My first day in B2B sales, I onboarded with an account executive who was part of my new company’s enterprise sales team.
Confession: I had no clue what he meant by “enterprise.” With my college drop-out education, I’m sure my mind was thinking Star Trek or rental cars.
I had no clue what he meant by “enterprise.”
Instead of tipping him off to my ineptitude, I consulted my best friend, who was also in sales.
He explained that enterprise companies are massive accounts that would need our product (SaaS for logistics) on a tremendous scale.
He also mentioned that the resulting paychecks were comparably huge, as well.
At that point in my life, “huge paychecks” was all I needed to hear: I wanted to sell to enterprise clients.
Now that I’ve made the move into enterprise sales, I find it rewarding for a multitude of reasons.
But I’ve quickly learned it’s a completely different playing field. That’s why I’ve written this guide for other sellers trying to find their place in the sales world.
Table of contents
SMB, mid-market, and enterprise: What’s the difference?
If you already know, feel free to skip ahead. But if you’re like I was and are wondering why your tech company is getting into the car rental game, here’s a quick rundown.
Where a company falls is usually determined by two things: number of employees and annual revenue.
The exact values differ by country, industry, and governing authority. But my research shows they most often go as follows:
These definitions are a great rule of thumb. But there are times where it may not be clear where a company falls and it will be up to your discretion.
Join the conversation: The Ongoing Battle of Defining Enterprise vs Mid-Market
For example, if you ask anyone at my company who we sell to, the answer will most likely be mid-market or enterprise companies. However, we put more weight on their revenue than employee count. As a result, a lot of our clients may have mid-market annual revenue, but SMB employee count.
Selling to SMB (Small and Medium Businesses)
Benefits of selling to SMB
Larger lead pool
99.9% of U.S. businesses fall under the SMB banner. This means there is a giant pool of potential customers out there for you to prospect!
✅ Simpler sales process
SMB businesses generally make decisions faster. Smaller buying teams mean the sales process is less complex, which can make the decision-making process less complex as well. Oftentimes, these deals can be closed on the first or second call.
⛰️ Room for growth
The larger lead pool and simpler sales process allows you to experiment more and get creative in your approach. Trying out new tactics is critical for developing your skills as a seller — so selling in this space is a great way to level up.
The network effect
Small businesses talk to each other. If a small business customer is happy with you, your company, and product they will often refer you to another small business.
Drawbacks of selling to SMB
Fewer impressive logos
Most small business brands aren’t very well known — which makes it hard to use current customer success as a proof point when pitching a new client. It’s much easier to be successful with this tactic using a brand the prospect has heard of.
Smaller deals = less money
Smaller businesses mean smaller deals. Therefore, there is a much lower cap on the amount of time and money you put into pursuing individual deals.
Tips and best practices for selling to SMB
Lower the risk
Small businesses generally don’t have buckets of cash to play with, so structure deals in a way that minimizes the risk for them.
Need ideas? Offer monthly contracts instead of annual. Offer a free trial or some form of guarantee. There are tons of ways this can be acheived.
Many of the top-performing sellers I’ve worked with over the years get the majority of their business from referrals. So take advantage of this!
Need ideas?Ask every customer for a referral. Offer a discount or cash incentive for a referral that buys.
️ Stick to your ICP
With that giant pool of potential customers, it’s important to make sure you’re qualifying leads early and thrououghly.
Pay attention to the metrics to identify your best customers and set your sights on selling to the ideal customer profile.
Selling to mid-market
Benefits of selling to mid-market
A wide prospect pool
While there aren’t nearly as many mid-market companies as SMBs, there are still nearly 200,000 in the U.S. and millions worldwide. There are plenty of potential customers out there just waiting to be prospected!
Larger companies = larger budgets
This one may go without saying, but larger companies are willing to spend more to get more. The larger their revenue is, the larger your potential revenue becomes.
More stability = better customer retention
Mid-market companies are better established and more stable. They are much more likely to stick around as a customer, assuming your service continues to meet their needs.
