During the first two years of the COVID-19 pandemic, the rapid increase in digital transformation fueled explosive growth in the enterprise tech sector. Companies of all sizes, eager to enable and accelerate their digital journeys, sought out subscription, as-a-service, and cloud-based products with unprecedented urgency. In 2020, the adoption rates of digital or digitally enabled products accelerated by seven years.1
Tech customers’ needs and expectations are rapidly evolving in the wake of this dramatic shift. As a result, a new enterprise go-to-market (GTM) playbook, one that disrupts traditional enterprise sales from both the top down and the bottom up, is emerging (see sidebar “The two major shifts in enterprise customers’ technology needs”).
B2B tech customers are demanding expertise above all else. While organizations once looked to tech sales teams for guidance when purchasing products and solutions, they now require more robust assistance in catalyzing and guiding their digital transformations. This is a far more sophisticated role for enterprise sales teams: it requires technical acumen, detailed industry knowledge, and integrated solutions to ensure that value is realized throughout the life cycle. Customers now prioritize expertise over elements such as having a single point of contact, and their buying decisions increasingly involve a wide range of stakeholders instead of just IT.
At the same time, customers are demanding simplicity and self-service experiences. Customers crave the simple, highly personalized, self-service experience that has come to characterize other forms of e-commerce, from groceries to clothing to used-car sales. In fact, more than 30 percent of B2B customers are already using digital and self-serve channels for each stage of the buying journey.2 The growth of simple-to-deploy, cloud-based solutions has paved the way for new buying models that make this experience possible.
Executing these two shifts simultaneously is a complex challenge. However, the rewards are substantial, as evidenced by the performance of several companies that have taken the lead in reimagining GTM.
Our analysis of 60 top-performing software-as-a-service companies reveals that top-quartile “efficient growers” are successfully extracting value at multiple junctures. They are effective at new-business acquisition (with more than 15 percent of growth coming from new customers), they retain and grow their install base (with net retention rates topping 125 percent), and they manage spending carefully to invest where it counts (keeping marketing and sales expenditures about or below 30 percent).
These metrics are based on the recent and unusual period of growth within the software sector. Moving forward, transforming GTM to drive retention and control costs will be even more critical.
Four critical pivots in enterprise GTM
Based on our analysis of top performers, our work with tech companies, and recent interviews with dozens of executives, we believe that four critical pivots are driving sustained success in this new era. Companies that fail to move boldly now, and that pour more resources into traditional sales only to see customer experience decline, are likely to struggle over the next three to five years. As market conditions shift and the imperative for efficient growth gains urgency, these failures will have more significant consequences.
Even top-tier tech companies tend to focus on either transformative selling or digital, product-led growth—but not both. In the future, it will be difficult to win in one without getting the other right. These two-part pivots are designed to weave expertise and simplicity into four functions: sales, marketing, channel, and customer success (see sidebar “The key moves that fuel industry outperformers’ success”).
Reimagine sales coverage from top to bottom
Expertise: From selling products to enabling transformations
As solutions become increasingly complex and multiyear digital transformation remains critical, traditional account managers and presales specialists will find themselves insufficiently equipped to meet enterprise customers’ needs. Before investing in a new solution, enterprise customers want best practices on how to solve their needs, insights on navigating architectural trade-offs, and evidence on how the solution will deliver value. They also demand ongoing guidance and collaboration to achieve outcomes.
To better develop this new type of relationship with potential customers, high-tech leaders are embracing transformation-led sales. Large enterprise sellers also serve as account strategists, with solution and industry knowledge as well as the leadership qualities to orchestrate cross-functional teams. Specialists must be able to approach large accounts with agility, by leveraging services and independent software vendor (ISV) partners to demonstrate the art of the possible. This new approach has profound implications for talent, capabilities, and account models. One leading hyperscaler is hiring former consulting partners and industry executives to manage its largest accounts, treating those accounts almost as stand-alone businesses.
For midsize-enterprise accounts, top performers are challenging the orthodoxy of traditional enterprise sales to deliver deep expertise in a cost-efficient manner. Leaders are replacing one-to-one account managers with specialist-led hybrid models. They are blending on-site and remote work, extending specialists’ reach to a greater number of customers. And they are equipping off-site team members with the winning inside-sales playbook, so they can access the marketing tools, solution plays, and data-driven insights to bring customers the right conversation at the right time. One leading software firm scaled its portfolio of 300-plus services by creating specialist-led teams aligned to either core or growth models as well as new versus expanded business. It supported this transition with tailored demand generation, aligned talent profiles, and restructured compensation. The new model is more effective and efficient than the traditional one, which has boosted productivity.
