Sales is either SMB or enterprise - there is no midmarket
- SMB and enterprise selling are radically different. SMB is typically powered by marketing, whereas enterprise is typically sales led
- Mid-market is either low end enterprise or high end SMB
Counterintuitively, it makes more sense to start selling to Tier 1 logos, rather than build up to it
- Enterprises can be early adopters because they have to stay at the number one spot
- So if you can get them even a slight bit of alpha, they will be more likely to adopt your tool
- Even more important in the age of AI
How do you sell to an enterprise Tier 1 logo?
- Founder led sales is critical — because they more naturally go to vision selling
- Sell to a gap (i.e. vision), don’t sell to a problem (i.e. highly specific, technical)
- When you sell to a leader, you need to be vision casting and selling the opportunity — this is what gets Tier 1 logos excited
- Unlock a new way of thinking, unlock alpha, unlock something unique for the customer — this is how you come up a vision to sell
- E.g. high frequency trading gives you 1 second of alpha before everyone else
- In the age of AI, selling the alpha is even more important
Aim for big ACVs when selling to the enterprise. Don’t discount!
- Aim for big ACVs, don’t discount. If a client is nickle and diming you, they aren’t fully bought in
- Enterprises aren’t going to do the hard work of bringing you in as a vendor if what you are offering isn’t critical. This is why selling to enterprise early can actually be a powerful litmus test to know you are building something valuable
- ENterprises are structured in a way that makes it hard to buy, because they want to make sure that whatever is being sponsored as a new tool, the sponsor has a lot of conviction in. This gets rid of the “good not great” propositions
- It’s much harder to get a $100K deal done than a $10K deal done. But to get a $100K deal done requires an executive to be bought in — which is a powerful place to be in
- Don’t try and ramp u a deal from $10K with a view to getting it to $100K - it’s just not feasible. You should be building the product that you can sell for $100K
- If you are a PLG company and you are selling to an enterprise, be careful in selling the SMB pricing to the big company (e.g. 3 users from Walmart sign up and are paying the usual 3 user seat price. Now if they want to expand to 100, they will anchor on the price per seat they were paying. You aren’t getting senior executive buy-in if you try and bleed these two approaches).
- Enterprise companies are very used to a land ACV of $75 - 150K. Don’t try and land at too small of an ACV (it’s hard to defend a 10x jump in price, because it’s hard to show you are suddenly delivering 10x the value)
When does it make sense to sell smaller ACVs?
- When you have a super high win rate and a massive market
Design partners
- [LISTEN TO THIS SECTION AGAIN. CONTINUE FROM 31 MINS IN]
- Sell the vision
- SMB sales
- Getting through procurement
- What to look for when hiring sales reps