A go-to-market strategy is an action plan that outlines how a business will launch a new product or service or introduce an existing offering to a new market. As such, go-to-market strategies tend to focus on the short-term. Typically, a go-to-market strategy outlines the most profitable target market the business will go after, plans to achieve product-market fit by testing their value proposition, a pricing strategy to maximize profits, and a distribution and adoption plan to roll out the launch.
A go-to-market strategy is a subset of a company’s overall marketing strategy. While a company’s marketing strategy covers the company’s entire brand, a go-to-market strategy focuses on a specific product or service launch.
There is no standard format for a go-to-market strategy. Your go-to-market strategy will depend on a lot of things like your business model, your brand’s level of maturity, your presence in a specific market, how you are organized and funded, as well as any exit plans you may have.
Any product or service company that is looking to attract new customers would benefit from a go-to-market strategy. Some of the common scenarios include:
A business launching their first product or service
An established business launching a new offering
Relaunching a product that has been innovated to attract new users
Scaling an offering to achieve a greater growth trajectory
A good go-to-market strategy is designed to mitigate risk and maximize return on investment (ROI) by gathering knowledge before launching the final product or service. A good go-to-market plan allows companies to concentrate their marketing efforts to resonate with a specific and profitable customer segment, using a detailed set of channels that will provide the highest ROI for the business.
Go-To-Market Growth Drivers
How you approach your go-to-market strategy depends on what will be driving your growth. In simple terms, there are four sales strategy options: sales-led growth, market-led growth, product-led growth, and partner-led growth.
Sales-Led
Most Business to Business or B2B companies employ a sales-led approach based on the fact that most sales are complex sales. Sales-led businesses employ sales reps who pick up the phones and make cold calls to fill the sales pipeline. Being sales-led is a person-to-person approach where the salesperson can tailor their sales pitch based on the customer’s unique situation and position in the company, and the salesperson is provided the latitude to construct a unique solution for each customer and situation.
Moreover, many small businesses tend to be sales-led since their business lacks strong brand awareness or collateral material and requires a more personal touch in selling to fill in the gaps. In a sales-led organization, marketing efforts play more of a supporting role rather than a leading one.
Sales-led companies spend a great deal of effort creating sales collateral such as datasheets. They participate in industry events as a way to generate sales leads. Every lead is worth pursuing in a sales-led organization, as very few lead qualification strategies are employed. Sales-led organizations frequently use pressure-based email marketing tactics, and the main metric used to assess performance is getting the sale.
Market-Led
Many Business to Consumer or B2C companies employ a market-led approach. Market-led organizations use content to create leads and use systems, often automated, to shepherd a prospect through the buyer’s journey.
Marketing collateral consists of papers and eBooks designed to educate the prospect and help establish the credibility of the business as a thought leader in their industry. The content produced by market-led companies is often displayed using a “Take One” box where prospects gather and uses a strong call to action to move prospects through the sales funnel.
Since there is less reliance on a person-to-person sales rep to close the deal, marketing efforts include ways to nurture and qualify the leads as they progress down the sales funnel. Multiple pathways exist for a lead to travel through the sales funnel, based on their pain points and personas. Most sales are closed without the need for a sales rep. If a sales rep is required to make the final sale, rest assured that only the most qualified leads make it to sales.
Product-Led
Most Software as a Service or SaaS companies employ a product-led approach. Product-led organizations use a bottom-up approach to make sales. Instead of trying to educate the customer or just telling them what they would get if they bought the product, product-led companies offer the user access to the product, so they can create their own “Aha” moments by actually using it.
Product-led strategies rely heavily on network effects in the hopes that their usage will make the product go viral.
The design of a product-led strategy starts with focusing on users rather than buyers, and targets the pain the user experiences, and provides an immediate solution to address the pain.
Often product-led organizations employ free trials or Freemium versions to get the product in a prospect’s hands at no initial cost, to remove the price factor, and gain trust before making a sale. Product-led strategies rely on the use of up-selling to remove restrictions on the product’s usage.
Partner-Led
Many solution companies, such as businesses that specialize in cybersecurity solutions, offer their value-added services to managed service providers (MSPs) or IT consulting firms in a partner-led approach. Partner-led strategies delegate sales activities to partner organizations. These partners leverage their existing networks and relationships to promote and sell the business’s products or services.
One notable characteristic of Partner-led strategies is the utilization of email domains that align with the partner organizations, making communications appear as if they originate from within the partner’s network. This tactic enhances credibility and fosters trust among potential customers, as they perceive the business as an integral part of the partner ecosystem.
