What is Enterprise SaaS? Your Guide to Going Upmarket

Enterprise SaaS is a specialized tier of cloud-based software solutions designed explicitly for large organizations. Unlike standard SaaS offerings, enterprise-focused packages come equipped with an array of advanced functionalities engineered to meet the intricate and large-scale demands typical of enterprise operations.

So how do you move up the ladder to target these types of customers, and is it really worth the hassle?

This comprehensive guide aims to demystify the world of Enterprise SaaS. You’ll gain insights into why this market segment is crucial, how to adapt your business model and product for this audience, and what best practices to follow in your sales and marketing strategies.

Why Should SaaS Companies Target Enterprise Businesses

Many SaaS companies adopt the longtail targeting strategy because SMB buying cycles are shorter, with low friction conversions and lower customer acquisition costs. It’s an easy win. Admittedly, most of us love quick wins.

Also, there are a lot more SMBs than there are enterprise firms. So from a top-level view, it would make sense to pay attention to SMB customers.

There’s an obvious catch.

Research shows that 22% of small businesses fail in the first year, 32% in the first two years, and 50% within five years. To put it into perspective, if you focus on SMB businesses alone, chances are you’ll be losing almost a third of your customers every two years.

That puts you under constant pressure to generate new customers to continue growing.

Enterprise companies, on the other hand, boast higher survival rates. And, despite offering a smaller pool, they promise higher average revenue due to the number of seats. That means a significantly higher customer lifetime value. 

Key Considerations for the Enterprise SaaS Business Model

Enterprise SaaS is massive, dominating the forecasted $702 billion growth of the cloud app market. But before you think about taking a slice of that pie, there are a few things you need to consider.

1. Platform Expectations

Enterprise SaaS is a software solution that gives enterprise-level businesses a robust package with lots of customization options to meet their insanely high demands. 

Let’s use Slack as an example. 

Slack is a popular messaging app that has revolutionized the modern workspace. But like most SaaS brands, Slack understands that enterprise businesses have unique needs. 

For instance, they have higher security, collaboration, and customization expectations. As a result, they provide unique features to enterprise businesses.

Among others, they provide large-scale collaboration, higher security and compliance, custom terms of service, and so on. You can see how they differentiate this service by looking at the price comparisons.

It’s not just about the needs, though. 

Enterprise businesses cannot afford bad publicity. Can you imagine the headlines (and repercussions) if Microsoft was on the news because they used software that resulted in a massive data breach?

That’s why enterprise businesses have such high software security and privacy requirements. You’ll need to keep this at the top of your mind if you want to secure enterprise clientele. That brings us to the next question.

2. Customer Service Experience

Enterprise businesses don’t just pay premium prices for your product. They pay for a seamless experience. 

You need to provide a superior customer experience. That’s why SaaS brands like Zapier use dedicated support and enhanced security to differentiate enterprise products from lower-tiered plans.

You have to make peace with the demands of enterprise customers too. You’ll have to invest in account managers and significant product improvements to retain these customers.

3. Effective Marketing Channels 

Enterprise buying cycles are long (six or more months) and complex, involving costly investments, higher risks, and many stakeholders. 

You’re not only persuading them that your product is the solution they need; you must also convince them that your SaaS brand is the right fit for their business. That requires relationship building.

The most effective marketing channels for building relationships are events like SaaS conferences and ABM.

Content marketing does work, too. But thought-leadership SaaS content marketing is more effective than top-of-the-funnel definition terms.

A 2020 report by Endelman discovered that 88% of decision-makers found thought leadership to be an effective approach for enhancing a company’s perception.

Unfortunately, the same survey discovered only 17% of the thought leadership content they read was good or excellent. There’s clearly an issue here.

Take Writer as an example.

The company launched an effective enterprise SaaS SEO strategy to establish thought leadership in its niche. They did this by investing in generative AI guides.

The content they are producing helps decision-makers understand how companies are investing in AI for content marketing. It’s produced to educate prospects about the market, not generate an instant conversion.

4. Enterprise SaaS Churn Rate 

Enterprise customers tend to have lower churn rates than SMBs.

The graph below shows the churn rate declining as the account value increases.

Higher prices, lengthy contracts (enterprise firms tend to opt for annual subscriptions), and increased friction from switching products result in higher retention. 

But this doesn’t mean you should take it easy. When annual-based subscribers churn, the compounding effect hits your bottom line hard.

5. Enterprise SaaS Pricing

Are you looking at your competitors to price your SaaS product? If you are, you could be leaving money on the table. 

Your pricing strategy should be driven by value, but only 39% of SaaS companies do that.

Enterprise prices should reflect exclusivity to justify the premium tag – whether it’s more features (tiered pricing), more users (per-user pricing model), or higher limits (per-usage model). 

The objective is to center price points around the product’s perceived value.

Whatever model you choose, don’t forget to factor in your costs and customer behavior.

SaaS Enterprise Buying Cycle

When it comes to the enterprise sales cycle, don’t expect a sprint; it’s more of a marathon. Unlike sales in smaller B2B settings, the enterprise sales process is notably longer and more intricate.

