How to unlock more sales: our take on high-growth sales models.

April 22, 2022

Choosing a specific sales model will shape your overall approach to selling, your marketing strategy and the people you need in your team. The products and services you sell, the industry you operate in, and your revenue targets, will all impact the model or blend of models you choose to drive revenue. It’s not a quick decision and often requires testing, because it is often crucial to how the rest of the business operates as it determines how other pieces of your strategy will work together to achieve collective goals and grow the business.

So choosing the right model or models is fundamental.

For businesses to succeed in 2022 and beyond, you need to focus on the customer across every area of the business - pre, during and post sale. That’s why it’s essential to understand which sales model enables you to meet your individual customer needs, to drive growth and sales.

In this article, we’ll look at some of the different sales models and how they can drive business growth – honing in on the benefits, and pros and cons of each – so that you can choose the right model for your business.

Popular GTM (go-to-market) sales models for startups. 

In this article we will look at three common sales models: 

  • Bottom-up (selling to end-users, rather than C-suite execs)
  • Channel partnerships/ reselling (selling via intermediaries/partners who sell your product to the consumer)
  • D2C  (selling direct to consumer) 

First up, the bottom-up approach.

1. Bottom-up approach

[Ideal for] Businesses with a product or service used by multiple people in a company, such as collaboration tools like Salesforce and Adobe. The key with this approach is to grow the number of users within a specific organisation on a free trial, building ‘critica mass’. This way, there will come a point when the organisation will benefit from upgrading to an enterprise package to have a company-wide view, and stop siloed technology stacks within their teams.  

It’s also a really powerful approach, because it will be easier to demonstrate to decision-makers that there is a need for your product within their company, as several people are already using it and benefiting from it. 

For example, Dropbox appeals to anyone that needs cloud storage, but needs to be escalated to a decision-maker to upgrade to a paid business account - and for it to be rolled out across an organisation. 

Building a number of advocates within a business helps with the overall objective of landing a business-wide contract. This is why it's termed ‘bottom-up’.

While most businesses focus on one sales model, there are times when a hybrid approach is beneficial to increase sales revenue. In fact, it’s becoming increasingly common to introduce top-down sales in conjunction with a bottom-up approach. The key is to know when to add top-down sales to help boost your growth.

The pros.

  • Spend less on attracting decision makers - You often need to pay a premium to get in front of decision-makers. However, with a bottom-up approach, you can build an army of users that likely will help advocate your product - from the ‘bottom-up’. This makes the conversion to an enterprise account, via a decision-maker, much easier.
  • Easier adoption for the day-to-day users - Often, when your product has features like a free trial where users don’t have to pay for anything upfront,  it’s easier to increase the volume of users. The sales effort can then go into converting accounts with critical mass (an abundance of users from one organisation) to an enterprise level, paid account - where the business would benefit from additional features.
  • Brand building - Satisfied colleagues will tell their peers about your product and service - word of mouth promotion is very important. A compelling story such as reviews will help with repeat and new customers. 
  • Abundance of scope for in-app upselling - You can have restricted features that users need to upgrade to enterprise or business level to gain access to. In some apps, you can even manage it so the request goes straight to the user’s manager so that they can see the need.

The cons.

  • It takes a long time - The sales cycle is long and you need to build a ‘critical mass’ of users, which requires savvy B2B marketing. Marketing strategies require bespoke messaging and channels, which are essential to building a rapport with each target audience and persona to then land the big deals. 
  • Sales conversion challenges - If you offer free options with your solution, you may struggle to convert customers into paying ones. You will have people who are happy to ‘make do’ on a free version.
  • Multiple personas and buyers - Targeting B2B often means you need to target multiple personas and buyers, such as IT, procurement, and the C-Suite. This makes sales and marketing much more complex. 
Bottom-up: Success story
Gravity Sketch is one of the fastest-growing start-ups providing designers with a tool to quickly and easily create in 3D.  
Since the beginning of their journey, users have been at the centre of their strategy, which is why they adopted a bottom-up approach. This paid off when their users started sharing online how much Gravity Sketch allowed them to work in ways they never thought possible, which helped build traction for the platform.
Gravity Sketch’s co-founder and CXO Daniela Paredes added that the key to a successful bottom-up approach is to truly care and listen to the users. “Identify what it is that your users are looking to achieve individually and strengthen your efforts to solve that for them as much as you would try to solve it for your biggest customer, then figure out how the same product can have an impact at a larger scale and hone in on that.”. 
Find out more about Gravity Sketch’s journey here, and head to their website to learn more about their innovative platform.

