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Enterprise vs startup sales: what are the differences?

August 3, 2021

Not so long ago, Team Cognism was scrolling through LinkedIn, and we saw this post:

The topic - enterprise sales vs startup sales - really resonated with us.

So we decided to contact the author and invite her to share her insights on our blog.

Laura Erdem is an Account Executive with a very impressive CV. She’s worked at enterprises and startups, and so has a unique perspective on how the sales process operates in both sectors.

Previously, Laura was an Enterprise AE at Gartner, the global research and advisory company; today she’s an AE at Dreamdata, the leading B2B revenue attribution platform.

“There are two sides to enterprise vs startup sales,” Laura told us over Zoom. “There’s selling a product, and then there’s selling into a company. There are big differences between the two.”

We asked Laura about both. Scroll 👇 for her answers.

1 - Enterprise vs startup sales: selling a product

The big difference

“The main thing is that when you’re selling a startup product, nobody knows your brand. With most enterprise products, everyone is aware of the need. Not so for startups! So you have to change the way you sell that product, compared to what you would do at an enterprise.”

“When I first made the jump from enterprise to startup, I was using the same outbound sales techniques as before, but they were perceived as too aggressive. No one was reacting to me at all - cold calls, cold emails, I wasn’t getting any responses.”

Laura realised she had to change the way she approached selling a product.

“Social selling became a big thing for me. When I was working at Gartner, you could share reports with prospects and that was enough. With startup sales, you have to work out how best to approach clients and when.”

“In startups, you have to tackle a number of problems at once. First of all, your prospects most likely won’t be aware of your brand. But it goes deeper than that. Chances are, they don’t even know the problem your product is solving - usually because it’s either very innovative or very niche.”

“So you need to work out your target market before your start selling. You have to know who you want to reach and what messaging is going to resonate with them. You have to educate your prospects, not just about your product, but the problem it solves.”

Laura uses a checklist when she starts prospecting:

  • What’s the problem the prospect is facing?
  • How big is that problem?
  • Do they want to solve it at all?

“Selling a startup product has to be very problem-based. That’s not like it is in enterprise, where budget is king; if you have a problem, the budget is there to solve it. In startups, nobody has budget! So you have to really double down on the problem-solving aspect - you have to show your prospects how your product is going to solve their problems.”

The sales process

Laura refreshed the way she sold when she joined Dreamdata.

“I started being extremely active on LinkedIn. I connected with the right people in our ICP and I started to post daily. The key was in delivering value without selling at all; it was all about building awareness.”

“People resonated with the content I was putting out, I wasn’t pitching at all but I was still getting meetings booked. Being active on LinkedIn was a great way to start conversations with people in my target accounts.”

“I find startup sales is very conversational, it’s about having a dialogue between people. That’s why LinkedIn works. You have to do it strategically though. Only connect with people who fit your ICP and comment on their posts. You have to build a relationship before you can do anything else.”

Moving on from that, how did Laura get people to buy?

“It’s tough, especially if you have product-led growth and a freemium product. People start using it for free; what you have to do then is discuss the differences between the free offering and the paid one. It’s best to start this discussion early, so prospects are aware of the possibilities, limitations and cost in advance.”

When in that situation, Laura asks these three questions:

  1. Does the product work?
  2. Are you getting value out of the product?
  3. Is the value high enough for you to start paying for it?

Laura told us that getting into an agreement to pay for the product can be complicated. Therefore it’s important to:

  1. Cap the trial time if the prospect matches the typical ICP of your paying clients.
  2. Define the process of becoming a client ahead of the free trial.

“It’s good to be upfront with the price early on. Pricing usually comes up earlier in startup sales than in enterprise. Communicating a price early helps salespeople to disqualify prospects that wouldn’t be able to purchase the product.”

“After the product value is defined for the prospect, if the value is high and critical enough, then the price discussion comes next. It’s rare that prospects are able to put a price tag on a challenge they haven’t been solving before, but they usually know what is the range of price they’d be able to pay for it.”

“So if your product price is significantly higher than the prospect’s budget, then you have two options: suggest they continue using your free product and getting the most out the of free product values, or asking them…”

“This will cost you x amount per year. How does this sound?”

“If the prospect isn’t ready to move on to a paid version, you can always direct them to try out a free trial or a free version of the product.”

“But - and this is very important - depending on the version of freemium your product is offering, inform the prospect either that it’s a time capped trial or that the free version of a product has certain limitations that are only available for paying clients.”

“Then you can discuss the next steps with the client to move forward.”

“You should note that the prospects’ best interests should always stay in centrum. It could be that your free offering is enough for the client, or you could inform them which product features are key for them to have in the paid product to ensure their long-term success.”

“Position it as an investment in them. Make them aware that you can always adjust the product to meet their specifications.”

This brings us to another key difference between enterprise and startup sales...

Pricing flexibility

Laura expanded on this topic for us.

“At an enterprise company, they know the product and they know the audience. The market they’re selling into is often really broad. So the pricing is much more rigid. If you want to offer a potential customer a discount, lots of people have to agree to that. You might even get a no!”

