This little piggy went to market, but the other piggy had a brilliant go-to-market strategy that crushed the competition. Implementing a carefully designed go-to-market plan might mean the difference between a phenomenal market debut and never making the most out of real product potential.
Ergo, it pays to have a go-to-market strategy. It’s vital for salespeople and marketers to know what they are, why they’re important, and about the different types. Chances are that you will be part of one, so understanding what steps are involved will definitely come in handy down the road.
What Is a Go-to-Market Strategy?
A go-to-market strategy (GTM strategy) is a plan that details how a company will introduce a product or service to their market. Go-to-market strategies are made by looking at a bunch of different issues like company goals, customer personas, pricing, competition, and distribution. When a go-to-market plan succeeds, it enables the product to reach the right customers in a way that gives the company an advantage over competitors.
The “classic” use of a go-to-market plan is to deliver a new product to the market, but there are other applications as well, such as entry to a new market and rebranding. Plus, don’t get confused with all of those other plans that float around, like:
- Business plans – similar to a go-to-market plan, but adds financing and concentrates on strategy
- Expansion plans – the next step after a go-to-market plan
- Strategic plans – the most detailed of them all, and can cover new markets, distribution channels, and marketing/sales targets, as well as product changes, organizational adaptations, and financing
Why Do You Need a Go-to-Market Strategy?
The history of sales and marketing is filled with enormous flops, many of them suffered by established, market-leading products. The best example might be the introduction of New Coke, where Coca-Cola replaced a winning formula with something untested, unnecessary, and unpopular. It shows that even the strongest brands in the world, with phenomenal strategic talent to match, can really screw up when they don’t plan comprehensively.
That’s even truer for totally new products and inexperienced entrepreneurs. You might like your product, but that’s no guarantee that anybody else will. Or, there might be an audience for your product out there who will turn you into a billionaire. But identifying and building an excellent go-to-market strategy to reach that audience has to happen first.
Another reason for go-to-market plans is to refine all kinds of ideas related to your product. Take, for instance, the concept of customer personas, which is an important part of the go-to-market process. As you’re slavishly working on this aspect of your B2B go-to-market strategy, you might realize that your ideal customer is X instead of Y. But X has lower average revenue than Y, and sources online instead of through reps. Suddenly, you’ve got to work with a whole different logistics chain, reduce your prices, and develop a new sales strategy. Sounds painful, but it . And better yet, making changes before you head out into the world is much easier than fixing everything after the fact.
Types of Go-to-Market Strategies
For some companies, following a general go-to-market strategy framework, as described below, is good enough. Other companies start off with a certain objective built in to them. Some go-to-market strategy examples include:
A sales funnel go-to-market framework is focused on creating initial interest and sales. This could be a good go-to-market strategy for startups because it allows them to enter the market, then pause to review and maybe make some changes before beginning a wider market effort.
A flywheel go-to-market strategy defines a cycle of activities that lead to a snowball effect of increasing sales. Here’s a basic example:
- Market heavily to a certain client group
- Use this as a foot in the door to establish personal connections with the client
- Encourage the client to spread the word about your product, leading to the next cycle
A product-based go-to-market strategy lets the product “do the talking”. For example, some apps frequently suggest upgrades to users, so that the product itself is generating sales. This is a common SAAS go-to-market strategy and is used by companies like Slack and Calendly.
A sales-based go-to-market model generates interest through marketing campaigns and captures leads through signups for content and demos. Once the prospect agrees, sales will contact and try to convert them.
6 Steps to Build a Go-to-Market Strategy Plan
Go-to-market plans are a holistic exercise. Essentially, every decision maker has a part in it. They can take a lot of time and effort, particularly for new teams.
The good news is that you can build on a go-to-market strategy for many other types of plans, so all that brainstorming and research and revision won’t go to waste.
Goals
You better love acronyms! You’ll use them plenty during the goal-setting phase of go-to-market strategies. It’s a good idea to decide on these as a first step because they help you stick to certain limits at each stage. If you find that the goals are not realistic, or even relevant, as planning continues, you can always reset.
Among the types of goals you should set are:
OKRs – Objectives and key results are about the goals that you hit along the way to KPIs (see below). They can be expressed as “I will do X to achieve Y”. For example, an OKR might be sending out 1,000 validated emails to reach a click-through rate of 2%.
