By now you’ve learned that in order to succeed in the SaaS space you need to upscale deals and hyper-focus your marketing and sales efforts via account based marketing. But what good is targeting the enterprise and arming your sales team with extensive training if your product development doesn’t keep up with enterprise needs?
While there’s no one-size-fits-all template for building a great SaaS company, there are a few steps you can take to ensure your product keeps up with large-scale company demands.
One thing that always surprises vendors when scaling up market is the length of security assessments that your enterprise buyers will put you through. Even if you aren’t dealing with highly-sensitive information, this is always a sticking point when trying to close bigger deals.
What you need to remember is everything to an enterprise buyer is sensitive.
They can’t take a risk on a SaaS vendor whose system will be holding business-critical information. This means that you must invest in getting your system to a state where it can support the various security tests and scrutiny that any major enterprise buyer will put in front of you.
To succeed, you must invest in building out an InfoSec team to secure both your internal process and your product. The number of headaches that this will save cannot be understated.
In addition to security concerns playing a role in the contract, service-level agreements (SLAs) will be taken very seriously.
When you have 100 separate SMB customers, intermittent product downtime likely won’t make or break a deal. But when a large company has invested heavily in your solution, you need to be ready to support the necessary scale to ensure your product isn’t constantly going down.
When we started GoSpotCheck (Techstars Class 10), we had a relatively standard and high level SLA. But once you start to make a big name for yourself in the enterprise space, you’re held to a higher standard against your SLAs.
It is critical that everyone on the team, especially engineering, is aligned with the SLA and has agreed to develop product with these standards in mind.
Keeping in mind that everything matters exponentially more when you’re dealing with enterprises, role based access is a must. Large companies are inherently complex. This means that your solution will likely be used by many different users in various groups and levels at the company.
If your solution is not prepared to support varying roles and access levels, your solution will not be a fit for the complex needs of that business.
The more granular you make this from the start, the better. While it may seem complicated and complex internally, it will seem thorough and well thought out externally—a must when looking to win enterprise deals.
Going from SMBs to enterprise deals doesn’t happen overnight. There is endless diligence and numerous tactical components to succeeding as you scale up.
Although there is no way to guarantee success, and it’s nearly impossible to mirror another company’s triumph, there are ways to minimize getting lost in the shuffle.
We recently covered the importance of targeting large-scale enterprise deals. Now we’ll touch on the steps SaaS companies need to take to land these contracts.
The go-to-market approach for these deals is much more complex than a self-service or SMB model and knowing these differences is imperative to SaaS success.
In early growth stages, your sales and marketing team is likely operating under a “spray and pray” approach, hoping to get any level of employee at companies of all sizes to take a look at your product. However, when you’re going after enterprise deals you need to take a more targeted approach.
Since selling to the enterprise means focusing on a relatively small handful of target companies, you must be hyper precise in identifying your targets. This holds true not just for the companies but for the people as well.
Your team needs to be identifying the decision makers at each company you’re targeting and finding ways to get in front of them. Marketing and sales must be in sync in order for this to be executed successfully.
An effective way to do this is utilizing LinkedIn. Create a detailed map of the accounts you want to target. Who is the financial or economic buyer? Who is the champion? Who is the line-of-business sponsor? How will IT be involved?
You have to create a list of these personas and then create a list of the buyers with corresponding, relevant messages. Account-based marketing tools like Terminus can help accelerate and focus this process.
When out-bounding and marketing, remember that large enterprises don’t want a tool—they want a solution to their most pressing problems. This means that you must position yourself as a leading solution that can handle the complexities of large enterprises.
These companies are potentially about to part ways with hundreds of thousands of dollars for a solution, so you must position your company as one that can handle their requirements and unique needs. Further, you must position yourself as a stable company that will be around for the long haul.
The last vital component to going after large-scale enterprise deals is a highly-enabled sales team. Reps can no longer operate as order-takers when you are selling to the enterprise. They must be thought leaders with a strong opinion. They must have access to and be able to coach your buyers about informational content that can bring them to the buying stage.
Your sales reps that are selling $100K+ deals need more than simple training. They must be able to recognize the drivers of your customer’s business and how your solution can transform their ability to do their job well. They must understand the intricacies of the problem and provide a seamless solution which your product can solve.
This means it’s up to you to invest heavily in training and equip your reps with thought leadership pieces, including relevant case studies and ROI analyses. An investment in technical salespeople or sales engineers will ensure your team has all the resources they need to run a large deal.
Graduating from SMB deals to enterprise-level contracts isn’t rocket science. It is, however, a very technical and demanding process that will take more time and money than your team is used to. But the size of one deal eclipses that of so many small ones that it’s well worth it in the end.
When you’re just starting out as a SaaS company, every little thing you do matters. You’ll pursue deals that you wouldn’t even consider a few years down the line, and you’ll do absolutely everything you can to cater to the few customers you have.
But by the time you hit $1M in revenue, you need to decide where you want to focus for longer term growth.
There are many growth strategies that can work well in SaaS, but if you have the potential to focus your efforts on going upmarket and playing for bigger deals, an enterprise-oriented approach can be tremendously effective.
Most aspiring SaaS companies aim to grow revenues in line with the T2D3 target – a lofty goal for any young company. The key question you have to ask yourself as an entrepreneur is how you can plan and drive that growth.
An enterprise approach allows you to grow your business by closing fewer deals at a higher contract value, securing long-term commitments and stable relationships with your customer base, and building a foundation of loyal customers that have large budgets to buy more of your products and services.
Once you get past $10M in annual recurring revenue (ARR), it becomes very difficult to add $10M+ a year in ARR by closing very small deals. It’s doable, as many great SaaS companies have shown us, but it’s undeniably easier to get there if your typical deal size is larger.
If you can get your average deal size up to $1M, you only need 10 new deals to double to a $10M business. This means that you only need 40-50 real opportunities each year in order to hit your growth goal.
Clearly, that’s much easier said than done, but the incremental revenue added from each enterprise deal is significantly more than it would be otherwise and the ability to focus on a small list of targets aligns your team’s efforts.
Companies that are willing to pay six figures or more for a solution are more likely to commit to longer-term deals with their vendors. It’s not easy to implement a solution that consumes a large budget, meaning that they want to bet on products and services that they intend to use for longer periods of time.
Additionally their organizations tend to be more stable and less likely to go out of business, unlike SMBs.
Enterprise buyers tend to not get involved with vendors for flings, as they much prefer to get married to their vendor of choice. This means that you can negotiate two to three year deals at the outset, which gives you a lot of stability in building and planning your business.
Larger companies also tend to have many different divisions. They’re often excited to purchase new capabilities and services from vendors they love, making the upsell and expansion possibilities much more impactful for your business.
Due to the complexity of large organizations and the close relationship you can build with your enterprise customers, you can quickly develop and launch new products and services that your buyers will be interested in implementing.
This contract growth and expansion potential means that you can create an upsell machine that can drive relatively cheap and low-risk growth. In a best case scenario, you can generate pre-orders for your new products, funding the development of new modules or offerings.
There’s no denying that every deal your company will ever win will help lead you to success. From a customer support and attention standpoint, it’s important to tend to your full customer base.
But if you’re looking for growth that will lay a stable and growing foundation for your business, enterprise deals are where your head needs to be, both in the near and distant future.