The image below from Gartner provides a sense of just how complex the buying process can be.

The length of an enterprise buying cycle can vary widely depending on various factors, such as the industry, the complexity of the solution, the number of stakeholders involved, and the organization’s internal processes.

However, it’s generally accepted that enterprise buying cycles are significantly longer than those for small and mid-sized businesses (SMBs).

On average, an enterprise sales cycle can last anywhere from six months to over a year. Some particularly complex or high-stakes deals may even extend beyond that. Here’s why:

1. Multiple Stakeholders: In an enterprise setting, several people usually have a say in the purchasing decision—this is usually called the buying committee. Each stakeholder will want to assess how the product or service impacts their specific department, which can add time to the overall cycle.
2. Budget Approvals: Given the high costs typically associated with enterprise solutions, budget approvals often require several rounds of reviews and sign-offs.
3. Complex Needs: Enterprises often have complex requirements that may necessitate customized solutions. Tailoring a product to meet these specific needs takes time and prolongs the sales cycle.
4. Compliance and Security: Enterprises often operate in regulated industries, which means any new software or service must comply with a plethora of laws and regulations. This adds an extra layer of evaluation and time to the buying process.
5. Pilot Testing: Many enterprises require a pilot test of the solution before full-scale implementation. This phase allows them to assess the effectiveness and ROI of the solution, which again adds time.
6. Contract Negotiations: Enterprises usually require customized contracts and SLAs, which necessitate prolonged negotiation periods.
7. Integration and Implementation: Even after a contract is signed, the time to full implementation can be extensive as it often involves integrating the new solution with existing systems.
8. Seasonality and Fiscal Cycles: Finally, enterprises often align major purchases with their fiscal cycles, which can either speed up or slow down the sales cycle, depending on timing.

Understanding these factors can help you better plan and execute your sales strategy when targeting enterprise clients. Make sure to consider these aspects to set realistic timelines and manage both your team’s and your prospective client’s expectations effectively.

How to Target Enterprise Customers

So, how do you get the big catch? Two ways:

1. Create a Robust Go-To-Market Strategy

You won’t catch a whale by casting a wide net. You need a strategic plan of action to position and launch your product in the market. 

It should have the following:

• Ideal customer profile
• Clear value proposition
• Pricing strategy
• Outline of sales and marketing activities

Loom (previously Opentest) launched its video messaging app on Product Hunt, a community-driven platform where tech creators share and showcase their products. 

The community provided valuable insight into use cases and ways to innovate the product. 

But what if you already have a functional product and you’re simply looking to go upmarket and target enterprise businesses? 

The bad news for you is that this process is anything but easy. You’ll probably need to make significant changes to your product to fit the enterprise market. That’s in addition to implementing a hiring strategy that supports enterprise customer acquisition and retention.

Essentially, building out a new enterprise SaaS sales team and the customer support teams.

The whole process may require making some really tough decisions too. 

For example, Sujan Patel, the co-founder of Mailshake, ended up letting go of most of his marketing team, stopped investing in the SMB market, recruited an enterprise SaaS sales team, and made a bunch of other changes to move upmarket.

I recommend listening to the interview where he discussed his approach on YouTube.

2. Focus on Account-Based Marketing

SaaS ABM weeds out unqualified leads early in the sales and marketing process by identifying and targeting specific high-value customers.

Think of it as a VIP invitation. When event planners court the attendance of high-profile individuals, they ensure the event is relevant and beneficial to the VIP. 

The concept holds in SaaS marketing. Sales and marketing teams work together to deliver personalized messages that speak to these companies’ pain points and goals.

LiveRamp used ABM to drive $50M annual revenue from 15 accounts. The data enablement cloud platform sourced its targets from Fortune 500 companies with at least $50 million in annual revenues. 

They then deployed a multichannel outreach approach featuring display advertising, email marketing, and outbound sales calling.

3. Enterprise Negotiation Strategies

Navigating the labyrinth of contracts and Service Level Agreements (SLAs) is a crucial skill when closing deals with enterprise clients. Unlike smaller B2B contracts, enterprise agreements come with a unique set of demands and expectations that require careful attention and negotiation.

The first step in a successful negotiation is understanding your client’s key concerns. Is it uptime assurance, data security, or perhaps scalability?

Understanding the prospects’ concerns will help you tailor your SLA terms more effectively.

Flexibility is a strength in these negotiations. Being too rigid can send a prospective enterprise client to a competitor. Be prepared to offer customization in terms and conditions, payment schedules, or service provisions. However, know your own limits—don’t agree to terms that your service can’t fulfill or that jeopardize your business’s sustainability.

Transparency is crucial in establishing trust, especially for long-term relationships. Clearly lay out what your service can and cannot provide and be upfront about costs. If there are penalties for service downtimes or data breaches, specify them.

Trust is key in enterprise relationships, and it starts with an honest, clear-cut contract.

Adapting Enterprise SaaS Sales Strategies in 2024: Navigating Slower Deal Cycles and Increased Scrutiny

The enterprise sales game in 2024 is undoubtedly tough. Economic downturns coupled with a decline in SaaS spending create a double whammy. Enterprises are being fiscally conservative.

