What is a Go To Market Strategy?
How does your business connect with its customers? How do you deliver your unique value to your target customers? How do you go from the initial connection with a potential customer to the fulfillment of your brand promise?
The answer to these vital questions define your go-to-market strategy.
Your go-to-market strategy brings together all of the key elements that drive your business: sales, marketing, distribution, pricing, brand development, competitive analysis, and consumer insights.
It provides a strategic action plan that clarifies how to reach your target customers and better compete in your marketplace.
Go to market strategies can be applied to new product launches as well as existing products and services.
Benefits of a Go To Market Strategy
A go-to-market (GTM) strategy has numerous benefits. It helps your business:
- Reduce time to market
- Reduce costs associated with failed product launches
- Increase ability to adapt to change
- Manage innovation challenges
- Ensure effective customer experience
- Ensure regulatory compliance
- Ensure a successful product launch
- Avoid the wrong path
- Establish path for growth
- Clarifies plan and direction for all
Developing a comprehensive GTM strategy is an investment in time and resources, but it can help illuminate and ensure a viable path to market success.
What’s Inside Your GTM Strategy?
The goal of a GTM strategy is to improve key business outcomes. This is mainly accomplished by aligning to the evolving needs of your customers.
To create an effective GTM strategy for your business, you want to create a detailed plan with the following six ingredients:
- Markets: What markets do you want to pursue?
- Customers: Who are you selling to? Who is your target customer?
- Channels: Where do your target customers buy? Where will you promote your products?
- Product (or Offering): What product/service are you selling? And what unique value do you offer to each target customer group?
- Price: How much will you charge for your products for each customer group?
- Positioning: What is your unique value or primary differentiation? How will you connect to what matters to your target customers and position your brand?
If you can concisely and effectively answer these six questions, you’ll be in the position to formulate a winning GTM strategy.
An Example from Southwest Airlines
Southwest Airlines is recognized as one of the most innovative and trendsetting companies in the cutthroat industry of commercial aviation.
Southwest was so innovative, in fact, that many larger airlines and airports tried to prevent the company from getting off the ground in the early 1970’s.
Instead of using the traditional “hub and spoke” flight routing system employed by most major airlines, Southwest opted for a “Point to Point” system.
Most airlines have “hubs” in particular major cities where most flights connect through (think of a hub on a wheel with many spokes coming out of the center). Southwest’s Point to Point system takes passengers from one to another without using any hubs.
Only about 20 percent Southwest’s passengers are connecting passengers—the vast majority are local—making the point to point system more effective for their target customers.
This is just one example of how Southwest’s go-to-market strategy help the airline stay on top and deliver what its markets want most.
Before You Begin
GTM strategies, like any corporate strategy, is a matter of asking the right questions (and in the right order).
As a business leader, it is helpful to play the role of “strategic coach” and run through the following questions with your executive team:
- Where are you now? What is the current state of affairs in your business? Take inventory of your current business position and the current climate in your marketplace.
- Where do you want to go? What is the desired end picture of this new initiative? Define your ultimate vision.
- What has to happen to get you to your end picture? What strategic options are available to you? Determine the best solution paths to realizing your vision.
The main distinction between an overall corporate strategy and a GTM strategy is that the latter has a greater emphasis on connecting with your customers: sales, marketing, branding, distribution, customer touch points, and so on.
How Long Will Your GTM Strategy Take to Execute?
A comprehensive GTM strategy that includes a detailed analysis of your target markets, customer segments, budget requirements, offers, positioning can take several weeks (or longer) to formulate.
Successful implementation of a new GTM strategy can take 12 to 36 months.
It is important to keep in mind that a GTM strategy is a long-term approach to building profitability, decreasing customer acquisition cost, and enhancing the customer experience.
Key Objectives of Your GTM Strategy
Your GTM strategy has several strategic objectives including to:
- Create awareness of your offering
- Convert your initial customers
- Maximize your market share by encroaching on your competitors, entering new markets, and increasing customer engagement
- Defend your present market share against competitors
- Reinforce your brand position
- Reduce cost and maximize profitability
As an integral strategy for your long-term business success, let’s take a look at the seven key steps for developing your strategy.
Seven Steps to Creating a GTM Strategy
Here are the seven vital steps to formulating your strategy:
Step 1: Define Your Target Markets
No product is appropriate for every market. Clarifying your ideal target markets is a vital element to formulating your GTM strategy.
Factors might include demographics, psychographics, ethnographics, drivers of need, buyer personas, online/offline, and geography.
Remember you can’t profitably pursue every market so you want to determine where you can most effectively differentiate your brand and attract the most profitable customers who resonate with your offering.
Force yourself to sacrifice and focus on what matters most.
Start by brainstorming a master list of all possible markets you could pursue. Then, determine how you will assess each market opportunity. You may use metrics like market size, growth trends, ability to compete, barriers to entry, the economics of each market.
Consider:
- Which markets have the biggest and most urgent pain?
- Where are there gaps in the market?
- Which markets are most aligned with your corporate strategy?
- Which markets best match your core competencies?
- Which markets can you most easily reach?
- Which markets have the largest market size and least competition?
Next, assess each market for accessibility, alignment, and overall opportunity. Do what you can to test or validate each market opportunity with key stakeholders.
Review feedback from current and prospective clients as well as employees on the front line. Review trend data from available sources. Try using customer surveys and external focus groups.
Finally, prioritize your market opportunities and refine them on an ongoing basis.
Ultimately, you’re best opportunities will also attract your competitors, so defining your target markets is insufficient in itself.
You will still need to differentiate your offer and position your brand. But at least now you will have the confidence that you’re fishing where your fish are.