“At a startup, you’ll be working with an approximate price, but there’s much more flexibility. As a salesperson, you can tailor packages for certain clients. You can add on extra things to sweeten the deal or offer discounts - one thing we do at Dreamdata is offer 10% off but the customer has to give us a review and participate in a case study.”

Aligning sales and product

We asked Laura what the differences were between the sales team/product team relationships in enterprise and startups.

“Let’s say you’re working at a big enterprise org. A client comes to you and asks for a product feature that you don’t have. 99% of the time, you’d say we don’t have it!”

“But in a startup, you’d really investigate that with your product team. Can we put that feature on the roadmap? The product, sales and marketing teams are all much closer. It’s really all one team. You’re constantly communicating and collaborating, and that really doesn’t happen at an enterprise.”

How does Dreamdata manage that alignment?

“It starts from the very top. You have to have company-wide goals that everyone agrees on and is invested in. Every time should be working towards the same goals.”

“Then once you have those goals in place, it’s all a matter of process. You have to knock silos down and ensure everyone’s working in sync.”

“How we do this at Dreamdata is that we have daily standups involving the whole team. We encourage people to raise issues and discuss solutions. At the end, we’ll agree on the next steps to solve a problem and who has ownership of them.”

“Don’t underestimate the power of technology here, either. Communication tools like Slack enable your teams to stay in touch and talk to each other in real-time.”

2 - Enterprise vs startup sales: selling into companies

The big difference

“The main thing here is the number of stakeholders involved in any deal. When selling to a startup, you usually have easy access to the decision-maker. Often it’s just the CEO or founder. They have a problem, you demo the product, they like it, deal signed! It is of course a dream scenario, but usually, you wouldn’t meet more than 3 stakeholders when selling to a startup.”

“When selling to an enterprise, one AE oversees the deal, coordinating the process for all the decision-makers, influencers and internal resources that will help during the process, either from the technical perspective or 1:1s with C level decision-makers.”

“So straight away, you can see what the challenges are. First of all, there are lots more people involved in an enterprise sale. Secondly, you don’t have easy access to the decision-makers, you have to go through an intermediary. Thirdly, enterprise sales takes a much longer time as many more stakeholders are involved.”

“Also, with enterprise, you have to provide lots of information to the different stakeholders involved. In a startup sale, you might have one deck or one-pager for the CEO or founder, but in an enterprise sale, you’ll have decks for sales, marketing, finance, IT, legal etc! There’s a lot more to think about and really it boils down to project and stakeholder management.”

Internal resources

“Selling to startups is a numbers game. The deals are smaller and so it’s more about volume than dedicating all your time to one big deal. You have to keep generating leads and opportunities and there’s less admin involved. So at startups, you’ll have junior SDRs and AEs working with clients.”

“In enterprise sales, usually more experienced, senior-level salespeople are responsible for the deal coordination, while more junior-level SDRs help on side support with things like booking meetings with stakeholders or coordinating the internal process between the tech teams or pricing.”

Multiple decision-makers

One key differentiator between startup and enterprise sales is the number of people involved in a deal. We asked Laura how best to manage this.

“Think of it this way: in an enterprise sale, usually you have a decision influencer or a coach who coordinates the purchasing process. You have to follow their internal process, which is: everything goes through the decision influencer.”

“That person is critical to your success. You have to be on good terms with them. Always ask them for feedback and what you could improve. Try to introduce people from their company to the equivalent people at yours. You want to open up different channels of communication and see if you can speed up the process along.”

“One thing that works very well is to pre-empt the people that will need to sign off on the deal. You could say something like…”

“You want to buy from us, but all these people will need to be involved.”

“To speed this up, we actually published a blog on how to sell Dreamdata internally. It’s very useful as it gives enterprise prospects the heads-up on what will be required to make the deal go as smoothly as possible.”

Product messaging

In Laura’s opinion, how do product messages change when selling to enterprises vs startups?

“For enterprise - you don’t just sell the product, you sell the value. They want to know who your other customers are and how do they fit in with them. It’s a long journey to embark on.”

“For startups - it’s very product/features led. You have a problem, our tool can solve it! You demo the product, the prospect loves it and then they buy. It’s often much quicker and easier.”

Managing a sales team

Did Laura think there were any differences between managing a startup sales team and managing an enterprise sales team?

“The day-to-day is very similar. No matter what, in both industries, you need a good overview of your pipeline and what assistance your reps need. That’s all the same.”

“The only difference from my perspective is, in startups, you have to continue to encourage collaboration between your teams. You want your reps, your marketers and your product managers working in total synergy. We use our own Dreamdata tool to map out the full customer journey of a client, so we know which team collaboration approaches work best for future scale.”

Final question

Our time with Laura came to an end with us asking:

Selling to enterprise or selling to startups: which is harder?

“It’s harder to sell to enterprise, for sure. With startups, sales is all about speed. You have to be fast! If you don’t sell to a company in the first three months, the chances are you’ll never sell to them.”

“Enterprise sales takes a lot longer. Two years can go by before the deal is signed. So it’s about using that time wisely, building a relationship with the company and the stakeholders, gaining their trust and providing value at every stage.”

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