It’s a common story: once a startup begins to gain traction, the founder says they want to go upmarket. While it might sound appealing in theory, few of them understand the implications of such a move. The fact is that there’s a clear distinction between the non-professional buyers most startups are used to working with and the professional buyers of upmarket companies.
Some businesses do end up successfully making the switch, but in order to do so, you have to understand the fundamental differences between the two. These differences dramatically influence how you train your team, approach the sales process and overcome challenges.
The Non-Professional Buyer: Quick Wins and Emotional Decisions
The non-professional buyers you encounter in startups and small businesses are exactly as they sound: not specifically trained in purchasing. They’re in the role of purchaser anyway, but their criteria for buying new solutions almost always revolve around their most immediate needs and emotional impulses.
The beauty of selling to non-professional buyers is that their sales process is swift. They may have to run a purchase by their office manager or the business owner, but they don’t have layers of approval to get through. As such, transactions tend to be quick and simple, with minimal paperwork and red tape.
Of course, there are downsides too. These are the sales with low Annual Contract Value (ACV) and often a higher risk of churn. The fast purchase and adoption can sometimes translate into poor or rushed implementation, and may also signal a lack of commitment to the product.
The Professional Buyer: Structured Sales and Rational Decisions
You’ll most often find professional buyers in medium-sized businesses and enterprises. These individuals have been trained to manage procurement, and they know what they’re doing. This means that the sales process is usually long and structured. There’s a clear process they follow, so you’ll have to follow it too.
Even if you get one person on board, your work isn’t done; they’ll have multiple decision-makers involved who all need to sign off on the agreement. This might include additional procurement folks, management, legal and/or IT, and each of them has different objectives and expectations. Given the extensiveness of the operation and all the stakeholders involved, you’re looking at a 30-90 day sales process.
Where the non-professional buyer makes decisions based on emotion and pressing needs, professional buyers are rational and data-driven. They want to know how much implementation will cost and what the long-term value will be. They want to know their projected ROI.
It’s important to be every bit as well-organized and proactive in your selling as these buyers are in their purchasing. They’ll expect you to guide them through the buying journey, while also respecting their process and preferences. Most often, you’ll engage in complex negotiations along the way. While it sounds labor-intensive (and it is), the upside of all this work and attention to detail is that deals like these can get you very high ACV.
Adapting Your Sales Strategy for Sustainable Growth
You can see how very different a non-professional buyer is from a professional buyer, so naturally you will need to tailor your sales approach accordingly. If your team goes after professional buyers as they’ve always gone after the non-professional ones, you’re setting them up for failure, frustration and lost deals.
If you do intend to transition upmarket, you’ll need to very intentionally train and structure your team. Also, it can be helpful to balance volume in sales from non-professional buyers with higher-value deals from professional buyers as you make the change. This way, you can account for implementation and churn risk, and give yourself a buffer as you begin to engage in those longer sales cycles.
In Closing
The idea of going upmarket might sound enticing, but it’s not a decision to make lightly. Founders need to be strategic and take the time to understand different buyer dynamics before making such a dramatic change. Only by aligning your sales approach with the sophistication of your target market can you ensure success as you scale.