Experienced buying teams
Buyers at these companies are generally well experienced in making these types of deals. They have a clear understanding of what it is they need and more reasonable expectations.
Drawbacks of selling to mid-market
️More complex buying process
Much more complex buying process. Larger companies have more complex problems that need solutions to match. There will be more decision makers involved that will need to sign off on what you’re offering.
You’ll need more skill and flexibility
You will need to be flexible within your sales process. Sticking to a proven sales process is important, but deals on this scale aren’t as cookie-cutter as SMBs. Don’t be afraid to adapt and go off the beaten path in your sales process if it helps things go more smoothly.
Tips and best practices for selling to mid-market
Again, be flexible
Adapt your sales process to meet the needs of the buyers. Making the buying process easier for the buyer will make the sales process easier for yourself.
If you can navigate the sales cycle with a good rhythm that maintains momentum without sacrificing quality, you will convert at a higher rate and get more deals done.
Be flexible with your product offerings too
Out-of-the-box solutions often work for SMBs, but that isn’t the case with mid-market companies. While they’re more willing to adapt to your product than enterprise companies, you may want to make your solution easier to use and more intuitive. Changes to contract terms, pricing structure, etc. can help win a deal too.
Use tools to automate following up with prospects
Since mid-market deals take longer, use automation to follow up with prospects in the early stages of the sales cycle so you can focus on those closer to buying.
⚖️ Segment your prospects
Do a deep dive into the data to make sure prospects match your ICP. From there you can organize into lists to target leads more efficiently.
For example you could have segments lists for demographics (age, gender, location, etc.), known interests, hot leads (engaged), cold leads (unengaged), existing customers (single purchase); there are endless possibilities.
Join the conversation: How to transition from SMB/Mid-Market to Enterprise Sales
Selling to enterprise
Benefits of selling to enterprise
Enterprise level companies will generate the most revenue per deal. They have massive budgets and won’t scoff at spending piles of cash to solve an important problem.
Top-tier buying teams
They’re intelligent buyers who know what they need. They will pay a premium price for a premium solution to their needs. They value good service and know what to expect during the buying process.
There is value in having their name among your client list. Future clients will be more likely to trust you knowing such a prestigious company already does.
Drawbacks of selling to enterprise
⏳ Long sales cycles
The sales process is difficult and time-consuming. The sales cycle can take anywhere from 6-18 months.
‼️ More moving parts
There are more decision makers involved. Not only does this lend to the longer sales cycle, having all of these moving pieces makes it very easy to to make a mistake that can completely derail your deal.
Small prospect base
There is a much smaller lead pool. There is a very limited number of enterprise level companies- around 350k worldwide.
Challenging customer retention
Not only are enterprise level clients hard to land, they’re hard to retain. They demand the very best, and if they aren’t getting it they are quick to look for other solutions.
Tips and best practices for selling to enterprise
️ Make sure they match your ICP
I know I’ve preached sticking to your ICP throughout this article, but when it comes to enterprise prospects it’s even more relevant.
With the amount of time, energy, and money involved in pursuing enterprise clients you need to make sure they’re a good fit or you risk it being spent in vain.
⏭️ Have a clear sales process
With so many people involved and so many resources being used you need to be able to track your progress and make sure everything is going as planned. Having an outlined process for this is crucial.
Continue to learn and develop skills
Only the best fishermen land whales. You should always continue to develop your skills, but even more so with enterprise prospects. You need to be at the top of your game.
️ Set up an account mapping strategy
Go look at your company’s organizational chart and then recreate this for companies you’re selling to.
This will help you get a good grasp of everyone who will be involved, the decision makers you will need to win over, and the end users who will get the most value from what you are offering.
There is a lot more to be said about the difference between the three classifications of businesses and the strategies needed to be successful selling to each one. I had to cut a lot from this article because I found myself diving a little too deep.
I’ve found out in my career in sales that it can’t be understated how important it is to be in an area that matches your skills, you’re motivated, and most of all happy. I hope this article shed some light on where you should position yourself to achieve this.
Edited by Kendra Fortmeyer @ Sales Hacker 2022