The CEO goes "Let's go Up Market"
As advisors to and board members of lower middle market companies, there is definitely one initiative that we see teams underestimate; moving up market. Gone are the days when you could simply download a list of “Enterprise” targets and load up the spam cannon.
To build a motion that endures, we’ve listed 5 elements to consider before we make the move.
Review these 5 elements with the revenue team before presenting a plan to the Board to go up market.
1. The Trinity: Product, Pricing and Packaging:
Product: Don’t assume that because we have several “Enterprise” customers using our product that we have product-market fit, and especially not messaging-market fit. It is likely that when we service larger customers, we actually open up a new set of “jobs” (as in Jobs to be Done) than are tangential to the Job with which we’ve had success in our smaller segments. We therefore need to map the entire workflow typical of our larger customers to reveal these jobs.
Pricing: strategies in the upmarket segment can be significantly different from those in lower market segments. Upmarket clients often expect pricing models that reflect the value they receive, which can mean more complex, value-based pricing strategies. The pricing must make sense for the level of service or product quality offered and should be positioned in a way that aligns with the perceived value in the eyes of these larger clients.
Packaging: Effective packaging is hard work. Dissect the workflow into sub-assemblies, understand how each part works, and identify gaps. This detailed analysis helps in forming a clear picture of the market needs and how to tailor products and services to meet them. Ideally product packages work together to solve a set of problems that customers begin to experience with size and NOT bundled on the basis of what we think we can sell. The former is far stickier than the latter.
2. Dealing with a New Competitive Landscape:
Moving upmarket means facing different and often bigger competitors. This requires a different approach than used with smaller clients, including understanding the new competitive landscape and how to position the product effectively. Does your messaging fit the new landscape? Do you know who your competitors are? Are you targeting the user of your product and not only the decision maker in the company?
3. Leveraging Existing Enterprise Customers:
Use your existing enterprise-level customers to understand and navigate the upmarket space. Engaging with these customers, possibly through a customer advisory board, can provide valuable insights for moving upmarket.
4. Holistic Team Approach and Strategic Planning:
The process of moving upmarket requires a coordinated effort across all departments – product development, sales, marketing, and customer service. This coordination should be part of a well-thought-out strategic plan that considers the organization's direction and goals.
5. Setting Realistic Expectations and Goals:
Understand that getting to significant, predictable revenue from moving upmarket will likely take longer than expected, especially for in-year revenue. The focus, therefore, should be on proving the concept and building towards long-term success.