Simplicity: Digital and product-led disruption
At the same time, industry leaders eager to satisfy customers’ demand for simplicity are embracing product-led growth. This involves creating simple and scalable digital self-service buying experiences as well as products that are easy to try, procure, deploy, and use.
Atlassian’s product-led growth model has powered double-digit annual sales increases, at a 15 percent cost of sales, for more than a decade.3 Atlassian’s “flywheel” model is designed to ensure that products are “bought, not sold.” Rich content and appealing events make products easy to research, free trials and a straightforward buying process minimize the friction that buyers often associate with enterprise-grade products, and easy-to-use products result in delighted customers—who then become engines for growth.
Even vendors of complex solutions are borrowing tactics from the product-led playbook. Snowflake and CrowdStrike use a combination of free trials, demos, simple-to-deploy solutions, and user communities to generate demand and accelerate adoption among enterprise customers.
Make every marketer a seller and every seller a marketer
Expertise: Personalization in depth
Historically, B2B tech has taken a relay-race approach to customer engagement: marketers build awareness to generate leads and then pass the baton to sellers. As this bifurcated process becomes impractical, marketing departments will have to broaden their roles and work jointly with sales, channel, and customer success teams to establish and support full-funnel health.
In recent years, Oracle has moved away from a system prioritizing traditional marketing qualified leads, which had incentivized marketing departments to overinvest in low-value activities. Sales and marketing teams now work toward “conversation readiness,” which uses customer interaction data to evaluate intent. This generates fewer leads, but more deals are landed.
Getting personalization right involves “making every seller a marketer.” Leaders such as Snowflake use cross-functional pods and account-based marketing to support sellers with quality content that can be refined based on customer feedback. Other leaders enable sellers to send tailored emails with curated articles to those customers who have expressed interest in live calls.
Simplicity: Personalization at scale
Personalization also needs to scale. Top marketing and sales teams are using predictive AI, campaign automation tools, and best-in-class data infrastructure to more effectively target potential customers.
Companies using data-driven B2B sales-growth engines report above-market growth and 15 to 25 percent increases in earnings before interest, taxes, depreciation, and amortization (EBITDA).4 Among the most promising use cases is “intent analysis,” which uses “digital breadcrumbs,” such as press releases, financial disclosures, and geolocation data, to anticipate customer needs. Some companies use customers’ job postings to predict their priorities and pinpoint their location in the buying cycle.
Tech companies are “making every marketer a seller” by introducing self-serve tools and hybrid events to foster relationships with customers throughout their decision journeys. Examples include Google Cloud’s pricing calculator, Microsoft Azure’s total cost of ownership calculator, IBM’s hybrid cloud value calculator, and Amazon Web Services’ (AWS) migration evaluator.
Shift channel from scale to expertise
Expertise: Diversified partner ecosystems
With the rise of cloud, many predicted that direct digital models would render the channel obsolete. In fact, the channel is as important as ever, but thanks to a new crop of channel partners specializing in areas such as cybersecurity, cloud, and DevOps (software development and IT operations), it is evolving into a richer ecosystem valued less for its distribution scale than for its expertise in helping customers adopt new solutions and transform.
Leading companies are cultivating ecosystems of fewer partners, each with a differentiated value proposition, and changing partner incentivization models to prioritize customer success. They are also leveraging alliances and ISV partnerships to build ecosystems around their platforms. Finally, a new generation of providers is introducing cloud-managed service offerings to provide simplicity and outcomes for customers.
These new channel players go far beyond the role of traditional value-added resellers. They add value across the life cycle, from cocreation to co-selling to codelivery and sometimes to renewal and value realization. This remains true throughout tech ecosystems, including for cloud platforms and product-led models.
Simplicity: Growth of B2B marketplaces, agencies, and digital direct
Transactional business is quickly shifting toward digital channels, including B2B marketplaces and agency models. For many channel partners and distributors, this presents both an opportunity and a threat to current business models.
Transactional business is quickly shifting toward digital channels, presenting both an opportunity and a threat to current business models.
