Go-To-Market (GTM) strategy serves as a critical roadmap for your business, guiding the journey from product development to happy financials. It's the strategy that a company uses to deliver its unique value proposition to the right customers through the right channels.
How big is your target market? How will you get your product into the hands of customers? Who are your ideal customers (ICPs)? Where do they live? What is their profession? What is their age? What do they do for fun? Where do they like to go to drink beer? Answering questions like these are part of setting up your GTM, which will feed into setting up your sales and marketing strategies.
What it Means
Your go-to-market (GTM) strategy outlines how you will bring your product or service to market and capture market share effectively. It involves understanding your target market, defining your value proposition, and determining the channels, messaging, and tactics to reach and engage potential customers. Key components of your GTM strategy may include:
Market analysis: Identify your target market segments, assess their needs, and understand the competitive landscape. This includes identifying the ideal customer profile and, if you're selling B2B, the different personas that will make up the buyer's decision making unit.
Market segmentation can be tough when done well, but being focused on who you're targeting now saves you from wasting resources on bad prospects down the road. One tip for B2B, if you use LinkedIn Ads (circa early 2023 at least), you can view demographic information about people responding to your content. This provides analytical evidence that you can use to confirm you picked the right target audience or reveal that your marketing is resonating with an unexpected audience.
Competitive research can be exhausting. First, you'll likely find that you weren't the first person to have this business idea and there are competitors at the top of your google search. They have great websites and seem to be months or years ahead of you in the marketplace, but the good news is that they probably aren't. Putting together a flashy website doesn't take much time or money these days and looks can be deceiving. A lot of companies are presenting products that they haven't even made yet. Second, be honest about who you consider a competitor. If you run a traveling carnival, you're not competing with Disney Land even though you're both "in entertainment." You should also realize that your biggest competitor is the customer doing nothing or accepting the status quo.
Value proposition: Clearly articulate the unique value your product offers to customers and how it solves their pain points. Let's say you're selling an energy efficiency product that saves customers $100/yr and you only charge $30. That sounds like a great deal, but if the customer asks you to prove it - can you?
Positioning and messaging: Develop compelling messaging that resonates with your target audience and communicates your value proposition effectively.
Pricing and packaging: Determine the pricing model and packaging options that align with your target market's willingness to pay. Does your price point provide enough margin for your sales folks negotiate big deals? What about when you want to run a holiday sale on your CPG product?
Marketing channels: Identify the most effective channels to reach your target audience, such as paid ads or search, content marketing, SEO, organic social media, events, etc.
Customer acquisition strategy: Define the customer acquisition funnel, including lead generation, nurturing, and conversion tactics. How will sales and marketing work together during the customer journey?
Customer success and retention: Plan strategies to ensure customer satisfaction, maximize retention rates, and drive upsells and cross-sells. Are your resources best spent ensuring there are zero defects in your product or ensuring that you respond lightning fast when a customer has an issue? Which will actually drive the better customer experience and the net promoter score (NPS)?
Why it Matters
A well-constructed GTM strategy is not just a "nice to have" - it's a fundamental piece of your business plan and strategy.
Customer-Centric Focus: A GTM strategy forces your business to adopt a customer-centric perspective. It makes you ask essential questions: Who are our customers? What do they need? How are they dealing with that problem now? How can our product or service meet that need? How much value will that create?How much value can we capture?
Competitive Advantage: Your GTM strategy helps to differentiate your offerings from your competitors'. It helps you carve a unique space in the market by focusing on your value proposition - the unique value that only you can deliver to your customers. Your unique value prop should be hard for competitors to emulate. It could be something like a technical moat you've built with intellectual property or it could be that your team is made up of highly valuable thought leaders. If you've created a new category and don't have any competitors, then hit the gas because they're coming!
Resource Optimization: A GTM strategy helps focus your resources where they can yield the highest returns. It provides structure and boundaries to eliminate guesswork down the road. It provides strategic, targeted actions and contextualizes the assumptions that the strategy is based upon. When you burn 50% of your ad budget on paid Google search with no results, do you haphazardly decide you're going to switch strategies and start spending on LinkedIn ads or do you go back to your GTM strategy and evaluate?
Sales and Marketing Alignment: A clear GTM strategy aligns your marketing and sales teams around common objectives and tactics. It clarifies who you're targeting, how you're reaching them, and what message you're conveying. This alignment eliminates confusion, improves collaboration, and increases the effectiveness of your customer acquisition efforts.
Revenue Growth and Sustainability: Ultimately, a GTM strategy paves the way for revenue growth. By ensuring your product or service meets market demands, reaching the right customers, and delivering a compelling message, you drive sales. By considering customer success and retention in your strategy, you're setting the stage for sustainable growth.
Consider the example of Slack, the popular collaboration tool. When it was launched in 2014, it didn't enter the market as just another messaging app. Slack positioned itself as a "smart alternative to email," targeting businesses that struggled with email clutter and disjointed team communication.
Product: Slack delivered a product designed around the users' needs – a real-time messaging, archiving and search tool that improved team communication.
Target Market: They initially targeted tech-savvy, collaborative teams in tech startups, where the need was acute, and they could quickly become advocates.
Product-Led Growth: Slack made its product as easy to use and adoptable as possible. The company offered a freemium plan that gave users a taste of the product, and it made it easy for teams to sign up and start using Slack without having to go through a lengthy sales process.
Word-of-Mouth Marketing: Slack encouraged its users to spread the word about the product to their friends and colleagues. The company created a "Twitter Wall of Love" where users could post positive messages about Slack.
Content Marketing: Slack published blog posts, case studies, and hosted webinars that highlighted the benefits of its product.
Pricing: Slack's pricing strategy was value-based, scaling from freemium for personal accounts to enterprise level packages.
Distribution: Slack used a direct sales model, leveraging their website and app stores for distribution.