Enterprise vs. SME Sales: What’s the Difference?

May 19, 2021    Comment off

Selling isn’t always the same. It’s different by sector, by geography, by job role and title, and by company size. The strategy should be different and the process will almost certainly be different. For example, Enterprise sales differ vastly from SME sales. The problem is, too many businesses don’t identify the differences and adopt the same sales processes and principles for all companies.

Why is Enterprise sales different to SME sales?

Essentially, Enterprise sales is the selling of large contracts/services. These sales typically have multiple decision-makers involved, take a lot longer to close, involve greater amounts of money and have higher levels of risk.

The bigger the prospect company, the more people will likely be involved in the buying process and the more complex the sales cycle. However, the more valuable the deal. Enterprise sales are harder to come by, require more work to close, but yield significant results. From a selling point of view, these deals require more touchpoints, more support from Marketing and sales enablement material, and require a longer-term strategy.

Defining business size

‘Enterprise and ‘SME’ means different things to different businesses. A lot of it depends on the average deal size you sell. For smaller average deals, Enterprise could be any company over 50 employees, but typically you’d class Enterprise as being at least 100 employees in size. Alternatively, you could define businesses by their revenue, or both revenue and the amount of employees.

An example SME breakdown could be:

  • Small – under 50 employees, revenue less than £20 million
  • Medium – 50 to 250 employees, revenue between £20 million and £50 million

And then Enterprise as:

  • Enterprise – over 250 employees, revenue above £50 million

These numbers will be based on your target audience.

The key differences between SME sales and Enterprise sales

Once those definitions are in place, there are some key differences to take into account when thinking about the sales process and a sales strategy.

1 – The length of the sales cycle: The bigger the deal, the longer the sales cycle. Enterprise sales can take months, if not a year, in the making, while many SME deals are quick turnarounds, where you get straight to the one or two decision-makers. Some smaller deals could also be ‘self-service’ deals, where the customer dictates the pace of the deal in a transactional sense.

2 – The number of people involved in the process: The bigger the company, the more decision-makers will be required in the process and the more opinions you’ll need to take on board.

3 – The type of purchase: SME prospects are likely to self-service buy, while a proper purchase order is normally required for bigger deals. SMEs are also more likely to be impulsive and make purchases there and then, while more thought and deliberation typically goes into bigger deals.

4 – Prospect pains: At the Enterprise level, much of the company’s pains are based on longer-term needs. At SME-level the pains are more immediate, in the here and now.

5 – Lead generation: In bigger companies, there are more job roles and personas within to target to generate opportunities, however, the senior people are harder to get hold of. They can also require a lot of sales grooming before the opportunity progresses to the sales pipeline. In SME businesses, there are fewer people to target and you are more likely to be able to get in front of senior people within the business.

Regardless of the above, you should be focusing your selling on where your value proposition fits the best. If your product or service is more suited to smaller firms, make sure your SME sales strategy is on point. If you’ve got a higher value product or service that fits more in line with bigger companies, an Enterprise sales strategy is needed. If you want to target both, then two strategies should be created to meet the different activities and processes required. Keep in mind that if you target Enterprise companies you will almost certainly have fewer deals on the pipeline, but the value of those deals is higher. That means more risk because if one deal drops, then it has a more significant impact on your forecast and targets.

Lastly, educate your sales team on the differences between the two. How they sell to an Enterprise business should be different to how they sell to an SME. Unfortunately, it’s not a one-size-fits-all approach.