Hyperscale cloud marketplaces have grown at an accelerated pace in recent years and are projected to expand at a compound annual growth rate of nearly 30 percent through 2026 as more software companies leverage them.5 CrowdStrike credits its AWS partnership with removing friction from the sales process, helping drive 65 percent growth in annual recurring revenue in 2021.6
Embrace a life cycle approach to customer success
Expertise: Customer success as a critical growth engine
Leading companies increasingly recognize the pivotal role of customer success (CS) as a growth engine, particularly with the rise of subscription-based models.7 CS teams add value by helping customers unlock the solutions’ full potential, which builds trust and relevance with customers. However, leading CS teams go further, identifying untapped opportunities and providing sales teams with insights into companies’ needs. As a result, top companies are more closely aligning sales, marketing, and CS teams; bolstering CS with additional resources and technical talent; and breaking down old presales/postsales distinctions to foster collaboration across the customer life cycle.
As digital transformations increase the number and diversity of stakeholders involved in technology decisions, the urgency around CS is growing. A recent McKinsey CX survey indicates that as the number of stakeholders involved in technology purchase decisions rises, influencers are significantly less satisfied than buyers (exhibit). This gap persists across every dimension and journey stage, presenting an opportunity for vendors that engage with and bring value to a broader set of stakeholders throughout the life cycle. The survey also reflects that customers value strategic advisory as well as technical services throughout the life cycle.
To fund the expansion of CS, the best companies are offering subscription-based “paid success plans” that accelerate customer adoption and deliver high-quality experiences. These companies are developing new metrics to gauge the contributions of CS to revenue and reallocating sales resources to prioritize CS.
To fund the expansion of customer success, the best companies are offering subscription-based ‘paid success plans’ that accelerate customer adoption and deliver high-quality experiences.
Simplicity: Seamless, user-driven experiences
Given the premium that B2B buyers place on seamless, simple experiences, leading tech companies are taking a holistic approach to customer experience transformation by redesigning customer journeys to eliminate pain points and create satisfying experiences.
Salesforce actively manages against a small set of customer journeys, many hinging on digital and self-serve capabilities. The company provides simplified offerings that pair product solutions with success plans, rigorously monitors performance metrics around experience, and through “voice of the customer” research panels integrates customer perspectives into design decisions.
Four key drivers of reimagined GTM
To support this GTM evolution, tech companies should consider investing in four primary enablers.
- Insights. By further investing in data and analytics, companies can overhaul their approach to lead generation and segmentation to create customer “health models” that identify an account’s opportunities and risks and then trigger necessary actions across the GTM value chain. Top performers are investing in data architecture to develop insights about customers and partners. They leverage these new insights by creating “revenue operations” (RevOps) teams that combine sales, marketing, and customer success to create a holistic view of the customer.
- Tools. Our research shows that more than 30 percent of sellers’ time is spent on low-value activities that can be automated.8 Some leading vendors are addressing this inefficiency by introducing new sales and RevOps tools, an investment that is driving 20 percent annual growth in the sales enablement software market.9 However, for leading companies, more tools have seldom been the answer; instead, outperformers simplify workflows that incorporate these tools, emphasizing user design and consolidating tools and data sources to increase adoption at scale.
- Talent. Companies embracing the new enterprise GTM model need employees with skills such as industry expertise, CS, strategic advisory, and sales analytics. Leaders are prioritizing hiring industry talent and exploring other new-talent sources as well as doubling down on early-in-career programs; they are also redefining sales training by adopting modern capability-building and upskilling approaches. Finally, as workers prioritize innovation, culture, purpose, flexibility, and inclusion, leaders are also reexamining their talent proposition to appeal to attractive candidates.
- Agility. Shifting to cross-functional teams that can work together throughout customer journeys is a key ingredient for delivering on expertise and simplicity. This change involves new ways of working, shared metrics, and technology infrastructure that enables collaboration. Many companies are realigning their leadership structures to reduce the friction of collaboration; for example, a chief revenue officer oversees sales and marketing teams, while customer-facing functions such as CS, support, and services fall under a chief customer officer.
In this new era of accelerated digital disruption, tech companies need to rebuild their GTM models from the ground up. Leading players are innovating rapidly, but the shift remains in the early stages. Because two distinct forces—the demand for expertise and the demand for simplicity—are shaping the future of GTM, adapting to this new world is a complex undertaking. Companies that are bold enough to embrace the challenge now will position themselves to outperform in the long run.