Every SaaS scaleup dreams of landing big enterprise customers. The allure of signing multi-year, six-figure deals is hard to resist. But moving upmarket from selling to SMBs to the enterprise is a leap that requires more than just ambition.
Before you make that leap, there are some critical questions you need to ask yourself. These aren’t just boxes to tick; they’re the reality checks that could save your company from wasted resources, failed experiments, and an uncertain future.
When you consider selling to enterprise customers, the first thing to ask is: Do we truly understand our Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM)?
Understanding TAM, SAM, and SOM isn’t just about the numbers. It’s about understanding where your product fits and who it truly serves best.
TAM (Total Addressable Market): This is the broadest possible universe of customers for your product. It’s the dream scenario where every potential customer in the world is using your product. But let’s be real—no one captures the entire TAM.
SAM (Serviceable Available Market): SAM narrows it down. It’s the segment of your TAM that you can actually target with your current product offering and sales channels.
SOM (Serviceable Obtainable Market): Finally, SOM is where the rubber meets the road. It’s the realistic portion of your SAM that you can capture, given your resources, competition, and market conditions.
Before jumping into a new market, make sure your team has a tight grip on these numbers. If you haven’t done this analysis or if you’re uncertain about it, hold off on that enterprise push.
You might find that your SOM within SMBs is far from tapped out, meaning there’s still a lot of value to capture where you are now. Or, conversely, you might discover that the leap to enterprise could open up a significant and attainable new market. But you won’t know until you do the math.
Before you start looking for greener pastures, ask yourself: Have we truly exhausted our current target market?
It’s easy to get tempted by the idea of a bigger, more lucrative customer base. But before you chase that, you need to make sure you’ve squeezed all the juice out of your existing market.
Look at your customer base. Are you serving as many SMBs as possible? Have you saturated your niche? If not, there might be more value in doubling down on what’s already working rather than trying to break into a whole new market.
Consider the cost of acquiring a new enterprise customer. It’s significantly higher than acquiring an SMB. The sales cycles are longer, the decision-makers are more numerous, and the demands are more complex. If your SMB market still has room to grow, you might find that it’s more cost-effective—and profitable—to keep focusing there.
However, if you truly believe you’ve saturated your market, and there’s no more room to grow, then it might be time to look at new opportunities. But do this only after confirming that you’ve really maxed out your current customer base.
Moving upmarket often seems like the right move when things aren’t going perfectly. But ask yourself: Is our existing GTM function working as it should, or is something broken that needs fixing?
If you’re struggling with your current market, moving to a new one won’t solve those problems. In fact, it’ll likely make them worse. Enterprise customers are more demanding. They’ll want customized solutions, dedicated support, and they’ll scrutinize every part of your process.
Before making a move, audit your current GTM strategy. Are there inefficiencies in your sales process? Is your customer support scalable? Are your marketing channels optimized? If you’re seeing gaps in these areas, focus on fixing them before you think about adding more complexity by entering a new market.
It’s far better to have a solid, well-oiled machine that you can scale up than to drag existing problems into a new, more challenging environment.
Finally, the most important question: Are we sure that moving into a new market will deliver positive ROI and leverage the investments we’ve already made?
Entering the enterprise market isn’t just about scaling up your product—it’s about scaling up every aspect of your business. This includes your sales team, your marketing efforts, your customer success initiatives, and your support infrastructure.
Ask yourself:
Can our current product meet the needs of enterprise customers without significant rework? If not, are we ready to invest in those changes?
Do we have the sales team needed to close enterprise deals? Enterprise sales often require dedicated account managers, longer sales cycles, and complex negotiations.
Will our existing investments in marketing and support scale to meet the demands of larger customers? If you’ve invested heavily in inbound marketing and automation for SMBs, will that translate to enterprise sales, or will you need to start from scratch?
Do we have the budget to sustain a longer runway before seeing returns? Enterprise sales cycles can be months or even years long. Make sure your cash flow can handle the wait.
If the answers to these questions don’t inspire confidence, it might be wise to hold off on the enterprise move.
Switching markets, changing personas, and targeting new customers is hard. It’s unpredictable. And yes, it’s expensive.
So before you start ditching your existing customers for a new, shinier target, take a moment to triple-check your reasoning. Have you truly exhausted your current market? Are you absolutely sure that this new market is worth the investment?
Because sometimes, the easiest and most profitable path forward is right in front of you—selling more of what you already have to the customers who already need it.
Scaling up doesn’t always mean going after bigger fish. Sometimes, it just means fishing smarter in the pond you’re already in.