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  • Operator Sessions
  • 09 July 2024
  • 5 min read
  • Words: Northzone

Operator Session: Building an Enterprise Sales Motion

In the current environment, developing a robust enterprise sales strategy has become increasingly appealing. While adopting an enterprise sales motion is not appropriate for everyone, and we don’t think of this advice as a playbook, the advice is aimed at companies that are currently selling to non-enterprise customers and are considering expanding into the enterprise segment, although much of it will be useful to startups who want their first ever customers to be enterprise customers.

This Operator Session explores the intricacies of building an effective enterprise sales motion, led by James Allgrove, former Head of Growth and Revenue at Stripe and current GTM advisor for startups. Drawing from his extensive B2B experience, Allgrove offers insights for companies looking to expand into the enterprise segment or startups aiming to secure enterprise customers from the outset.

How to know you’re ready

Many startups experience false starts venturing into enterprise sales. This can be triggered by an unexpected approach from an enterprise customer, an invitation to participate in an RFP, or a considerable growth of an existing customer. It’s crucial to recognise that enterprise sales are significantly different from other sales motions and require a lot of time, patience, hard work and market momentum to be able to execute successfully.

When you’re ready to start selling to enterprise customers, you should approach it as if you’re establishing an entirely new business. Whilst you’ll have garnered learnings and developed products from an SMB or mid-market customer-focused motion, the methods for identifying, targeting, and prioritising enterprise customers will evolve. You most likely want to carve out resources for enterprise sales to prevent your existing team from being distracted from your core customers. Initially, the founders will develop the enterprise segment, only staffing it up once readiness is proven and the first few customers are secured.

Selecting Your Target Enterprises 

In enterprise sales, there’s often a “cold start” challenge: no enterprise wants to be the first. Therefore, your first enterprise customer is important, as reference customers are particularly key in the enterprise segment. Make a short list of 10-15 companies that are well-known and could serve as valuable references. These should be organisations with a strong need for your product, based on your current customer base.

Enterprise sales require speaking to many and different stakeholders within a given company. While you may be used to speaking to a single decision maker, enterprise sales require speaking to and addressing the (often different!) needs of 10 or more stakeholders. Research your target customers thoroughly and identify all potentially relevant individuals for your product, spanning a range of seniority levels. Be strategic in your approach to reaching enough decision-makers and iterating consistently to establish a patterned approach that proves effective and repeatable. Accordingly, try to limit the number of concurrent conversations you’re managing to avoid struggling to maintain momentum across all of them.

Photo: James Allgrove, GTM advisor

Strategies for Targeting Enterprise Customers 

Once you have your list of target customers, adopt an account-based approach, thinking through whom to engage at each company and how best to reach them. It’s important to be considerate in your outreach, avoiding the temptation to hit too many prospects simultaneously before refining your pitching and knowing the specific pain points you’re addressing for each customer. 

Your first enterprise customer is critical, and will likely come from warm introductions, whether through your investors, current customers or network referrals. Think through how you can reach the relevant people via your existing contacts first. This isn’t a situation where you can use a large, automated outbound campaign to reach them. Depending on your buyer, targeted ads on platforms such as Linkedin could be relevant but don’t expect this to be a magic bullet.

Organising small, curated events can also be powerful. Bringing together thought leaders and decision-makers to discuss challenges, with your brand facilitating these discussions, can create a cognitive association between your product and the solutions to these challenges without a heavy sales pitch. Building a community around the problem your company is solving works especially well for underserved communities. CTOs and salespeople tend to be well-served, but office managers, bookkeepers and finance leaders are often not. Therefore, if you’re selling to an underserved persona, consider what sort of community you could cultivate, and whether this community exists already.

The Role of Partnerships

Partnerships can also be effective in enterprise sales, even without formal arrangements. Working with companies targeting similar customers but offering different products can be a powerful collaboration tool. This could involve joint events, network introductions, or building a referral program to broaden your reach. 

Selecting the right partners is important. Be mindful of size disparities; partnering with significantly larger companies may yield little benefit as you’ll be far down on their list and unlikely to get much out of it, whilst collaborating with much smaller ones can lead to imbalanced relationships. When relative returns on each side are uneven it can lead to uncomfortable dynamics. Better to start with partners of the same size, developing close relationships with a small number to build a real relationship. An exception here could be finding the right team internally in a large partner who are dealing with exactly the same customer. Being looped in when a customer’s pain point matches what you are solving can solve a problem for them too as a smaller subsection of a much larger company. 

Partnerships, like any relationship, require dedication to maintain. Whilst in some cases all that is needed is the logo, long-term success is often determined by the strength of your relationships. By showing effort and faith in the relationship upfront, and acting first on the partnership, you can initiate the joint discovery process of working together. From here, teaming up in sales conversations, providing opportunities to pitch each other, and showing value in combining your products can be effective and provide value to both sides.

Driving Revenue from Enterprise Customers

Developing an evolving sales motion as you increase your customer base is crucial.  You’ll gain valuable market insights from each deal regardless of the sales outcome. Early on, you’ll face the decision of whether to optimise for logos or revenue. Generally from the outset, you should optimise for logos. Once you’ve secured 1-2 enterprise logos, attracting the next 5 becomes easier, after which you can shift focus to revenue generation. 

When negotiating with your first enterprise customer, don’t worry too much about the revenue, as this deal will unlock opportunities down the line. That said, you shouldn’t give the product away for free. Enterprise customers are hard work, so you do want to be paid, but be flexible to land this first logo and be willing to negotiate a heavy discount. 

For this first deal, determine what is a fair price and use it to test what the market will pay. Start at what you deem to be the market price for enterprise customers in general, thus giving yourself leverage. Then think about what the minimum amount you would be happy to do this deal at – considering the logo but also remembering that they will be demanding. Start negotiations at the top of your range, then offer discounts in exchange for key brand benefits like being able to use their logo, writing a case study or reference calls with pipeline customers (or ideally all 3!). From there, write the discount into the contract, e.g. 50% off for two years, alongside your secured benefits. This will set expectations for the renewal price and ensure that you realise the additional advantages of the partnership.

Building a successful enterprise segment can be transformative for many companies, bringing in significant revenue from long-term, well-known, and loyal customers. There are many benefits, but before embarking on this journey you should make sure you are ready for the challenge. 

Given the amount of work it takes to pull off a successful enterprise expansion, you need to ensure you are focused and thoughtful, maintain flexibility by constantly testing and iterating on your process, and dedicate sufficient resources to the endeavour.