It’s not a coincidence that sales are often compared to hunting. In both cases, to triumph, you have to study your target and understand it. Furthermore, you can’t successfully approach a deer (small and medium-sized enterprises) with the same tactics that you would use on a rabbit (small and medium-sized businesses) or an elephant (large enterprise). However, what the hunting analogy leaves out is why mid-market sales are the toughest to master, and what’s the key to efficiency.
In this article, we’ll be offering a comprehensive guide that will equip you with everything you need to know about the mid-market and how to optimize your sales process to perfection.
Read on to find out!
Introduction to the Mid-Market
The first step to successfully conquering the mid-market is understanding the business profile of the companies that occupy it.
What Is a Mid-Market Business?
Small and medium-sized enterprises (SME), also known as midsize enterprises (MSE), are commonly referred to as mid-market. They are companies that are beyond the small and medium businesses (SMB) phase but are not large enough to be called a large enterprise (LE) and make it into Fortune 500 or Forbes 2000.
There are different ways to define what profile a company should fit to match the description, but the most common one is to asseсs employee size and revenue.
According to Gartner, to be an SME, a business should have annual revenue of between $50 million and $1 billion and/or between 100 and 1000 employees.
What Makes Mid-Market Sales Different?
What makes mid-market sales so complicated is that a company has to follow methodologies that are flexible in order to meet the varying needs of its audience. While SMBs and enterprises each follow relatively straightforward sales processes and may easily fit an aggregated profile, in SMEs you don’t get a one size fits all.
SMEs in the lower-revenue range have completely different needs compared to those in the upper tiers. In addition, depending on the industry, the differences become even deeper.
To be able to successfully approach the mid-market and do business there, companies should be constantly building individual strategies, conducting market research, and be ready to make adjustments in real-time.
Are Mid-Market Sales Worth the Hassle?
Mid-market customers are the golden mean in business. They are more salient than small businesses and have larger budgets. At the same time, they are more approachable than enterprises and have a simpler purchasing process, which makes it easier to seal a deal.
Although, when you get down to it, doing business with this B2B market segment may seem like a lot of work, but it is worth it.
According to Harvard Business Review:
“While the middle market represents barely 3% of all U.S. businesses, it’s responsible for roughly one-third of private-sector GDP and employment. If it were its own country, it would be the fifth-largest economy in the world!”
In other words, figuring out mid-market sales can be a profitable endeavor, presenting companies with great partnership opportunities, and recurring revenue.
Mid-Market Vs. Enterprise
One of the main issues regarding working with mid-market customers is that they leave the impression of being similar to large enterprises. However, they actually are a stand-alone type of business with different needs and sales cycles.
Companies that understand and leverage the differences are usually the ones that are able to capitalize on the mid-market and build lasting partnerships with their SME clients.
Common Mistakes to Avoid
To succeed in business, organizations usually choose to target one market as their main audience. This allows them to build a consistent strategy, group their customer profiles, and improve efficiency and productivity.
A common mistake for startups and new entrepreneurs is to target the mid-market as a practice for taking on large enterprises. They take it for granted that SMEs are just small-scale enterprises and consider that they can work out a strategy that works for the small fish and scale it up once they’ve gathered enough experience.
However, as mentioned, the two segments have different needs and sales processes and this makes a potential transition needlessly complicated. It also creates the risk of approaching the market the wrong way and failing to design an efficient strategy. As a result, businesses that target SMEs for the wrong reasons may constrain their own growth and, in the end, be unable to sell to both markets.
Advantages of Mid-Market Over Enterprises
The key advantage of mid-market sales is that, if done properly, they can be as profitable as enterprise ones:
- More Opportunities. There is a limited number of large enterprises and considerably more SMEs. This provides you with access to more potential clients and also enables you to gather more data to improve your strategies.
- Quicker Transactions. The sales cycles of SMEs are faster and easier to manage. There are fewer decision-makers involved and less time-consuming processes.
- Easier to Work With. The workflow of SMEs is more adaptive. With a smaller number of employees and simpler processes to facilitate, the solutions and services they require don’t need to be as complicated.
There is no denying it, working with a Fortune 500 company or a Forbes 2000 can be a major reputation boost and attract even more high-end clients. However, a long list of happy loyal customers is just as good for your image as a short resume of big names. After all, building revenue and experience, and growing your company are what keep you in business and make you relevant.
Furthermore, research shows that the sales velocity of SME deals makes up for the smaller profit. In other words, you are able to close more sales in a shorter time and achieve the same results with less hassle.
How to Master Mid-Market Sales
The mid-market is a diverse audience, and how you approach it and with what success depends on many additional factors.
