Summary:
Bottom Up Sales is a venture pattern where individual employees start using or buy a version of a product and when enough employees of a company do so, then the company buys it for many more employees or makes it an official tool.
Description and Background:
At SeeClickFix we were faced with the question, how should we go to market with a software platform for use by citizens, local governments and others? One of the techniques we tried was to allow any citizen to start using the software to report issues in the public space. If you saw a pothole or graffiti, you could report it online or via the mobile app and plug in an email address where you wanted that request sent.
The hope was that citizens acting in parallel could recognize and implement the power of new technology faster than our small team having education and sales conversations town by town.
Known as the Bottom Up Sales approach, this is a Venture Pattern where individual employees start using or buy a version of a product and when enough employees of a company do so, then the company buys it for many more employees or makes it an official tool.
At Higher One, we employed more of the traditional B2B sales strategy (which might be called Top Down Sales). We did sometimes speculate about a Bottom Up Sales strategy but we never settled on one that seemed like it would be effective. So, I’ve seen both and depending on the situation, both can be effective.
Top Down Sales is to focus your attention the “buyer” or the decisionmaker in an organization. Often it is considered a win to get introduced high in the hierarchy of the organization, even if passed down. If the CEO introduces you to the CFO who you hope will sign your contract and ask her team to use your product, the theory is that it the CEO’s attention and knowledge of the buying process will give it legitimacy and increase the odds of winning the deal. The plan is that the CFO upon signing will make it a clear expectation for team and/or the rest of the company to start using the product.
Slack and Atlassian are well known for using Bottom Up Sales. In fact, Atlassian is also known for spending relatively little on sales/marketing.
How to Use It:
It is important that the rest of the sales and marketing strategy is aligned with the Bottom Up Sales strategy.
Check for Market Fit. Before you use Bottom Up Sales, make sure that your market is a fit for it. In particular, how many potential buyers are there in the market? If it is only a few 1000, then it is probably not a fit. Also, for now, industries with a tradition of strong central purchasing or compliance responsibilities like banks, healthcare or federal government, may also not be a fit. (Although a freemium product might work – if you know of examples, please let me know!)
Put User Experience at Core of Product. The more distinctive or delightful the product experience, the more likely the product will work for Bottom Up Sales. In Top Down sales, the end-user experience can be secondary to the features or value provided to the organization. In Bottom Up, the end-user is your buyer and therefore will not put up with poor user experience.
Set the Price. Pricing needs to be low enough for individual purchase (even free). If Freemium, make sure the dimension of pricing does not slow spread internally at the enterprise. Common features for getting the Enterprise to want to buy are: authentication improvements/integration, access control, retention policies, security audits, data control and viewing, Also, you will want to make pricing simple and publish it on your website.
Spread the Word. Prospective customers still need to have some way of hearing about the product, and knowing they want the category. Some ways to do that are a strong content marketing strategy and/or an ability to drive press attention. Another way to do that is to build virality into the product. If you can combine with virality between enterprises that best. It can also be helpful to combine with virality internally at the company or with network effect value.
Make it Self-Service. And make sure that customers can get started themselves online. Signing up and paying for the start although it is also helpful to have self-service onboarding. Being thoughtful about how to get someone from buying to actually using the product without having to talk to anyone in your company can make the Bottom Up Sales strategy really hum.
Benefits:
- If successful, it allows for very rapid growth in revenue.
- Offers the promise of lower spend on sales & marketing.
- If a competitor has a strong enterprise sales force, it can offer a potential strategic counter rather than competing directly.
Trade-Offs:
- It can be a mirage, as some founders (particularly technically-oriented founders) can be attracted to the idea of not having to build a sales and marketing function, when in fact that is what the market requires.
Related Venture Patterns:
- Freemium
- Virality
- Network effects
- Consumerization of Enterprise
Further Reading
Thanks to Dan Levine for pre-read.