How does a bottom-up sales model compare to a top-down model? 

Conversely, a top-down approach targets C-suite level contacts directly.  But this top-down focus on hard-to-reach clients is a risky one.

There are a lot of challenges to consider for the top-down approach:

  • Tough to get cut-through - Targeting the C-suite is tricky due to them being hyper-busy and less involved with the challenges suffered by the end-users further down the company hierarchy. Because of this, messages don’t resonate as strongly. In fact, according to Sopro’s 2022 State of Prospecting Report, The Head of IT is the hardest to reach job title, with the lowest open rates, lead rates and response rates. That’s why you really need an army of highly engaged users in an organisation to help influence the enterprise sale at the top. 
  • Onboarding teams can be long and painful - Onboarding new users from a top-down sales approach can be long and painful. If a decision is made about a type of software or platform, which then needs to be rolled out to multiple team members who’ve not been involved with that process, disengagement can be a risk. It's important to combat this by making the onboarding process as engaging and interesting (and smooth) as possible.
  • Long sales cycles - There are lots of stakeholders who you need to get buy-in from, such as the Department Head, Finance, and sometimes procurement too. This can take months. 

While most businesses focus on one sales model, there are times when a hybrid approach is beneficial to increase sales revenue. In fact, it’s becoming increasingly common to introduce top-down sales in conjunction with a bottom-up approach. The key is to know when to add top-down sales to help boost your growth. 

2. Channel partner selling and reselling. 

[Ideal for] Industries that don’t have the experience, infrastructure or willingness to manage the wholesale and retail of products. For example manufacturers, like beauty products, clothing, or fast-moving consumer goods (FMCG), that want to specifically focus on production.

With a B2B2C approach, your product or service is distributed to the end-consumer via a reseller, channel partner, or marketplace, such as Amazon.

The pros.

  • Competitor insights - Your partner/reseller will be able to give feedback on how your product/service is perceived in comparison to competitors – this gives you an opportunity to embed feedback. 
  • Customer and product insights - The partner/reseller may also be able to capture key customer insights that they can share with you. In addition to the customer insights, you can often also get a wealth of more general insights to fine-tune your selling strategies – such as which products are sold the most, what sold least, slow-moving products, and even what your sales will look like in the future.
  • Incentivised sales - Partners/resellers can be incentivised to achieve certain goals, which helps you to achieve your sales targets.
  • Access to qualified leads - The partner/reseller will do their own marketing to sell your products and services. Most likely, they will have a database of your target customers ready to sell to.
  • Reduced overheads - You can avoid the hefty costs associated with a startup by using an established partner/reseller.
  • Big brand credibility - You may also get better results from the partner/reseller as their brand is likely well known. This is ideal for startups that don’t yet have this brand trust.
  • Improved product visibility - You have the opportunity to gain far greater product visibility through your partner or resellers' platform. For example, product-based businesses can leverage Amazon’s huge customer base that it would never be able to get in front of alone. 

The cons.

  • Loss of sole control - If you sell via a reseller or channel partner, you don’t have control over the relationship with the end customer. This means, to influence sales, you need to influence and support all distribution partners, which takes significant effort and there’s no way of knowing for sure if it's implemented.
  • Loss of insight - You may not get the customer insight from the reseller/channel partner, which is a huge missed opportunity for growth – or worse, to prevent failure.
  • Hiring specialists - For this relationship to work, you are likely to require specialists that know how to best manage intermediary relationships, such as Partner Sales, Partner marketing managers, and partner relationship managers. This will cost you in terms of recruitment and new employees.
  • Renting your audience - Instead of owning a direct relationship with your audience (like in a D2C model), you’re essentially renting someone else's audience. This makes it much harder to build a direct relationship for repeat purchases.

