Most sales teams dream of closing a multi-million dollar deal with a Fortune 500 company. While one major sale can help a team reach its annual quota, getting a major deal without an established relationship is difficult at best.
Unless you also work for a Fortune 500 company, It might be more realistic for marketers and sales teams to target small to medium-sized businesses (SMB). It makes sense to focus on SMB because often this group needs the most help and could benefit greatly from your services.
Keep in mind, however, this group often has less money to spend, meaning their purchases are smaller. It takes more sales to really make a difference for your bottom line.
Still, marketers can often find the most success with mid-market sales. Medium-sized companies generally have the same needs as enterprise businesses, but the budgets of small businesses. If you target several successfully, your sales team could close a number of decent-sized deals.
Read on to learn why mid-market sales are an important part of your marketing strategy and how you can convince those customers to keep buying.
Why mid-market companies are an important audience
Mid-market sales might not be the largest business deals inked each year, but these types of sales might be more common than you think. IDC considers medium-sized businesses companies with between 100 and 999 employees. In the IT sector, this segment is expected to make up about two-thirds of all SMB sales through 2021. That adds up to more than $400 billion in transactions.
Plus, the corporate landscape is always changing. Most of the world’s largest and most successful companies began as startups and medium-sized businesses before reaching the level they are today. And some companies that seem successful may not be. CNN reported in 2016 that half of the companies that made up the Dow in 1995 no longer existed 20 years later. Some of these companies merged with others to form new brands, some went out of business, and others simply didn’t exist yet.
It can be difficult to know which companies will be the most successful. If you begin a business relationship with a smaller company and provide the services and products they need, they might continue buying from you as they grow larger. The bigger they get, the larger the deals could be.
Upsells and renewals are cost-effective strategies for mid-market sales
Most companies are looking to expand their current client list, but focusing solely on attracting new customers isn’t always the most cost-effective strategy.
Researchers found that among SaaS companies with more than $2 million in annual revenue, it cost almost five times as much to close a deal with a new customer compared to upselling an existing client. The customer acquisition cost was similar for renewals.
Source: For Entrepreneurs
In addition to costing less, repeat customers are more likely to spend money. The Harvard Business Review found that improving customer retention by just 5% increases profits anywhere from 25% to a staggering 95%.
How to encourage your medium-sized customers to upgrade
The question remains: How do I boost mid-market sales through upgrades? Because even when customers want to upgrade, there’s often still something (or a few things) holding them back.
Here are five tactics you can use to convince your customers to upgrade and increase your mid-market sales.
1. Change the conversation
You might have to change your messaging to better resonate with customers, especially if you’re trying to get them to upgrade their service. When marketing to new customers, you’re focusing on the general benefit of what your company has to offer.
However, your existing customers are probably already familiar with your services. They need to hear about how upgrading would make their lives easier and improve their productivity. (But remember, your marketing materials can’t always be promotional: They should also benefit your readers.)
Speak directly to the pain points they currently have, even with your service. You don’t want to make it seem like your existing service can’t get the job done, but you need to explain how adding new services can reduce additional stressors.
Consider using the Challenger sales model, which poses the worst-case scenario first and then explains how the problem could be avoided with your extra services. Rather than just explaining the benefits of your upgrade, this scenario puts it in a real-world situation to which your customer can relate.
2. Get more detailed in your segmentation
Segmentation is nothing new to anyone with experience in email marketing. You don’t have to be sending emails to use this tactic to increase your mid-market sales. A lot of companies will use basic segments based on customer size, location, industry, activity, and other behavioral or demographic attributes.
When pushing for upgrades, you need to really dig in on the segmentation. For example, a law firm with 200 employees that needs improved document solutions is very different than a tech company with 750 employees that needs to better integrate its CMS into other applications. Consider grouping your upgrade candidates by company size, revenue earned, pain points, and specific business needs. This will help you deliver more targeted messages that speak directly to what they require.
3. Use email automation to nurture active leads
Once you zero in on your messaging and segmentation, you should create lead nurturing campaigns using email automation. Use customer journeys and drip campaigns to send emails based on web or app behavior. As your customers move along their journey, you’ll develop more qualified leads that are more likely to upgrade.
It’s important to remember that lead nurturing emails aren’t always designed with sales in mind. Consider this great lead nurturing example from LiveChat:
Source: Really Good Emails
Here’s a great strategy to follow up this email. Set up your drip campaign workflow so an email goes out a few days later to everyone who opens the report. The email should include a subtle push about how your next-tier solutions address some of the customer service pain points mentioned in the study.
4. Use sales prospecting to re-engage with cold leads
We’ll admit that sales prospecting isn’t always the best strategy to use when searching for customers to upgrade. In most cases, this tactic has the same results as a cold call or reactivation email campaign. However, you can make it work for you if you play up the FOMO factor in your communications.
The airline industry does a great job of using this type of psychological marketing in the following email.
Source: Really Good Emails
Treat your initial sales prospecting email or phone call with your customer more like you would a new client. Learn if their needs have changed or if they have new pain points. From there, you can let them know about the service or product upgrade that competitors in their space are already using. This might be enough to encourage them to think about your offer.
You can also update their segmentation if necessary to ensure they start receiving more relevant information.
5. Offer a free trial or demo
Even if you’ve said all the right things and nurtured your customers exactly as you should, sometimes it’s best to let your clients try out a new or upgraded service through a free trial. Once they can understand how beneficial your service can be, it’s often difficult to say no.
In fact, a recent survey by Recurly found that about two-thirds of B2B subscriptions that started as a free trial converted to a paid service.
It’s important that you stay in touch with your customers while they’re still in the trial phase to answer questions or provide additional insight about your services. B2B customers who are contacted by a sales rep during their free trial were 70% more likely to convert than those users who were not contacted.
You don’t need to close a major deal with an enterprise brand for your company to be successful. You can focus on your existing customers and benefit from mid-market sales. Even if your clients are hesitant to upgrade, you can encourage them by using one of the following tactics:
- Focus your marketing efforts on their pain points and how your upgraded service can make their lives easier
- Hyper-segment your efforts based on business size and specific needs so you can create more personalized communications
- Create automated email drip campaigns to reach your specific segments at specific times based on behavior to generate more qualified leads
- Let your customers test your product or service for a free trial or demo
Add these tactics to your retention marketing plan, and you’ll begin to see your mid-market sales increase.
Are you ready to effectively use email to nurture your leads and generate more mid-market sales? Sign up for free and try our email platform today.