The Anatomy of a GTM Strategy
According to Harvard Business School professor Clayton Christensen, there are over 30,000 new products introduced every year, and 95 percent fail. A GTM (go-to-market strategy), more than anything, is roadmap that serves as the foundation of a product or service launch. Specifically, it’s a plan that maps out the way a company introduces a new product or service to the market. It's not a broad outline and it's not ambiguous. Rather, it identifies the specific factors that will impact how a product will be received by its target audience. According to Stanford University’s Graduate School of Business, “GTM strategies commonly describe how a company will introduce its new product or service to customers, including when it will launch and at what price. While there is no universally accepted definition of what constitutes a GTM plan, the Institute for Supply Management defines it as “a marketing strategy on the front end of the supply chain for managing demand and supply relationships throughout the distribution channel.”
One of the main goals of go-to-market strategy is to ensure competitive edge. You wouldn’t want to introduce a product without knowing how your target audience would respond. To not understand the competitive landscape is a set-up for failure.
Why GTM Strategies Fail
The smartest GTM strategies are typically developed as an interdepartmental collaborative effort among marketing, product management, and sales with marketing leading the way with implementation and execution. Many GTM strategies do not address the consideration of available resources required and how they might impact your ability to complete the plan. Once you set these parameters, define your intended sales channels (both physical and virtual), then plan your launch date. The purpose of this is to make certain that your GTM strategy meets with expectations.
If you look at it in this way, there are two basic approaches to launching a product or service. You can either introduce the product to appeal to a limited market segment or you can introduce it to a wide market with the hope that they will respond positively. One of the key differences is time-frame. With a limited market segment, you have less time to evaluate the response and feedback before making a large investment. Therefore, unless your product is a game changer, then you may not be able to justify your investment if it doesn’t generate immediate sales results. While most companies focus on the future, they don’t take into account potential risks that might impact their ability to introduce a product or service successfully. An effective GTM strategy is an art, not a science. Technology changes and economies change. So, although there are typically multiple action items to the GTM plan, these actions may change based on industry norms and how much time you allot to gauge success.
Understand Your Market
Conduct a thorough research and market analysis for the specific industry in which you intend to sell your product or service. The goal of this exercise is to understand if your product is viable and if so, the dynamics of your market, giving considerable weight to volume and value, understanding your buyer's persona and their patterns, what your competition is doing and how they're communicating and branding their products, engaging interest, and other crucial factors. A thorough marketing analysis should answer the following questions:
What problem does my product solve?
Who are my potential customers and how do they want to be communicated to?
What are my customers' buying habits?
How large is my target market?
What do my customers want (or need) and how much are they willing to pay for my product?
Who are my main competitors?
What are my competitors' strengths and weaknesses?
What is my risk?
What are emerging trends and is my product a "me, too" product or a game-changer?
Prioritize multiple target market segments
You have a finite budget and infinite target customer market segments. What do you do? Prioritize the different market segments you want to reach. Some key pillars of messaging can be designed to reach the total market, but you will need targeted primary messaging to reach your most desired target audience. This is why defining your buyer persona and the customer journey are pivotal to your GTM. Once these details are understood, the product positioning can be developed to align with the value proposition and with customer expectations.
Marketing Plans Matter
A strategic marketing plan is the playbook you'll follow, illustrating how you will sell your product or service. You often hear about the 4P’s of marketing: Price, Product, Place, and Promotion. And let's add three more P’s while we're at it: Positioning, sales Process and the People involved in getting the product to market.
How much are you willing to invest in marketing? This includes all costs of getting your product to market (such as advertising, promotion, distribution) as well as how much you are willing to invest in customer retention strategies. Your pricing model should follow a strategy that primarily depends on the maturity of your product and the market. New products may follow a market penetration strategy to gain entry. Mature products may take a value or premium approach, depending on the goals of the business — going for market share or revenue.
Which communication channels are you going to focus on? What you spend your money on and where you spend it needs to align with your target market. Most companies measure metrics. What will happen in case of failure? How much money are you willing to invest in the product and how many times are you willing to fail without giving up? It’s important that you make this decision early on so that everyone is on the same page when it comes time to drop resources. Test, test some more, and test again before committing large budgets to an advertising plan that won't return ROI goals of your strategy. Also, understand that ROI isn't always about the dollars; sometimes it's about the success of brand awareness and other intangible marketing goals. We call this ROO (return on objective.)
Positioning helps determine how your product or service will benefit your customer. Often referred to as the Brand Promise, positioning is the bedrock component of branding. How you sell, service and support your brand is integral to its success – it affects everything from the how your product is perceived emotionally, to how your customer experiences your brand-- from their initial contact with your company, their experience with your product, and the sustained support your customers may need post-sale. Positioning supports your key pillars of messaging (what’s in for me) and secondary messaging and/or data (reasons to believe.) Your product has to be competitive. If it’s not competitive, no amount of marketing can fix it.
Place refers to your method of distribution, as well as the Process and People. Consider the cost and benefits of distribution through direct channels or distribution channels. Many companies have a hybrid approach, choosing to sell some products directly, some products exclusively online, and using distributors for selling products in areas that they cannot service efficiently.
Promotion has to be budgeted to adequately support the product — either to build a name and get brand recognition or to support sales efforts. This also includes a customer acquisition plan to explain how you will attract and retain customers. This plan basically applies the buyer’s journey and subsequently the customer journey related to the product. How can you build awareness, develop interest, get commitment, and retain/re-engage the customer through the lifecycle of the product?
The Importance of Integrated Marketing
Another critical component of any GTM strategy is planning for sales support and training built on a foundation of an integrated marketing plan. Whether you are promoting B2B or B2C, a well-balanced integrated marketing communication plan plays an integral role in communicating your brand message to your target audience. An integrated marketing strategy helps in coordinating all of your essential marketing tactics to communicate a synthesized message to potential and existing end-users. It also goes a long way in creating brand awareness among your target audience, most cost-efficiently. Integrated marketing communication is essential whether your marketing focus is B2B or B2C. Most organizations can realize significant results from a robust integrated marketing communication plan from brand awareness to active engagement and purchase or adoption.
How will your GTM Strategy define success? Decide which metrics you feel are the biggest indicators of your launch's success. If you start tracking your metrics from the beginning, it will be easier to identify problems and pivot to new solutions. Your GTM strategy should include a set KPIs that are both realistic and attainable. There are dozens of KPIs to measure success. Consider which ones will define how well your strategy worked. A few to consider are:
Number of visits to your landing page
Number of qualified leads
Number of inbound interactions
Revenue per customer
Cash burn rate
Customer Acquisition Cost
Conversions of leads to sales
Number of ad clicks
In conclusion, not all GTM strategies will be successful. Understand your business goals, your target audience, and how to reach them. Know your risks and get your people and resources on board and in line early.