2023 was a tough year for enterprise sales, bringing a renewed focus to mastering go-to-market (GTM) fundamentals.
While enterprise buyers continue to be under intense scrutiny, creating prolonged sales cycles and higher churn, early-stage enterprise startups have held a relentless commitment to navigating this demanding landscape - with entire GTM teams (everyone from the founders and those who touch sales, marketing, product, etc.) all hands on deck to effectively sell their product.
According to Lightspeed Venture Partners’ Sales Benchmark Report, in 1H 2023:
As we at Work-Bench get in the trenches to support our early-stage portfolio companies in building and navigating their enterprise GTM strategies, one mantra we repeat everyday is that "customers are like oxygen." This serves as a reminder that creating a great product is just the beginning of the journey. Despite today’s market challenges, the good news is that mastering enterprise sales is a learnable process. There exists a clear, repeatable method amidst the madness.
See below are our top 5 tactics aimed to empower early GTM teams to build a powerful distribution engine and close enterprise sales in today's market:
As a VC, it’s in our DNA to cheer for underdogs and appreciate a David vs. Goliath story. However, this doesn’t excuse startups to dismiss or underestimate competitors. Enterprise software buyers are more savvy than ever, so you better believe that prospects are well researched on the overall landscape.
Legacy Incumbents: Remember, established incumbents hold that title for a reason. At some point, they encountered and tackled the same sales and procurement hurdles you’re facing now. Oftentimes, these software solutions / systems may appear outdated, however they offer a specific benefit that justifies their continued use, such as robust customer support or integrations across all products. Whatever the reason, at the end of the day, the age-old saying “no one ever gets fired for buying IBM” continues to ring true.
Fellow Challenger Startups: There are likely a handful of other startups in your same space. Operating in a crowded domain means it's incredibly important to be able to differentiate your product to stand out. Oftentimes, you may find yourself in direct combat, spending a crazy amount on sales and marketing to outshine others who closely resemble your offerings.
When competing with others, a dilemma arises of building a “good enough” product, relying on offering a lower pricing than competitors. However, the biggest challenge within enterprise sales is not budget. Instead, it’s what we call “all the other drama” within a customers’ organization - including internal politics, fiefdoms, business processes, and competing priorities - and sometimes the existing solution being sometimes just good enough.
Oftentimes, the websites of various competitors can look strikingly similar, spanning font and design to the core product messaging. In today's competitive market, it's critical to carve out a distinctive edge that sets your product apart from the crowd. This differentiation can manifest in many different forms, such as unique product capabilities, an exclusive data set, a specific target segment, your brand ethos, or the community you serve.
See more on how to do this in our Differential Messaging Template here.
Consider the comparison between Cisco’s WebEx and Zoom. At a first glance, they appear to be the same video meeting solution. However, a deeper examination reveals that Zoom intentionally chose a different GTM game plan, focusing on a different set of customers from the onset – encompassing self-service, SMB, and mid-market sectors that posed challenges for Cisco to serve.
While we don’t believe that startups should obsess over what competitors are doing, it is critical to be aware of how competitors are going to market, as it can strongly influence how you might outmaneuver them to win with pricing and packaging.
While the majority of founders tend to be highly product-focused, it's important to recognize that in enterprise software, victory isn't solely dictated by having the best product or feature; often, it boils down to the efficacy of your pricing and packaging strategies. See the below on how to build a hand of “defensible cards” on pricing and packaging that can separate you from your competitors:
Discovery and demo calls with prospects are often the make-it-or-break-it touchpoint that sets up the success of the rest of the sale process. However, the No. 1 trap many founders and sales reps fall into is using this limited (and precious!) time by immediately diving into a product demo and feature description. This isn’t surprising, given how much effort goes into building a product. However, it fails to demonstrate how the product will solve the prospect’s business challenges.
How do you best understand a prospect’s business challenges? Asking the right discovery questions is critical, to uncover the following:
From here, you can be more intentional about crafting a customized demo that demonstrates the value your product brings to their use case, challenges, and environment.
Founders always review the deals that were won. However, what often gets overlooked are the deals that were lost. While dwelling on these missed opportunities might not appear productive, creating a centralized list of objections raised by these lost customers can reveal insightful patterns — such as implementation hurdles, interoperability issues, and feature deficiencies, among others. While some deals might be lost due to the decision to build internally or go with a competitor, it’s surprising how many of these seemingly “lost-forever” deals might stage a comeback.
Devote a dedicated period each month — around two to three hours — for a thorough “20 Deal Grind” session with the sales team. The process involves delving into key aspects, including understanding the customer’s profile, dissecting the rationale behind their purchase decision, analyzing factors contributing to non-purchases, evaluating the effectiveness of sales messaging and responses, and reviewing other employed tactics. Utilizing tools like Gong or a similar call recorder to record sales calls gives the opportunity to review calls and quickly iterate messaging. Then create a library of recorded calls (both good and bad), which can serve as a learning resource for future hires during their onboarding process. Additionally, roughly twice a year, run a “closed-lost revisit” campaign to re-engage with past, lost prospects. Maybe the perceived risk associated with the offering has lessened over time or they didn’t roll out with that competitor or their internal build failed. This outreach offers a chance to rekindle relationships and explore potential opportunities that may have been overlooked in the past.
When conducting an enterprise sale, you might run into a buyer who has never purchased software before. Many have either simply swiped a credit card (self-serve) or used free trials (bottoms up). One of the best qualifying questions to ask your prospect to dig into this area is simply “have you ever bought software before?” Knowing this information is critical in the success of the rest of the procurement process.
In many cases, even if the answer is “yes, I have bought software for my company before,” you have to be methodical in walking the buyer through the process anyway as your product and success criteria will be unique to their prior purchases.
The goal is to eliminate the guesswork and clearly establish next steps of activities and timing needed to continually advance a prospect and ultimately close a sale. There are certain assets like a Mutual Action Plan that come in handy – a document that allows you to collaborate with your prospect and outlines the series of sales touch points (documents, meetings, and nessecary stakeholders) through close.
Lastly, you might need to remember that in a newer category, it’s likely customers won’t know how to measure ‘success’ with your new software. Additionally, make sure that your team is dictating what success metrics should look like and measure it with/for them. This way, your customers will not only use the product, but recognize the value of it. This is especially important in renew, upsell, and reference conversations.
Given there is little room for missteps in today’s market, what we hope to achieve in amplifying these tactics is to help founders and sales teams avoid unnecessary errors and stay disciplined in their GTM approach. For more GTM tactics, check out our Enterprise Playbook Library, which spans various Sales, Marketing, Finance, Fundraising, Legal/Contracts, and other topics.
