There is a term used frequently in sales and marketing, but it is often misunderstood. That term is “Go-to-Market Strategy” (GTM). Understanding and implementing a GTM strategy for your business is absolutely critical to reaching your growth goals. But, ask several people to define what a GTM strategy entails, and you’ll probably get multiple answers. For our purposes, I define a GTM strategy as an action plan that will define how you will reach customers and achieve competitive advantage. I will briefly define the benefits of a GTM strategy and then let’s look at the four key components that must be developed for your strategy to be successful.
The Goals of Your Go-to-Market Strategy
A complete GTM plan will define the optimal mix of markets, customers, channels, products/services and value propositions needed to:
- Create a complete customer experience that attracts your ideal customers
- Increase sales and market share
- Increase sales efficiency and reduce cost of sales
- Generate optimal profits
The Four Components of Go-to-Market Success
1. Define your target market: Start with a broad universe of markets that can be derived from public lists or marketing databases, such as Data.com, Hoovers, or InfoUSA. Then evaluate those broad markets based on several relevant criteria such as:
- Market size for your product/service
- Projected market growth rate
- Ability to develop a niche in this market segment
- Cost to enter the market and achieve profitability
- Sales channels available to reach this market
- Competitive density in this market
I suggest you create a list of 8 to 10 sub-markets that best meet your defined criteria above. The next step is the most important step in your GTM strategy: do first-hand market research with dozens of potential prospects to determine buyer interest and demand for your offering. This will prove invaluable as you evaluate your target markets’ readiness for your product/service. This process will also help you prioritize the key markets that have the most immediate sales opportunities, have low barriers to entry and can be easily reached via sales channels.
2. Define your customer’s needs: First, you must understand the fundamental needs of your target market. Defining these needs will drive your product/service offerings, marketing messages and promotion, sales strategies, sales channels, support and customer service. Remember, only your potential customers can tell you their fundamental needs. Next, you must understand what type of customer experience they desire. What kind of relationship do they want with your company? Do they prefer a low-cost, transactional experience, a high-touch consultative experience or something in between? To gain traction, you absolutely must develop competency in delivering the type of relationship your customers expect. As part of that experience, you must align your sales channels with your customer’s buying behavior. You must determine how are they buying now and how will they buy in the future?
3. Define your sales channels: What is a sales channel? It’s the method you use to connect your products and services to your target market. The three broad market types for business to business (B2B) sales are:
- Direct sales channel – such as a field sales force. Best used for complex, specialized, customized sales or for the acquisition of key accounts.
- Indirect channel – such as business partners. Agents, brokers, resellers, distributors and integrators all fit in this category.
- Direct to customer – any channel for directly selling to customers. The three main channels here are internet, telesales and direct mail.
4. Define your value proposition statement. This statement is the core message that drives customer interest and their buying activity. An appealing, winning value proposition statement is just as important as the actual product or service you’re offering. This message gets you offering in front of your potential customers and creates interest. A winning value proposition statement is:
- Simple – clear, concise, and to the point. It needs to be easy to understand and communicate the value of your offering.
- Compelling – it explains why someone would actually be interested in your offering
- Believable – while compelling is good, it must be realistic, believable and honest
- Attractive to your customers – the message must be targeted specifically to your target market and gives them personal context for your product/service
A value proposition has three components:
- What your product/service is
- Addresses your target customer and their needs
- Describes the value (not features or functions) you provide them
Here are some good value prop statements that I feel hit the mark. Also remember, a value proposition statement does not necessarily need to be “advertising copy.”
- Google: Google is a global technology leader focused on improving the ways people connect with information…our mission is to organize the world’s information and make it universally accessible and useful.
- Dollar Shave Club: A great shave for a few bucks a month. No commitments. No fees. No BS.
- FreshBooks Accounting Software: Small business accounting software designed for you, the non-accountant.
Ideally, your customers will give you feedback on a proposed value proposition. Done in a vacuum, you could mistakenly construct a limited statement that does not excite them. And, gradual refinement over time is essential to staying in touch with your customer’s needs.
A Go-to-Market Strategy for Focus and Clarity
A well thought out and planned go-to-market strategy is paramount for understanding and finding your ideal customers. It should provide focus and clarity for your marketing and sales efforts. Without a well-defined GTM strategy, much effort will be wasted in acquiring new customers. But with a well-planned and researched strategy, you will connect with your target markets much more quickly and drive your sales results to new heights.