KPIs – A key performance indicator is a measurable event that tells you whether a goal has been reached. Taking the example of emails, a KPI for revenue would be converting that 2% CTR into 20 new clients signing up for your premium service package.
Customers
Now, do you love jargon as well? Of course you do. As part of the next phase, you’ll be figuring out who wants to buy your product while getting familiar with lots of terms along the way. The “customer discovery” process works like a funnel, where you need to define:
Value Proposition > Product-Market Fit > Ideal Customer Profile > Buyer Personas
Here’s how it works:
The value proposition explains how your product is used but in a very simple way. For example, Uber’s value proposition is “tap the app, get a ride.”
The product-market fit describes what kind of market demand justifies using the product. Uber found a product-market fit by providing free or discounted rides in a market where taxis were expensive and inefficient.
The ideal customer profile (ICP) is all about the type of person or organization most likely to use the service. There are a whole lot of categories here, including physical location, revenue/income level, and demographic/industry. Uber’s ideal customer is between 18 and 29 years old, urban dweller, and high-income earner.
Then we reach buyer personas. This is basically a personality profile that you can derive from the IDP. The idea of a persona is to translate the facts and figures of the IDP into something relatable. For example, one buyer persona for Uber is a guy named Aidan who lives in NYC, makes $50,000 as a bank consultant, and wants to balance his work life and social life.
Competitors
Discovering who came before you in the market, and how they do business, can lead to opportunities. If you find a hole in their strategy, you can exploit it. Maybe their pricing is too high, or people really dislike their customer service. Analyzing the competition is also necessary to find out what channels will work with you, and where you can achieve “mind share” in your target market. Competitive research should cover:
- A SWOT analysis of competitor products
- A comparison of value propositions and unique selling points
- Competitor market share, revenue, and projections
- Analysis of competitor marketing strategy
- Overview of customer reviews and general gossip
Messaging
With the knowledge of your target market and competitors in hand, you can now develop the messaging that brings it all together. Understanding your potential customers allows you to know what pain points they want to be solved, and being familiar with competitors enables you to craft a message that is different from theirs. Once you have decided on a central theme, it should apply to every piece of content and strategy information that you put out.
Mapping
Next step: figure out the customer journey. This idea became popular with eCommerce, but it’s actually a great tool no matter what channels you depend on. The point here is to define all of the things that need to happen at each stage to propel the prospect onward.
The sales funnel is a good way to visualize the process. Each stage of the funnel involves a certain point of contact and various activities. But no matter what model you consider, make sure that the following functions are ready and optimized for every step.
- Initialize contact (top of funnel) – advertising and marketing media; A/B tests of messaging; lead generation and follow-ups
- Develop contact (middle of funnel) – demos, marketing collateral, product trials; meetings and email campaigns for qualified leads; pricing plans and promotions
- Finalize contact (bottom of funnel) – customer service, surveys, and upselling; product revisions and bug fixes; referrals and recommendations for “word of mouth” sales
Marketing
It’s fitting that a go-to-market strategy ends with the marketing plan. You are now familiar with the target client, and from the mapping process, you should know the points of contact and what happens at each one. Now, put together the related processes and resources. These form two major groups:
Sales. How will your target customers hear about your product? It all goes back to decisions made during the mapping step. There is a wide range of possibilities here, from your salespeople doing all the work to an agent (or even an app!) getting trained and doing most of it.
Channels. How will your target customers obtain your product? Here, you will probably need to source and contract with third parties, unless you are selling direct. There is a tradeoff – the more channels you use, the less involvement you have, but you also have less control and get a smaller portion of revenue.
A Note on Pricing
Pricing is difficult to set in the early stages of a business. You need to take into account all of the margins paid to third parties like manufacturers and distributors; support from investors; discounts and promotions; competitor pricing; the cost of running your operations; and projected demand, just to name a few considerations.
Key Takeaways
- Go-to-market strategies are a must-have, for everyone from small startups to experienced multinationals
- GTM strategies come in many forms and will help with various types of planning and development objectives
- Following the six steps of a go-to-market plan takes work but provides vital information that you will use for market entry and onwards
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