Whether you are a freshly minted startup in the throws of a product launch or an industry incumbent expanding into a new market, a go-to-market strategy is essential.
A good go-to-market strategy should help achieve product-market fit through flexibility, not rigidity. Simply put, your strategy is likely to change as you learn more about the new market you’re in and you pivot to better serve and better sell.
Continue reading to learn more about what it takes to create a go-to-market strategy or jump to our infographic about the emerging trends of GTM motions.
What is a Go-To-Market Strategy?
A go-to-market (GTM) strategy is a step-by-step plan for launching a new product, addressing a new audience, or otherwise entering a new industry. It is essentially the outline of how you plan to enter, engage, and win based on a change in one or all of the following three variables:
- Product
- Audience
- Industry
The term product here is used to describe anything your business sells, whether it is a physical or digital product, service, platform, experience, or other offering. The audience is your user, customer, or buyer persona and can be segmented geographically. The industry could be a new vertical within the industry you currently serve or an entirely new industry.
For example, you could be establishing your go-to-market strategy for an existing product tailored to serve a new and different industry. Or you might be selling a new product to your existing audience and industry. Go-to-market strategies are also relied on heavily by startups with new products, audiences, and industries.
Go-To-Marketing or Go-To-Sales
A good place to start is understanding the various GTM motions that can be leveraged to grow one’s market share. Will your strategy be driven primarily by sales, marketing, or a combination of both — and if so, at what composition for each?
Product-led growth, for example, relies more heavily on product marketing and sales enablement while a top-down GTM approach will require building an enterprise sales team.
Pricing will be the most important factor in your strategy here because a product with low ACV will not warrant an enterprise sales team and a product with high ACV will be less likely to grow-to-market (sorry) without an outside sales team.
Crossing the Chasm Inside the Tornado
Combining references to the famous books on go-to-market strategies by Geoffrey Moore, Crossing The Chasm and Inside The Tornado, no matter where in your product’s life-cycle, entering a new or expanding market requires knowledge of the intricacies of adoption and hypergrowth.
For example, understanding that whether you’re launching a new product or broadening to a new market, the adoption curve will follow a similar path of barriers and chasms. Your GTM strategy should plan for the various stages of an expanding market, starting with an ICP that will be most likely to adopt early, connecting with your value prop and taking a risk on your new offering.
As the product is adopted and the market changes, so should your GTM strategy. For example, you may have started with a long, outside sales cycle, customizing the new product to work for your early adopters, but now that the product is the market leader, you can lean on more scalable GTM motions, like sales enablement and inside sales teams.
Go-To-Market Analysis
We’ve touched on a few of the early analyses you will need in order to have a coherent GTM strategy, but will cover them more in-depth here.
1. Pricing
Your pricing strategy will be the gravitational force that keeps your GTM strategy down to earth. As we’ve mentioned, deal size will strongly influence whether you plan to take on a sales-led or product-led approach.
Your pricing strategy should also plan for a progressively larger market and how that can necessitate changes in pricing. For example, if your early book of business was driven by high-margin sales into the healthcare industry, a new target market that is more price-sensitive but requires less direct selling would necessitate a lower price.
The new market could also require less complexity in the product, which leads us to our next point.
2. Product-Market Fit
Another consideration for your go-to-market strategy is whether or not you have achieved product-market fit. Product-market fit is the union of a solution (your product) to an audience's problem (the market) that they are willing to pay to have solved.
It’s important to deeply understand the value of the problem or customer pain point you are trying to solve. Many defer to the vitamin vs. painkiller analysis — is your product a nice-to-have or a must-have?
You must remain nimble and willing to pivot when your GTM strategy meets the actual market. The winning strategy will be chosen by a majority of votes — in the form of dollars not ballots.
3. Ideal Customer Profiles (ICP)
Don’t just consider who will be buying your product. Consider who will be buying your product first.
You’ll notice “profiles” is plural above. This is because you should have more than one ICP that will align with your GTM strategy at different phases of your product’s life cycle.
For example, your initial customer profile might be a company of a certain size, maturity, within a specific geographic location, or in a place to invest in the technology, product, or service you are offering. As you learn, improve, and grow, the ICP will also morph into a different type of customer.
4. Competition
It wouldn’t be a complete go-to-market strategy without understanding where the competition currently fits into the market. Are there multiple competitors? Is there a dominant player? Do they differ on quality or price?
If there is existing competition, you’ll need to understand what will differentiate you and why someone would incur the switching costs to move their business to you.
5. Distribution
Getting the word out about your product is one thing; actually getting your product out is an entirely separate, albeit equally important, undertaking.
Reid Hoffman, founder of LinkedIn and venture partner at Greylock, believes that network effect businesses must develop their distribution strategy alongside their product. In some cases, your distribution mechanisms can change or take on a multi-faceted approach.
For example, in the go-to-market matrix below, you’ll notice that at various deal quantities and sizes, the GTM motion may differ. For example, many deals at low value could warrant a sales enablement approach to grow the freemium base and expand the accounts over time.
Developing Your Go-To-Market Strategy
Once you’ve completed your GTM analysis, you’ll want to start developing a strategy to position and get your product to market. Use these questions as a guide to complete a high level overview of your GTM strategy.
Prepare Your Marketing Plan
How are you going to get in front of the right people in the right place at the right time? You’ve already identified your ICP in your analysis, so now it’s time to outline your ideal customer’s journey. You can think of the customer’s journey and respective marketing goal in three stages:
1. Awareness Stage & Lead Generation
Where will you find prospective customers, and how will you reach them before they even realize what their problem is? Often during the awareness stage, prospects have begun experiencing symptoms of a problem, so they are still not ready to fully invest in your solution just yet.
