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Moving Upmarket: Q&A with SalesLoft's Sean Murray


Nearly every SaaS company eventually tries to move upmarket, shifting from selling to smaller businesses to the Fortune 500. The allure of larger contracts and marquee logos for a landing page is often too much to resist.

This process is far more difficult than it looks. Between convoluted decision-making processes, dozens of stakeholders, and thorny implementation requirements, even the most adept sales team can trip and fall trying to sell into large businesses.

We sat down with Sean Murray, CRO at Salesloft, a sales engagement platform that helps teams set and execute on a cadence of phone, email, and social communications to convert targets into customers, to talk about exactly how to get it right.

Since joining Salesloft, he’s doubled their ACV, bookings, and number of employees – all in twelve months. Previously, he helped take Xactly public and led several sales segments for CEB, which was acquired by Gartner.

Q: Help me set the stakes. What does failure look like when moving up market?

A difficult milestone to accomplish in SaaS: hitting $5M net ARR. Many which survive >$5M do so by selling to their contacts and people in their network, banking on social capital they’ve built up over the years to persuade prospects into buying their product.

Failure moving up-market is straightforward: your business may plateau in the short term… and eventually drive away the team that built them grow in the first place.  Grow, or else.

Startup employees are typically attracted to grassroots organizations that grow and scale quickly. Big risk takers, dreamers, and border-line daredevils.  If you lose that growth, you risk losing your employees. As you grow, a different employee gets attracted to your company (read: established logo, bigger marketing, less buggy products, etc).  Your entire employee value prop then shifts drastically, or at least it should.

Q: When’s the right time to move up-market?

SaaS startups should begin to move upmarket around $10M in annual recurring revenue (assumes value prop/use case is applicable).

There are obvious caveats – a single customer with an $8M contract will push this number higher – but the overwhelming majority of companies that can hit $10M have found significant enough traction to scale and grow when pushing the right levers.

Q: How do you define success for moving upmarket? What’s a win?

My favorite metric beyond the obvious such as the big scoreboard or churn is Customer Acquisition Costs (CAC) sales efficiency, calculated by taking gross bookings and dividing by sales and marketing spend. Put simply the ratio of money coming into your business v S+M spend going out.

Aim for over 100% sales efficiency, which means more money is flowing into your business than your direct S+M spend. You’ll never be perfect, and there will be times where your sales efficiency will healthily drop below 100% – large brand campaigns or events – but always keep that metric top of mind.

Most metrics will vary for every business, but I’ve historically looked at three other metrics:

  • Churn

    Aim for at least 85%+ renewals on a per company basis. If this drops below 85%, dig deep with your customer service and renewal teams to understand why companies are quitting your product.

  • Net retention

    Aim for 110%+ on a gross revenue basis. Your customers should not only be sticking with your product, but purchasing more of it. The customers who double down on your product should grow quicker than the losses from churned companies.

  • Adoption

    I’ve found high Usability scores have been most impactful at driving sales, or adoption rates. If your Usability score is low, spend time solving the problems that are driving down your rating. Your customers will thank you. End users tend to be new buyers. End users across many products are today’s new buyer, in my opinion.

Q: Who is the right sales team to move your product upmarket?

The easiest way to fail: not changing or growing your sales team. The superpowers required to sell to larger companies are often not the same required to build a business from scratch.

As you approach hiring salespeople, screen for candidates that have one of these six core competencies:

  • Commercial strategy

    They should have previous experience working with large businesses as a project manager, or at a minimum, clearly understand how big businesses make decisions.

  • Persuasion

    As you move between markets, industries, and geographies, they’ll need the uncanny ability to sell to people that don’t necessarily think like they do.

  • Negotiation

    As your ACVs increase, so will the complexity of your contracts. They should be adept at managing expectations and finding mutually-beneficial solutions to problems or disagreements.

  • A drive for results

    Big companies are slow – they should have an unnatural drive for urgency, which translates into faster sales cycles and more closed deals.

  • Problem solving

    Every company is unique, with their own set of challenges to overcome before they’ll agree to even trial your product. Look for salespeople who can think on their feet and approach business problems creatively.

Q: Outside of sales, who do you need to hire? What needs to change?

There are a number of internal changes that I’ve seen succeed. This is not an exhaustive list, but rather a jumping off point for your own internal reorganization:

  • Scale your product & engineering teams

    Look to spend 35% or more of total sales on R&D. The best cadence I’ve used is built around alternating quarters: one quarter focused on reliability, bug fixes, stability, and speed; one quarter on new big features, innovative products, or risky bets that might not pay off.

  • Customer & prospect interviews

    Your product team should ask to interview both current customers & prospects that chose a different product. People are typically open to it – it’s not uncommon that 20%-30% of failed prospects will be willing to spend time with a PM walking through their issues with the product.

  • Hire a Chief Security Officer

    Your customer’s data is more important than ever. GDPR and SOC2 compliance is table stakes – you need a team dedicated to proactively protecting personal data and building a sustainable foundation for your product.

  • Hire a Head of Revenue Ops

    Look for someone who can find the story inside your sales data. Focus on someone who can deliver insights to the company at large, not just calculate the optimal compensation for sales reps.

Q: What other advice do you have for teams moving upmarket?

The only way to fail is not to recognize the need for change. Everybody wants to grow and scale their business, but not every team is braced for the inevitable mistakes and failures that will come with it.

Focus on your people. Your sales infrastructure and product will likely scale easily – it’s the people that will need to change the most. Work closely and honestly with your teams to find a place for every person to thrive. After all, companies succeed because of the people.