* This article summarizes a workshop we’ve been running with for years, focused around a favorite topic we feel most strongly about : The Go-to-market Strategy and it’s role in a young startup’s life.
It’s always a good idea to start with a story
Up until 1988, Nespresso (i.e., Nestle) were coffee-machine manufacturers. It wasn’t until a young guy named Yannick Lang joined the team that they started aiming for an entirely different target audience – private consumers. Lang thought 35-45 old coffee lovers might want to experience quality coffee in the comfort of their own home. And, as we all know, he was definitely right.
From that moment on, Nespresso had changed the 3 most fundamental strategy elements:
- The product (from coffee makers to coffee capsules).
- The market (from selling to businesses to selling to consumers).
- The sales and marketing channels (by selling the coffee capsules directly to consumers and starting Nespresso’s loyalty program).
These 3 key changes have led to Nespresso’s phenomenal success, and they are, in a nutshell, what we call a ‘killer’ Go-To-Market (GTM) strategy.
But enough about coffee, let’s talk about what Go-To-Market really means.
We define Go-To-Market as a strategic plan describing how to attain new customers and maintain existing ones, while supporting organizational growth and business goals. However (and this is the crucial part), the basics of any good GTM is a firm and clear connection between the product and its market, which brings us to what makes a successful GTM strategy –
It needs to be flexible, action-driven, and include reciprocal relationships between marketing, sales, and product.
Okay, but how do you know when you need a GTM strategy? It’s simple –
- When you don’t meet your business objectives.
- When you anticipate you won’t reach your goals due to recent changes in the market, in regulations, in competition, etc.
- When people in your organization cannot give a short and simple answer to the questions: “what does your product do?” and “who are your potential customers?”
So far, it’s safe to say that GTM strategy sounds like a pretty intuitive plan. So, where’s the catch? There are two main reasons why GTM strategy is hard to design and execute:
- Because everyone that knows marketing, product or sales, knows how hard it is to align these three functions and get them to work well together.
- Because in startups, the GTM process is often driven by the founders, who are usually too completely and utterly in love with their technology (i.e., their product) to notice anything else such as market, target audience, or customer pain points.
However, despite it being a challenging task, we all have to begin somewhere, and the first step is –
The very basis of every GTM strategy is finding the right relation between the product and the market, and start from the market. This point is tragically important, as many young start-ups start with their product, working their way down to the market. But this is a crucial mistake, as we hope to explain here.
#1 Start with the market
The first step to be taken in every GTM strategy is finding the right market for your product. This can get especially tricky for technology start-ups because when it comes to software, one product can potentially be positioned in various markets.
Going for the wrong market is a classic and painfully common mistake. In fact, it’s the main reason why start-ups are so often get stuck after a few successful pilots.
The ultimate example to emphasize this point is YouTube. This popular platform actually started out in the dating industry, offering singles to upload videos of themselves to find a date. Formerly known for using the slogan “Tune in, hook up,” the platform failed miserably. But it only took them 10 days to figure out there might be something wrong with their market-pick, and so they changed it to offer anyone with a funny cat to upload their videos and share them. This took them right into the multimedia -web market, and the rest is history full of cats and dogs and Britney Spears support fans.
But not everyone is that lucky…
#2 Target audience
After narrowing our markets down, now is the time to focus on potential customers, and more importantly, our ideal customers. And though a common misconception in the B2B space, it is not enough to target companies; you need to target specific people in those companies: the buyer, the user, and the influencer.
Once you know who your potential and ideal customers are, it’s time to learn everything there is to know about them. Because (and this is too often overlooked) companies are made of roles and positions, and these are occupied by people; real people with feelings and pains and frustrations and desires – they are your real target audience, even when targeting B2B markets. And only when you truly understand your potential customers, can you start talking to them, which brings us to –
#3 Messaging hierarchy
The messaging hierarchy is the basis of every content strategy in the company. It organizes the main messages and unifies them across the different departments so that everybody says the same thing in the same language. Why a hierarchy? Because the bottom part is the basic product description, which can’t (or shouldn’t) be changed easily. The next stop right above that is the value proof, describing why you should be trusted. Right on top of that comes the differentiator, explaining why your potential customers should pick you out of the competition, which brings us to the top part- defining your value proposition, which can vary more easily.
The second part of an excellent Go-To-Market strategy must be the planning, which helps us reach our potential customers, and actually sell them our product. Sounds like a plan, right?
#1 Defining our strategy
But in order to actually “get there,” we have 5 necessary stages to go through. For the sake of simplicity and space, here’s a (really) quick summary-
- Defining our business objectives (what we want to accomplish, in numbers!).
- Establishing our business model (how we plan to make money).
- Deciding on the best sales strategy (direct sales or channel sales; that is the question…).
- Building our pricing model.
- Determining what our best territories are (where we have the most chance of succeeding).
After defining (and redefining) our basic strategy, every function in the organization focuses on aligning their planning & strategy accordingly. However, when we’re talking GTM, we’re talking teamwork, and though every department should concentrate on their own objectives, there’s one place sales, marketing, and product should come together, and that is the joint marketing and sales funnel –
#2 Marketing & Sales Funnel
A pretty popular marketing methodology, this market & sales funnel helps define how the process of converting a potential buyer into an actual buyer – should work. Though it’s called “the sales and marketing funnel”, it’s really where the three functions – sales, marketing, and product – come together. Without getting too deep into an already widely common methodology, let’s focus on two essential points to remember here:
- By the end of this process, we need to be able to thoroughly and meticulously describe our customers’ purchasing process, as well as the channels and assets we are using at every single stage of that process.
- Different assets will be under the responsibility of various functions (sales presentations should be under sales, social media activity under marketing, product tour under product, etc.). And that is precisely why this funnel not only creates the customers’ process, but also regulates the connection between the different functions.
After planning the funnel, we also need to describe the process, which should result in a messy-looking but meticulously planned diagram, including everything from stages to responsibility, assets, and everything else mentioned above.
Managing GTM strategy
Behind every GTM strategy, there’s an incredibly detailed table of tasks for each of the company’s functions. It is a long and well-thought-of journey that should be defined, redefined, managed, and monitored proficiently and dedicatedly.
But when it’s done properly, it’s your ticket out of some of the biggest and most common failures in the innovative technology industry.
Have a specific Go-To-Market challenge to tackle? We’ll be happy to talk.