Unlike other growth drivers, where branding plays a significant role in customer acquisition, Partner-Led strategies prioritize leveraging the partner’s brand and reputation. This shift in focus allows businesses to tap into established market channels and penetrate new customer segments more effectively.
However, reliance on a single partner for sales can be risky, as it exposes the business to fluctuations in the partner’s performance or changes in their market position. Therefore, diversification of partners should be a key goal for companies employing Partner-led strategies. By cultivating relationships with multiple partners across different regions or industries, businesses can mitigate risks and ensure a more stable revenue stream.
Effective Partner-led strategies involve close collaboration with partners to establish mutually beneficial incentives for driving sales. By empowering partners to act as extensions of the business, companies can scale their reach and accelerate growth in a cost-effective manner.
Building a Go-To-Market Strategy
A good go-to-market strategy involves researching and identifying four core components so that the business can focus its marketing and sales resources only on the functions that will generate the greatest return.
Target Market
Your target market, also known as your customer segment, indicates for whom you create value. The “Who” represents the target market. The target market needs to focus on the niche that will provide the greatest return. While many small businesses may think it is better to have a large target market, it is far better to concentrate their limited resources on a subset of the market, that will provide the greatest ROI. When you target everybody, you will be average at best. You will try not to offend anyone while trying to satisfy everyone. The result is you will compromise and generalize.
An important part of understanding your target market is understanding how decisions are made. Selling to a consumer who is the user and decision-maker is far simpler than selling to businesses when the target market consists of three different customer segments that include at least one gatekeeper, such as a purchasing officer, one money person with budget responsibility, and one technical person with the need, all of whom contribute to the buying decision.
Most businesses are inclined to look at their target market in terms of a customer persona, especially with B2C companies. They identify the demographic and psychographic characteristics of the most ideal customer to create a semi-fictional archetype. Having a clear understanding of your target market gives you insight into what your prospects are thinking and doing, as they weigh potential options that address the problem they want to solve.
Product-Market Fit
Product-market fit is the degree to which your product or service satisfies market demand. The ultimate goal for any business is to provide an offering that meets a real customer need and does so in a way that is better than the prospect’s alternatives.
Businesses start out with a value proposition that they hope will address a prospect’s pain points or gain points they have yet to consider. Initially, the value proposition represents a series of untested hypotheses. As the business gathers evidence that its value proposition is actually creating value for customers and getting traction in the market, product-market fit endeavors to remove the friction to enable a smooth exchange of value between the business and its customers.
When using a business model canvas, product-market fit means that the customer-facing blocks of your business model canvas (value proposition, customer segments, channels, and relationships) are perfectly aligned.
Most businesses utilize a series of incremental prototypes known as a minimal viable product (MVP) to prove that their product or service is meeting customer demand. By creating an MVP, a business can get critical feedback from its target market. Testing an MVP with real customers helps the business gain insights into what works and what doesn’t before settling on a final solution. At the end of the testing and refinement phase, you should have developed a product or service that can help you achieve product-market fit.
Pricing Strategy
A pricing strategy is a model or method used to establish the best price for a product or service. It helps you choose prices to maximize profits and shareholder value while considering consumer and market demand.
Your pricing strategy is based on your direct and indirect costs, related to delivering a product or service, plus a markup to deliver a profit to the company. Effective pricing strategies leverage the prospect’s emotional bias to maximize profits and include different pricing based on customer type, available options, cash flow objectives, etc. You can see a full list of pricing concepts, strategies, and tactics in our advice navigator.
Distribution and Adoption Plan
Your distribution and adoption plan is essentially the channels that you developed in your business model canvas addressing five key points.
How will you raise awareness about the company and its products and services? For example, will you advertise on TV, go to trade shows, or engage in social media?
How will you help customers evaluate the organization’s complete value proposition? For example, does it involve educating the customers or third parties about your offerings?
How will you allow customers to purchase specific products and services? For example, will you sell directly to the consumer through a website or storefront or will it be indirect and involve distributors or affiliates?
How will you deliver the value proposition to customers? For example, will it be by providing a product or service that better meets their specific needs or to offer better or more convenient hours of operations?
How will you provide post-purchase customer support? For example, will you offer a guarantee or warranty, or will you provide technical support?
Go-To-Market Strategy Conclusions
The best go-to-market strategies address all four core components in parallel. While a go-to-market strategy is mostly a tool used pre-launch to achieve the highest return on investment, most businesses continue to measure their go-to-market strategy’s effectiveness post-launch, to continue to fine-tune their go-to-market strategy.
Do you have a go-to-market strategy for your upcoming launch?
