Tighten enterprise sales cycles with bottom-up growth
Large organisations buy slowly, especially when buying critical components of their digital architecture. These long sales cycles are why enterprise selling is so expensive: the more time and effort each sale requires, the more you spend resourcing that sale. It takes time to convince a large organisation to adopt your product.
Bottom-up SaaS is a sales strategy that targets individual users or teams within an organisation rather than the organisation as a whole. The goal is to sell to some individual users first and then upsell the broader organisation later. Bottom-up growth is excellent because:
- It enables individual users to adopt your product and pay you for it without the endorsement of their leadership team. This situation should accelerate logo growth (though each new customer will pay you less at first).
- It delays the tough conversations with CEOs, CIOs, CTOs, and other leaders. When you speak to them, they already have employees or teams getting value out of your product. These internal advocates can help you prove your product’s value and close the deal.
- It turns the sales process into more of an upselling process. In many cases, customers know the value of your product by the time you talk to them. Rather than sell the benefits of your core product, you sell the benefits of an enterprise license with specialised features and improved security.
Is your product suitable for a bottom-up strategy?
Shorter sales cycles sound great to any founder, but not all products suit a bottom-up strategy. Characteristics of suitable products are:
- Atomised value. Products must be valuable to individual users and teams. Some products are only useful to independent users if their entire organisation use them. It’s easy for an employee to adopt their own to-do list app, but an accountant can only adopt accounting software with the cooperation of their organisation. Some products must be bought by an entire organisation to work.
- Self-serviceability. Barriers to entry will block bottom-up adoption if users cannot independently adopt, configure, and use a product. If customer service or professional services are required to adopt a product, individuals cannot adopt it without enterprise buy-in.
- Progressive or freemium pricing. Organisations rarely empower individual users and small teams to purchase expensive tools without approval, so pricing is critical to bottom-up sales. Products should be cheap enough for a small team to buy, but pricing should scale to fairly monetise enterprises when they fully convert.
Companies that can’t rely on bottom-up sales due to the nature of their product can create side effects or tools to attract customers and generate interest. These side products are typically free or low-cost, easy to adopt, and provide value to a broader audience. From here, they upsell their core products.
The bottom-up customer journey
Regardless of their sales methodology, marketing teams should only target individuals who can actually purchase their product. SaaS companies with traditional enterprise sales strategies target CEOs, CIOs, CTOs, and heads of department in their marketing efforts because these are the people with the power to buy. Anyone can adopt a bottom-up SaaS product, so these marketing teams tend to target individual users instead. The needs of buyers and users can be dramatically different, so messaging for bottom-up marketing campaigns look very different to traditional enterprise marketing.
Salespeople who sell SaaS to enterprises spend most of their time talking to those buyer personas (CEOs, CIOs, CTOs, and heads of department), regardless of their growth strategy. It might be easier to sell to individuals, but if you want to land large contracts, you usually need to sell to the executives eventually. In the traditional enterprise SaaS model, salespeople sell upfront: they work with prospects yet to adopt their product. In bottom-up SaaS organisations, salespeople mainly sell to existing customers. They reach out to self-service customers, find out who they need to speak with to bring the entire organisation into the fold, and sell from there.
Customer success is critical to both types of startups, though bottom-up companies tend to focus more on upselling, while traditional SaaS may concentrate more on renewals and retention.
Enterprise sales cycles are long because it takes time to demo, build trust, and prove value to all stakeholders. Even the perfect pitch can be delayed by compliance and budgetary approvals. ↩︎
It is also costly to lose a deal you’ve invested a tonne of effort into, making enterprise sales cycles quite wasteful. ↩︎
Like almost everything, this is a spectrum. A time-tracking app is helpful for individual employees and better for whole teams and organisations. Slack is useless for individuals, useful for small teams, and great for large organisations. An inventory management solution is futile unless an entire warehouse adopts it. ↩︎
Enterprise SaaS companies tend to offer professional services to compensate for usability challenges. This can make it difficult to transition to a self-service model, as they may need to rebuild the entire onboarding experience. ↩︎
Atlassian uses Trello to upsell Jira. Adobe uses its mobile apps, like Spark, to upsell its professional suite. HubSpot offers a variety of marketing tools to upsell their CRM. Note that while this is a great way to acquire leads, it can be a dangerous distraction for early-stage startups. ↩︎
While users want to get their work done and have a pleasant time doing so, buyers care more about security, reporting/analytics, and cost. ↩︎
1 May, 2023
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