CMO of G2, Amanda Malko, reported that SaaS sellers report an 8% dip in average spend per product.

In this climate, your sales strategy needs to be agile, empathetic, and razor-sharp.

The first step is acknowledging the current realities your prospects face. Companies are not only auditing tech stacks but are also scrutinizing their entire tech spending, which represents around $30 billion annually. They’re evaluating enterprise SaaS pricing models, debating between consumption- or seat-based pricing.

Understanding enterprise SaaS customer’s usage patterns can give you an edge. Tailor your pricing models to offer value based on how they’ll actually use the software. While “ease of use” remains a priority, your product also needs to fit within the governance and compliance frameworks that enterprises operate in, which are only getting more stringent.

Your sales strategy should be tightly integrated with product development, focusing on features and pricing models that can be easily adopted from the bottom up within an organization. Make it clear how your product contributes to this efficiency without requiring a massive overhaul of their existing systems.

Avoiding customer churn is critical.

With average SaaS product spending on the decline, customer retention becomes your ace in the hole. Tap into their evolving needs in this conservative spending environment. Offer optimizations or add-ons that align with their newly tightened budgets and increased oversight.

Examples of Enterprise SaaS Solutions

We’ve compiled a list of enterprise SaaS market leaders and up-and-coming contenders to give you an idea of the features you should offer enterprise buyers.

Salesforce

Salesforce is a leading customer relationship management (CRM) tool. It helps businesses build strong connections with customers. Enterprise businesses get:

• Unlimited user roles
• Forecasting customization
• Workflow automation
• Web services API

The professional plan is marketed as a complete sales solution for any sized team. To up the ante, Salesforce makes customization the selling point of the enterprise plan.

Google Analytics 360

Google Analytics is a free tool for people who want to track web traffic and page performance. Analytics 360 is tailored to the needs of large enterprises with features such as:

• Machine learning automation
• Real-time reporting
• Integration with Google and partner solutions
• Access to dedicated support specialists

The big draw of the Analytics 360 product is advanced tools like unsampled reports, BigQuery, and data freshness that help enterprise teams get the most out of their vast and complex data.

Writer

Writer’s generative AI tools help marketers create SaaS inbound marketing assets faster and align them with brand guidelines. Enterprise users get these added features;

• Custom language training
• Different style guides for multiple teams
• Customized writing rules
• 24/7 phone, email, and video support

For businesses with multiple teams and content distribution, the enterprise plan provides additional controls to ensure consistent brand messaging across the board.

Ahrefs

Ahrefs offers one of the world’s leading SEO solutions, with tools for keyword research, link building, and competitor analysis. 

In addition to the features in the lower plans, enterprise teams get;

• Unlimited backlink history
• Access control management
• Listing on the company’s exclusive directory
• Payment options

Data is king, and Ahref’s enterprise users have access to more SEO data than competitors on other plans. This allows them to leverage the best keywords and backlinks, making it easier for brands to run effective enterprise SaaS SEO campaigns.

Atlassian

Atlassian’s collaborating software enables IT and business teams to deliver faster product deployment with intelligent, automated workflows. 

All Atlassian users have access to its suite of products. What sets the enterprise account apart is;

• Unlimited instances
• Technical account management
• 24/7 customer support
• Data residency controls.

The selling factor for enterprise accounts is the user experience, with features, functions, and content designed for scaling businesses.

What Distinguishes Enterprise SaaS Companies from B2B SaaS

The main difference between Enterprise SaaS and B2B SaaS is scale. Enterprise SaaS companies generate billions in revenue, use global supply chains, and have thousands of employees. 

So, while they have similar needs as B2B businesses, enterprises require dynamic solutions to manage massive workflows. 

Enterprise solutions are usually the most expensive option, requiring potential customers to contact the marketing team for a quote. The higher price tag covers integrations, features, and support not available in lower tiers.

Slack’s enterprise-level plan, for example, is designed to meet the needs of global companies with unlimited features, regulatory compliance, and 24/7 priority customer support.

Enterprise workflows are complex, requiring unique customizations with multiple software. Integrations build ecosystems with the apps enterprises already use. That creates value by simplifying workflows and increasing productivity.

The above graph shows that the number of SaaS apps a company uses grows with the number of employees. To attract Enterprise buyers, you must support as many integrations as possible.

Enterprise SaaS should be able to manage large-scale operations and provide the best-in-class features like intelligent automation and real-time analytics. 

And with a price tag in the thousands, the customer support must be nothing short of excellent. Think consultation and training services.

Enterprise SaaS FAQ

Wrapping Up

When businesses scale up, they turn to enterprise SaaS to meet their growing and complex needs. High-value products with higher limits, advanced reporting, and dedicated customer service are just some of the things large and scaling companies expect from enterprise SaaS providers.

Hopefully, this guide has opened your eyes to the vast opportunities that come with going upmarket. The long sales cycle and specific product requirements may seem daunting, but the reward is worth the effort. 

High revenue and low churn make enterprises great customers for stable, sustainable SaaS growth.