Here’s an efficient strategy on how to improve the mid-market sales process:
1. Segment Your Target Audience
The key to working with SMEs is not to put them on par. In the mid-market, you have a market, within a market, within a market. Utilizing granular audience segmentation enables you to create comprehensive buyer personas and design personalized marketing messages that resonate with each profile.
Some segmentation criteria to consider are:
- Location, etc.
Once you define the cohorts, you can delve even deeper and create relevant sub-groups in every segment that match your business objectives. This will provide a better overview of the mid-market potential, and may help you identify the needs of different types of companies.
The more work you put into segmentation, the better results your sales team should be able to achieve. A granular approach equips you to create sales call scripts that are convincing, hit all the right buttons, and have all the right answers. However, what’s more, important is that by knowing the customers well, you are able to address their needs in the best way possible and provide tailor-made solutions.
2. Focus on High-Quality Lead Generation
Proper segmentation also enables high-quality lead generation. If marketing manages to attract the right kind of prospects, nurtures them properly, and provides all the necessary details to sales, reps are more likely to make a proposition that matches the target’s needs.
Poor lead generation stalls the mid-market sales process by wasting salespeople’s time and efforts, decreasing productivity, and hurting efficiency.
A good example of a prominent lead-gen strategy that may bring sales-ready mid-market leads is account-based marketing. It’s a risky and expensive approach, often considered more suitable for targeting large enterprises. However, mid-sized companies with high solvency are also worth the hassle and may deliver substantial ROI.
In addition, account-based allows you to target a large number of organizations that fit the same profile. Companies are able to address leads according to their needs, the specifics of the industry, and the type of business. Furthermore, since it is a highly-personalized strategy, it offers prominent conversion rates.
3. Design Solutions with SMEs in Mind
As mentioned, with fewer employees and fewer clients than large enterprises, SMEs need simpler and more intuitive solutions. However, unlike SMBs, out-of-the-box products are rarely a fit for the market. In a nutshell, products created for SMEs should be both easy to use and customizable.
When working with LE, companies usually have to design the product to resonate with the client’s workflow and usage requirements. However, mid-market companies have smaller departments and simpler processes, which means that the client is more likely to adapt to the product, not the other way around.
In addition, communication with small-scale clients is usually easier, less formal, and more productive and this makes it a product development asset. Companies can obtain valuable feedback, and improve their solutions based on the input from multiple customers. Thus, they can adapt them better to suit the market’s needs and improve how they are marketed and sold to future leads.
4. Shorten the Sales Cycles
The mid-market sales cycles are slower and more complicated than those of SMBs, but much simpler than those of enterprises.
There are usually a few decision-makers involved and negotiations are made in-house, instead of via a third-party intermediary. However, the purchases are rarely impulse-driven and it may take months to finalize them. With proper preliminary work, this time can be recused and the process optimized.
The stages of a sales cycle are the following:
- Handle objections.
- Close the deal.
- Close the sales cycle.
The more the company knows about the client and the better it understands their needs, the less friction there is at every stage of the cycle and the simpler it becomes.
5. Offer Various Flexible Contract Types
As the mid-market is diverse in nature, companies should offer different partnership opportunities that respond to the needs of their customers.
For example, smaller SMEs may require transactional interactions as they are prone to make single purchases, instead of signing off on long-term contracts. Larger SMEs, on the other hand, might be more eligible for longer partnerships, because they have more complex needs and require continuous attention.
If you are to succeed in mid-market sales, you should be flexible and design a variety of plans, tiers, and business models to fit the requirements of all the cohorts in your audience.
6. Don’t Underestimate Talent Acquisition
Talent acquisition in sales is a complex endeavor. A good rep is hard to find and may easily be worth their weight in gold – especially in the mid-market.
Similar to startup businesses, many reps strive towards enterprise positions where they can build a connection to the customer and sell through sentiment. In addition, working with large businesses is more challenging, and a better addition to their résumés.
That’s why mid-market sales positions are often looked down upon by experienced salespeople and are not considered an environment where they could thrive. Those reps may consider their talents wasted on lower-tier clients and not give their best in terms of effort and productivity.
However, driven and ambitious new recruits who are eager to prove themselves and build experience are different types of sellers. They are more likely to treat SME accounts with the respect and attention they deserve and put in the extra work to reach the full potential of every deal. This makes them a perfect fit for the job, and an essential ingredient of mid-market sales success.
Mid-market sales may be a tough cookie to crack but the effort is worth it. By figuring out the specifics of this business segment and understanding their needs, companies may grow their network of clients with loyal and notable partners.
The key to working with SMEs is not to put them on par with enterprises or SMBs, but to treat them as a separate business type.
Granular customer segmentation, attention to detail, and respect to the client’s needs provide companies with a strategic advantage and equip them to succeed.