Step 2: Define Your Target Customer
Management guru Peter Drucker reminds us, “The purpose of business is to create a customer.”
The driving force behind this step is developing customer intelligence. You want to become masterful at generating actionable consumer insights through web surveys, focus groups, one-on-one in-depth interviews, in-store interactions, and more.
Here’s a list of questions that require thoughtful deliberation:
- Who is your business especially for? Who are your Brand Lovers? That is, who will be your most profitable customers?
- What human needs are you trying to satisfy in your target customers?
- What internal tensions are you attempting to resolve?
- What problems are you trying to solve?
- What is the ideal experience you’re trying to create for your target customers?
- What are the emotions you want your Brand Lovers to experience when they interact with you?
Your goal is to understand who your customers are, how they behave, and what they experience. The better consumer insights you have, the better chances you have for executing an effective GTM strategy.
Step 3: Define Your Brand Positioning
Brand positioning is the process of positioning your brand in the mind of your customers. If management takes an intelligence, forward-looking approach, it can positively influence its brand’s position in the eyes of its target customers.
We’ve outlined how to create a brand positioning statement here.
Step 4: Define Your Offering
Now define your product or the product’s unique value proposition. Understanding your product’s key features and benefits is the first step. Then you must understand exactly how your product connects with your customers: the context of their use, the solutions it solves, the benefits they derive.
Here are some key questions to bring clarity to your offering:
- What needs or tensions do your target customers need solved?
- Which features in your offering best address these needs?
- How will customers use it?
- What are important attributes or benefits of your offering?
- How is your offering differentiated in the marketplace?
To help determine the product’s unique value proposition, put yourself in your target customer’s perspective when you think about presenting your company’s offering. Consider:
- What do you want your customers to think?
- What do you want them to feel?
- What do you want them to believe?
- What do you want them to remember?
The better insights you have about your customers, the more effective you can be at defining your offering. This means you need to get to know your customers, to obsess about your customers.
Talk to them, listen to them, and get to know them. This step will also help you create more effective marketing messages later on.
Step 5: Define Your Channels
You link your offering to your customers through channels. Channels might include a retail store, Internet, a customer service call center, face to face salesperson, a trade show, a seminar, or a direct partner.
Amazon.com’s primary channel is its website. Walmart’s primary channel is its retail chain. BWM’s primary channel is its dealerships. LL Bean’s primary channels are its catalogs, call center, and website. AT&T’s channels include its authorized dealers (partners), independent retail stores, and website.
Your goal isn’t just to identify your channels, but to ensure that each channel is as seamlessly integrated with each other as possible.
Customers should be have a consistent brand experience no matter what channel or touch point through which they interact with you.
The key questions in your channel analysis are:
- Where do you reach your target customers?
- Where do your target customers buy?
- Where will you promote your products?
- What is the right distribution model?
- How do you develop the right distribution channels?
- Does the channel fit your offering?
- How does your offering fit with your target markets and channels?
- How would customers desire to interact with you?
- What level of interaction do your target customers require?
- Can you create a competitive advantage?
You want to make sure your offering fits your channel. For example, it is difficult to sell complex services or certain high-priced products over the web.
Step 6: Build Your Budget Model
Once you’ve defined your channels, you’re ready to build a budget model. Here you’ll want to define your product pricing and estimate costs associate with your GTM strategy.
To develop your pricing model, consider:
- What is the value your offering to your target customers?
- Are there existing price expectations?
- How do you price your product relative to your competitors?
- Is there a way to create a competitive advantage with your pricing model?
Channel economics is an important to consider. For example, most airlines, like JetBlue, charges a $25 booking fee when you book a flight over the phone while charging no fees for online booking. There’s little variable cost for web transactions, but call center representatives are expensive.
Your goal might be to develop a revenue model based on anticipated market penetration, average transaction size, number of transaction, and so on.
Consider:
- Based on your market definitions (step 1), what are your primary goals for market share penetration?
- What are your estimated margins over the next one-, two-, and three-year horizon, factoring in startup and ongoing expenses?
- What are the human resources requirements for the first year of execution?
To help mitigate risk, it is advisable to identify the economic, competitive, and internal risks associated with executing this strategy. Outline the biggest risks that may affect your ability to reach your goals and develop strategies to address how to overcome them.
Step 7: Define Your Marketing Strategy
Now it’s time to put all of the pieces of this massive puzzle together. You’re going to want to develop a unique marketing strategy for each target market you’ve identified in step 1.
Your marketing mix will be determined by your strategy in each market. Starting with your brand positioning, your goal is to create competitive advantages for your product offering.
To develop your marketing tactics, consider:
- How do you reach the economic buyers and influencers of your target markets?
- What messages will motivate them to consideration and purchase?
Keep in mind that your marketing objectives and strategy might change throughout the product lifecycle so be ready to adapt.
Be sure to measure and track your key performance metrics on a weekly and monthly basis so you can make adjustments to your strategies, investments, and human resources.
Now It’s Your Turn
As Sun Tzu said in The Art of War, “Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.”
An effective GTM strategy is based on the art of delighting your customers and surprising your competitors. Consider how hard Apple used to work to keep the the plans of their new iPhone secret until “the right moment” to go to market with their new product.
Once you are in the process of rolling out your strategy you won’t have time to plan as you’ll be more reactive due to your deadline pressures. Thoughtfully and thoroughly walking through these vital steps gives your organization the greatest chance of success.
Contact us to discuss how you can better prepare for what’s ahead. We can help you identify ways for your organization to tap into the power of cult branding, create value, and ultimately thrust your performance.
Best of luck in your go to market journey!