Moving upmarket is often associated with selling to enterprise businesses. While this can be the case, moving upmarket essentially involves selling to larger teams and businesses than you’re currently landing.
If you’ve been selling to professional consumers, you can move upmarket by selling to the teams of these ‘prosumers’ on a self-serve basis. If you’re already selling to big teams via self-serve, you can improve your reach by introducing sales-assisted packages to land larger companies.
The key to moving upmarket is having a product and service that your current customers love. If they’ve integrated your product into their workflow, who else could?
Let’s take a look at the data behind this route to growth.
Moving upmarket is one of the top 2 most popular growth levers
As we introduce in our blog SaaS Growth Strategies: The Five Stars Framework, we’ve identified 5 key growth levers to grow your SaaS company.
Expanding your Product Suite
Of the hundreds of SaaS companies we surveyed (all with between 1 and 500 employees), moving upmarket was one of the top 2 most popular growth levers. 44% of respondents said they have taken this route to grow their company , while 47% of the companies we spoke to have expanded their product suite as a means to grow their business.
We also found that moving upmarket and product suite expansion are the most popular growth tracks to be used by companies who haven’t already done so, with 58% planning to make the move upmarket in the next year.
We asked SaaS companies, “will you be moving upmarket in the next 12 months?”
SaaS companies are reaping the benefits of selling to larger customers
47% of the SaaS companies we spoke to said the biggest success while moving upmarket was the greater value created by their product thanks to deep product usage. That’s not the only upside of upmarket, either…
If a big success of moving upmarket is the greater value created by the product, then perhaps it makes sense that product is the other main focus for SaaS companies wanting to scale. We’re not so sure product should be the biggest focus, however, as we explore in our blog SaaS Commerce Trends: Are Companies Taking the Wrong Routes to Grow?
There are some downsides to selling to larger customers
So companies are benefiting from a broader market, faster revenue from larger clients and reduced churn. What’s not to love?
The companies we spoke to cited several difficulties they had when moving upmarket:
We didn’t just want to hear about difficulties experienced by SaaS companies who’ve moved upmarket, though. We also wanted to hear from those who haven’t started selling to larger customers to ask them what they perceive to be the biggest blockers to taking this route.
The top reason given for not taking the step to move upmarket is the requirement of a different product in order to do so (38% of respondents gave this reason) . This was closely followed by the perceived difficulty of hiring a sales team (a reason given by 35% of respondents).
Are you in the process of moving upmarket - or looking to take the leap - and seeking advice on some of these big blockers? Learn more about the 5 key growth levers and get advice on determining your optimal pricing plan, building a sales team and more from our SaaS Commerce Trends: 2020 Report.