead which downloads your content. By focusing on generating leads and transforming them into meetings, you can A/B test the most difficult part of the sales process. Testing and Learning before hiring expensive and experienced closers is critical to success.
SDRs should prospect by leveraging email sequences, cold calling and by sending the published content. It’s easier to ask “would you like to receive our new Whitepaper on the future of your industry” than “would you like a demo of our product”. Leverage your content!
At first, they will send all of the qualified prospects they raise to you or a member of the founding team before handing off to sales executives. This will allow you to close a few deals but, just as important, identify if the leads are qualified enough to help your SaaS Enterprise Sales team deliver quota and more.
Two tips for Successful Sales
- Always hire in two’s
If sales results are not conclusive, you will easily know if performance issues are due to messaging and process or rather from an individual employee.
- Multiple touchpoints
If your marketing content is great, push it to the target executives through LinkedIn, Facebook and Google Ads while your SDRs are physically reaching out. Combine as many touchpoints as possible on one same person for the best ROI.
4. Location, Location, Location:
A sales executive should be located next to the target customers to “camp” at the customer offices. Each account executive should focus on three to five target accounts if contracts can reach $1M per year over three to five years. This focus will allow them to be so present with the customer to be considered a colleague. Ideally, the accounts that the sales executive manages should be in the same industry, as it allows to quickly learn and grow with each meeting.
While this geographical proximity may not seem important in the time of COVID, we believe quite the opposite. We will make it out of this pandemic, a vaccine is coming. When it does, executives will want nothing more than to see fresh faces and meet over coffee and lunch once more.
5. Building a SaaS Enterprise Sales Team is about Timing:
Keep in mind to always build your SaaS Enterprise Sales team from the top of the funnel to the bottom of the funnel. Begin testing marketing, SDRs and cold calling. Once that is confirmed, grow your team with closers and pre-sales to help with the IT Security forms and RFP. As you build this sales organization, a member of your startup founding team should plug in the holes. You will never be an expert in every field, but by experiencing every step of the sales funnel yourself, you will quickly understand what profiles you need to succeed based on your target profiles.
Finally, a dedicated VP Sales Enterprise should only be named when the company has twenty customers. At this point, dozens of sales executives are growing accounts, opening new ones and following this specific segment becomes a full-time job.
Follow the Process to skip obvious mistakes
Building a SaaS Enterprise Sales team is tough. Given that enterprise sales cycles are so long, you could easily waste a year with the wrong strategy before you even realise your mistake.
We hope that these simple steps will help you ask the right questions. By deploying a SaaS Enterprise Sales strategy methodologically, you will create milestones to clearly see how your company is performing.
Don’t hesitate to ask for outside help. We’ve built SaaS Enterprise Sales teams before. We would love to discuss your objectives and pains as you march upmarket with your startup.
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