2. Consideration Stage & Lead Nurturing
How can you encourage a prospect to follow your brand and put your product on their list of potential solutions? By the consideration stage, your prospect has now identified their problem, but is still unsure of the solution.
As they research their solution, you’ll want to provide answers as they relate to your product to help them become familiar with your brand. Again, content and consultations are your friends here, except both will be more focused on your products and how they solve your prospect’s problem.
3. Decision Stage & Sales Enablement
How will you convey your product is the solution to a prospect’s identified problem? By the decision stage, your prospect is narrowing their list of potential products as their problem’s solution. You’ll need both sales enablement content and a sales team, but how you utilize both will vary based on the complexity of your product and the preferences of your ICP.
For more complex products, you may need a salesperson to walk through all of the features, whereas for less complex products you can rely more on in-depth content. In some cases, your prospects may prefer a robust resource library with tutorials and guides to ensure the product is the right solution for them, while others prefer a rep they can call for support and live demos before they buy. The right mix of content and the right mix of an inside and outside sales team will be crucial at this stage.
Understand Your Pricing Model & Strategy
What is your pricing model and strategy? Pricing extends beyond just your financial objectives; it also ties in closely with your branding and product positioning. You’ll want to consider your pricing model and pricing strategy after researching what your competitors are doing and what your ideal customers are used to paying.
Depending on the product, you may consider performance-based pricing like a monthly subscription, pay-per-use, pay-per-seat, or combination of all three. In other cases, you may prefer fixed pricing for a one-time purchase or tiers of fixed rates based on the features or access. Take note of what your competitors are doing to see how it may influence your pricing model.
Your pricing strategy defines how much you are charging in relation to the quality, and why. Pricing sends a message about how you are positioning your product in relation to your competitors.
A price-value matrix, with price as one axis and quality as the other, helps you visualize where you fall in relation to competitors. (Quality here means fewer or limited features, not an inferior product.) There are several pricing strategies to help you position your product that can be plotted on a price-value matrix, including:
Economy Pricing
This is the low cost strategy that typically only businesses that sustain lower operating costs can offer. Economy pricing can mean gaining a larger market share and a competitive advantage.
The risk here is that there can only be one product that is truly the lowest cost in the market, making you susceptible to competitors with larger economies of scale able to offer similar products at a lower cost. Customers are often less loyal as they are shopping around for the lowest price, so your market share can quickly shift.
Premium Pricing
This is the high cost strategy, which in turn makes it the riskiest but also the most profitable. It’s important to note a high price does not automatically define your product as premium — your product’s quality needs to be perceived as high among your customers in relation to competitors.
The risk of over promising and under delivering is highest in this category, but your potential profit margin is, too. Customers who are shopping for a premium product are often more likely to be brand loyalists, so once you have them you’re less likely to lose them to a competitor.
Competitive Pricing
This is not as clear cut as the other two strategies as it depends heavily on what your competitors are doing. You can simply match the price of a competitor or surround the middle market price of several competitors. The idea here is to win your competition’s market share by providing a better product at the same price.
The risk is that you are dependent on your competitors; if they offer promotion pricing or lower their price, you may lose a share of the market if you do not continue to match their price.
Set Your Goals & Finalize Your Sales Plan
Whether you are expanding your market share of an existing product into a new industry, or you’re creating a new product for existing customers, once you define the main goal of your product, how will you know if you’re successful?
You’ve likely heard of SMART goals, and they will be the guiding light in your sales plan. As a refresher, SMART is an acronym for Specific, Measurable, Attainable, Relevant, and Time-specific. Typically your goals will either be oriented around activities or outcomes, meaning the primary variable you are attempting to influence is either the activity or the outcome.
A sales plan can help outline your high level strategy for your ultimate goal, increasing revenue over a specified period of time, helping leadership teams communicate on priorities and expectations. Therefore, your sales plan should be shared not just with your sales team, but also with leadership across your organization.
Take Your Product to Market (And Keep It There)
Once your product has launched, how are you going to keep it in the market? You’ll need alignment between marketing, sales, and operations to ensure budget, resources, and channels of communications exist to support your product after launch.
Such alignment across your leadership teams can be achieved through the use of common language, metrics, and processes to facilitate alignment on goals. Transparency on the progress towards these goals is also crucial to unite your leadership teams. Business intelligence dashboards with real-time reporting can visualize how your product is performing and provide insights into which activities are working (and which aren’t).
From the customer perspective, the symbiotic relationship between these departments translates into smooth transitions throughout their journey from a marketing lead to a sales prospect to a customer.
Your job isn’t over when the product has launched, nor is it over when the product continues to just exist in the market. To achieve the goals set forth in your sales plan, you need to be responsive to feedback and adapt accordingly to move to where you want to be within the positioning matrix. This is why closed loop reporting between marketing, sales, and operations teams is crucial.
AI Disruption: 5 Trends in Go-To-Market Strategies
Take advantage of today’s technology by powering your GTM strategy with AI tools and machine learning platforms. People.ai is the only Revenue Operations and Intelligence platform that uses AI to uncover actionable insights, increase productivity, and drive consistent execution quarter over quarter.
Encourage your marketing and sales teams to work together with the help of sales enablement platforms that widen the funnel and reach broader markets. Similarly, empower your sales and operations teams to collaborate on the development and tracking of those SMART goals laid out in your sales plan with the help of business intelligence dashboards.
Read more about the tech disruption trends in GTM strategies:
