How to go upmarket in B2B SaaS

SaaS · Luigi Mallardo · June 2, 2020
b2b-saas

In B2B SaaS going upmarket is often the only way to keep on growing at a decent rate over time. Unfortunately, many founders and startup operators still don’t get it or miss the game plan.

Startup “Kid Mentality” and “Facebook syndrome”

I’ve seen many B2B CEOs, Founders and startup operators having a kid mentality, a kind of “Facebook syndrome”.

Not everyone.

They want the product to be cheap, sellable horizontally and efficiently with as little sales support as possible. The product needs to sell and serve by itself.

Some of them try to change “religion” moving to sales and customer success led models but there is still a long way to go.

This type of Kid Mentality is dangerous. It can kill the growth opportunities. It has killed many already.

Adult Mentality

Get focused.

Going upmarket must be like following the North Star.

Deciding to go upmarket doesn’t mean necessarily a switch of focus or drastic changes. There is no one-size-fits-all recipe to execute an upmarket strategy, although a few Principles stand out from the long list of factors that can influence.

#1 Focus, Segmentation and Account Based Model

If you want to go upmarket you need an accurate segmentation and a profound strategic work of focus and execution of the go-to-market strategy.

On an operational level you need to implement Account Based Models with SDRs, Account Executives and Customer Success engines that can get really human intensive.

You need the right tech stack too. The industry has evolved exponentially in the last 3-5 years. Don’t go cheap on that!

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“Deciding what not to do is as important as deciding what to do.” Steve Jobs

#2 Hire people with experience. Don’t stretch too much.

When the game gets serious you need people with the experience of having lived those moments.

If you give too much responsibility to young talent because it’s cheaper and things get difficult and under pressure (which happens all the time in high growth scaleups), it’s not going to work.

You are not going to succeed with average players (that’s 100% sure) but even when you get the good and expensive ones, you never know if it’s going to work until you see them playing. For bigger deals this can mean to wait 3-6 months before realizing if it can work or not.

Don’t stretch too much. Not only hiring juniors and asking them to deliver like seniors. Also don’t expect that a sales person who is good at selling 15K deals is also good at selling deals of 50K or 100K+ in ACV.

#3. Modern Leadership with experience and the right engine

At the right time you need a Revenue Leader who knows how to develop a team, the right engine and game plans to move upmarket. You need a coach. No shortcuts.

“The required profile of the sales LEADER has really changed to become more of a leadership profile. World-class managers today are defined not just by their ability to coach to the known, but by their ability to innovate around the unknown”. The Challenger Sale.

#4. Review your Funnel and Playbook

Your funnel and sales playbook need to evolve if you want to go upmarket.

For selling small and transactional deals the most used funnels in the tech industry are quite dense at the top, like the image below.

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The funnel for going upmarket and getting bigger deals and ARPA must be dense in the middle and at the bottom. This is where most of the opportunities get stuck if you do not have the right focus and experience. An example of a proven funnel for deals above 50K in ACV is below.

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#5 Review your pitch approach

Going upmarket typically comes with an evolution of the way you communicate and what you communicate.

Sales cycles get longer, the number of stakeholders within the same Account increases and you need to build a different narrative around a sequence of touch points.

Talking about generic benefits and doing cold product demos it doesn’t work.

Obviously you need to talk about your product BUT to be effective you must show the product in the context of use cases that are relevant to your buyer personas. Not just the product in itself.

Prospects want to be showed the products through real stories where they can see themselves reflected.

You should build teaching pitch choreographies to talk to your prospects about Type B Benefits, as very well conceptualized by SPIN selling methodology more than 30 years ago.

So how do you get your entire sales force to tailor their approach to each individual stakeholder’s most pressing needs?

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#6 Review the Customer Success formula

When you go upmarket your Customer Success approach may need to change. When you sell transactional deals or even deals up to 20-30K in ARR it may make sense to have two separate organizations: Sales handing over a new Client 100% to Customer Success.

Depending on how much upmarket you want to go, this will likely need to change. Selling and Servicing become a team efforts and Strategic Sellers (Strategic AEs) work together with Customer Success Champions (CSM), organized in Squads.

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In such circumstances Customer Success should not be responsible for Upselling and Cross-Selling. Customers don’t need another Sales person. They need a Trusted Advisor with a different approach. This is not about selling 5 or 10K ARR. You need different people, a different CS funnel, even a different bonus scheme.

Complex topic. Room for another post in the future.

Feel free to share this article if you thing anyone in your network can benefit from it.

If going upmarket is one of the issue that does not make you sleep at night, get in touch and I’ll be happy to discuss further.