What is a go-to-market strategy?
A go-to-market strategy is a plan businesses implement to determine how they will find new customers and sell their product. GTM strategies typically include how the business will gain a competitive advantage, pricing, branding, sales and marketing channels, and the user journey.
Why is a go-to-market strategy important?
Your go-to-market strategy is important because it defines how you will get in front of your ideal customer. The strategy provides micro-level detail about who you are selling to and how you will achieve your launch goals.
A solid pre-launch strategy allows you to minimize the risk involved with a new business or product. It also increases the potential for ROI as you’ve thought through all eventualities.
Sufficient analysis of your competitors gives you a deep understanding of your customer’s needs and how you can reach them.
Delving into detail with your go-to-market strategy means you can gain the competitive advantage you need to attract new customers. For a successful product launch, you need to position your products and show their value convincingly.
Companies that don’t gather information about their market or customer before launch have a much higher chance of failure.
Who needs a go-to-market strategy?
Anyone launching a new product in an existing market needs a strategy for how they will execute the launch. If you plan to launch an existing product in a new market, you will also need a plan.
You will need a go-to-market strategy if:
- You’re a startup launching its first product
- You’re an existing company launching a new product
- You want to test the market for your product’s growth potential
- You want to relaunch an existing product into a new market or to new users
What are the different types of go-to-market strategy?
You can develop two main types of strategy:
- Product-led strategy
- Sales led strategy
A product-led strategy provides so much value to the customer that it’s a no-brainer they extend their free trial or upgrade their subscription. Product-led growth strategies work well for B2C subscriptions, like Spotify or YouTube. The product is self-explanatory, and the user can figure out how to use it.
Sales-led strategies rely on marketing and sales to create excitement and interest in the product before it launches. Once there is interest, the salesperson needs to convert the leads into paying customers. A sales-led strategy is more effective for more complex products that may require demos and salespeople to close the deal.
What is the difference between a go-to-market strategy and a marketing plan?
A GTM strategy targets a specific product launch. While a marketing plan informs your overall, long-term strategy for reaching new customers with the right messaging.
What should a go-to-market strategy include?
When building your go-to-market strategy, there are a few key components:
- Target market
- Product market fit
- Communication channels
To start outlining your GTM strategy, determine the target audience for your product. This could be a demographic, a profession, or a location.
Researching your competitors at this stage can inform your GTM and how you will communicate your competitive advantage. A handle on your competitors will also help you understand if there’s enough demand for your product or if the market is oversaturated.
Product market fit
Once you have your ideal customer persona, you need to determine whether there is demand for your product.
Product market fit will help you define your value proposition and show how you better solve your customer’s problem than the competition.
An effective GTM strategy needs a price plan. Overpricing your product could leave you losing out on potential customers, whereas underpricing it can lose you revenue.
Speaking to your customers during the research phase should help determine the most effective pricing structure.
Can your customer upgrade, buy extras, or repurchase once they are customers? Take Mailchimp, for example, which offers enhanced features, integrations, and higher volumes of messages to those with a free plan.
The user experience is another essential element in your GTM pricing strategy. How customers pay will impact the ease at which they progress in your sales funnel. It needs to be easy to pay, or set up an account, to prevent them from bouncing before you close the deal.
How will you communicate your product’s value to your potential customer? How will your message prove to potential customers that your solution solves their pain point? What’s your marketing budget, and how will you deliver your message?
Your key message is vital to your GTM strategy as it helps you stay consistent with how you communicate with potential customers.
A value matrix can help you flesh out your key messaging.
Here’s an example of how Slack solves a pain point:
|How product solves it
|Wasting time on emailing colleaguesDoesn’t deliver targets Stagnating growth due to low productivity
|Wastes less time in irrelevant email chains & unnecessary communication More focused on delivering targets
|Messaging that means business”You can work faster and more flexibly
Communicating your message will involve testing as you track which channels perform best. You will need to tweak your messaging depending on the channel or the audience you’re targeting.
Define your metrics
No GTM strategy is a success unless you define how you will track its performance. Key metrics to keep in mind include
Tracking how you’re acquiring customers and how much you spend on each acquisition will help take any guesswork out of your product launch. You’ll be able to adjust your strategy to get the right message in front of the right audience at the right time.
Do you need help with putting together your GTM strategy? Master your next product launch by speaking to one of our mentors with go-to-market expertise.