3. D2C

[Ideal for] Businesses that can build an affinity with their brand – like consumer electronics, luxury goods and fashion - with a really strong product. 

If negotiating with an intermediary through a B2B2C doesn't appeal, you can of course sell directly to consumers. In fact, some businesses include an element of e-commerce/online shop in their website – and market this directly. For example, Nike used to sell its goods wholesale to Amazon, but having moved solely to D2C, their direct e-commerce sales jumped to 30% of Nike’s sales.

The pros.

  • Maintain control (including customer insights) - By selling directly to the consumer, you maintain control over how your product/service is sold and the customer experience. Crucially, you can quickly capture any insights to adapt to satisfy customers and grow your business.
  • Build a direct relationship with customers - It allows you to directly interact with end customers, which helps with building awareness and advocacy of your brand. This is particularly relevant for Gen Z who prefer brands with values that align with their own.
  • Ease of browsing the entire product range - Unlike what happens with a B2B2C approach, where the consumer is often presented with solutions from your competitors, you can create complete online catalogues for your products, enabling cross-selling, and offer your own alternatives when you are out of stock of one item.
  • Higher profit margins - If managed successfully, cutting out the intermediary could mean greater profits.
  • Higher chance of repeat purchases - By directly owning the relationship with your customers, you have the opportunity to build a relationship to improve retention, cross-sales, and up-sales. 

The cons.

  • New infrastructure and expertise - When either starting, switching to, or adding a D2C approach, you need internal teams set up to manage this. This may mean recruiting new digital specialists and running training – and new systems and processes will need setting up. Like an e-commerce platform.
  • Highly competitive - Direct to consumer is incredibly competitive and for marketing will require a significant budget.
  • Continual investment - To keep ahead of customer demands and competitors, you need to continue to invest in the latest technology to serve customers. If you don’t, it can create a bad brand reputation and dissatisfied customers. 
D2C: Success story
HIGHR is a sustainable beauty brand, founded by Molly Hart in 2019. For the last three years, Molly and the HIGHR team have focused on the D2C model sales model. Crafting their marketing efforts and maintaining a close relationship with their growing customer base, and learning from them. 
Molly added, “We've been able to use a consumer dialogue to tweak our pilot product along the way and get it to a place where we feel strongly enough to start approaching omnichannel retail in year two or three.” Read more about this in our Q&A with Molly here.
To find out more about HIGHR’s manifesto or to shop their range. Head to their website here.  

How to choose the right Go-to-Market (GTM) sales model

To help you choose the right sales model, you need to consider these key factors:

1) Identify and build your buyer personas.

Know who your buyers are, what their pain points are and how they want to buy, to tailor your sales and marketing approach.

2) Map out your buyer’s journey.

Take a look at how they interact with you throughout the sales cycle, how they engage with your resources and how long they spend on certain channels, like your website.

3) Refine your sales strategy.

Focus on your product, pricing, and current competition – how are they attracting new customers? How do you compete (e.g. price)? This will help you to choose the right model for sustained growth.

Once you’ve chosen your sales model, you can look at the tactics you need to use to generate sales.

🔎Bonus tip: Regularly review your sales model - The pandemic couldn’t have highlighted a bigger shift in consumer behaviour and how this impacted so many industries.
This is why you should review the impact of your sales model periodically to see if it's still fit for purpose, given the market, and whether it still enables you to meet your goals. And if not, where you can improve it – for example, by adopting a hybrid approach.
To measure success, you can assess whether your current sales model is bringing in the volume of leads you need, whether the quality is right and how well these sales convert. 

In summary

In sales, the customer is the priority. Every sale should enable them to solve a problem or achieve a goal. That’s why it's crucial to find a sales model that works for your customers, and you, to help build long-term growth.

Different sales models work for different businesses and so choosing the right one, or the right combination, is key for long term growth and aligning your team. Do it right and you can unlock new markets and new customer segments. Having a strong focus on a sales strategy, will align your team and 

Is your sales engine motoring?

If you’re an early-stage founder gaining traction in AI, e-comm or marketplaces, we’d love to hear from you. You can get in touch via our Offices Hours Programme here.

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April 22, 2022