Go To Market Strategy: the hardest simple thing to do.
A Go To Market strategy can be defined in simple terms.
When you look at the business literature today, Go To Market has become this all-encompassing term spanning all functions that have direct contact with the buying ecosystem. It includes the obvious: sales, marketing & communications. When they exist, it also covers partnerships & alliances, customer success, and services (think implementation services in SaaS businesses). It is not uncommon to see customer support be part of it and, for the lucky businesses that can afford to have such resources, revenue operations will be included as well. This happy bunch is also closely tied to the product organization that envisions and builds what they will go to market with. All these groups have distinct roles, metrics, and timelines but need a common vision to rally behind. This is where a GTM strategy kicks in.
Simply put, a GTM strategy is a set of tentpole decisions that should help the company achieve commercial success - which is defined as the ability (and track record) to sell consistently at a profitable price point to customers with whom you can do repeat and expanding business (ie who stick with you and buy more over time).
A successful GTM strategy translates into revenue growth. The formula for growing revenue is, for all intents and purposes, not rocket science. It goes like this:
Revenue growth = acquire new customers x keep existing customers x increase revenue per customer.
This sounds simplistic but the more you can keep the equation simple the more likely you are to solve it.
There is a method to go about it.
Your GTM strategy will comprise six core elements: market, product, business model, message, channels & activities, and measurements. What you need to figure out for each of these pillars will vary based on the maturity of the company and the challenges at hand. If you are early in your journey the #1 aspect to figure out is product market fit. If you are further along in that journey you will probably wonder about expanding everything. Regardless of where you are in your development. you will be constantly adjusting those knobs to find what works now.
Let’s define those six elements and how to tailor them for your business.
In this 6-part series starting with the post below, we wanted to share our experience building GTM plans for multiple companies: what good looks like, what pitfalls to avoid and what to focused on. We reference the software business repeatedly. Some examples are unique to this market but most lessons apply universally.
Part 1: Identifying who you are selling to
Your market is who you are serving and will ultimately buy your product or service. There are two layers to it, the system level and the company level.
At a system level, what are the forces that are applying pressure to the players in your market. Some are evergreen (eg race to profitability and efficiency), some are more cyclical (eg technology or regulatory disruption) but they all pose problems that your potential buyers have a hard time solving. Note that the best problems for your business are important, frequent and urgent to your customers. Ideally you can define what the costs (money, resource, time, reputation) of those problems are and how your customer is currently handling them (eg workarounds, home grown tools). It will help you later define both your price and your message.
Ideal customer profile, a directional concept
At the company level, what is the description of the organization and they key people you want to interact with in order to get their business.
Starting with the organization, what is its ideal profile? Yes, we are talking about ICP (Ideal Customer Profile) here. The concept of ICP is far from new. If you research what it is, ICP has become this almost mythical creature the definition of which will make or break a business. The reality is way more nuanced. First, you can serve multiple ICPs. Second, the level of fidelity of your ICP definition will get better over time. When you start, your ICP is an experience-informed thesis. Over time, as you accrue data on what works and what does not, you will refine your understanding of what “ideal” really means, what part of the customer organization x-ray really matters. There is no shortage of ICP frameworks available online to get going, here are the important dimensions for your to consider: firmographics (eg industry, size, stage, geography, toolset, spend), team (eg need to have a product group or an full time admin), triggers (eg new hire, bad press, product launch), no-gos (eg specific standard compliance, geography). Being clear on what is not your ICP is at least as important and detailing what is. Write down your ICP definition as you know it today, it will give you a baseline to work off of and refine over time.
Persona definition, useful to a point
From a people standpoint, who will get involved in the buying process and the ongoing use of your product. This is where you want to describe the infamous persona and their typical buying process.
In terms of persona, you will generally encounter 4 types: user, buyer, influencer & champion. Sometimes they are separate human beings, sometimes they are the same person. The champion typically is a user (ie I want my day to day job to be easier) or a sponsor (ie an executive who is pushing for transformation). What you want to know about them is what their titles are (so you can find them on LinkedIn or Zoominfo), what their direct painpoints are, what their goals are (ie what metrics they need to hit) and what their place in the decision chain is.
Their buying process is, well, how they buy. In B2B contexts it is hardly ever a straightforward thing. What matters here is to understand the main phases of their journey (eg education and exploring options, building the internal case, instrument a decision, buy) and which of your persona is most important when. It will help you build the talk tracks and content to support each phase and design your own sales process that you will then be able to manage. We will get back to that in the measurement chapter of this story.
Similar to ICP, your understanding of personas and their buying habits will get better over time so start simple and build from there.
Put it all in the perspective of the market size
In parallel, as you are developing your ICP, you have to determine how big the market is. One of the most overlooked steps in a GTM strategy effort is to step back and wonder if there are enough companies ready to buy my product
It usually is an exercise performed when a company tries to raise money. You may have seen pitch decks with the almighty TAM - SAM - SOM trio. But this notion is never addressed again. The important part of the market size definition is its order of magnitude and how much you can realistically expect to win over the next 1 to 3 years. That will help you determine if there is a ‘there’ there. The useless part of the market definition is to over rotate on analysis to get to a hypothetical hard number. In most cases none of those numbers is peer reviewable. What they are really valuable for is the validation and prioritization of your target markets.
It can’t be an internal process only
The most important piece of process and methodology when it comes to defining your target market, ICP and persona is to talk to real people outside of your company. If you treat it as an internal intellectual exercise you will get: a biased view of the market (of course there is great business there because we are in it!), an inaccurate understanding of what matters to your target buyer/user (of course they need that because we built it!) and how they buy (of course they will purchase it because we are offering it!).
Your team’s input is critical to form the thesis you want to validate through research, but it can’t be the end all be all. Also, don’t just talk to your customers. Sure, they have a great perspective on what they do and why they bought your product but there are far more organizations out there that did not buy from you and you need to know why. So talk to your customers, go on your competitor’s websites / find their customer logos and stalk their people on LinkedIn, hire the services of an expert marketplace (think GLG, ThirdBridge and the likes), ask your investor for support or their investment thesis research, etc. Once you have enough conversations you will see patterns emerge and this is what you need.
Finally, make sure to time box this market definition step. There is a risk to turn this part into an endless research effort. Don’t forget the fundamental question you want to answer: who do we need to target to sell more, faster, over and over again. Experiment, move fast, get signal, and iterate.
Next up: define what you are selling. Leave your email at the bottom of this page to get this and future posts from Facta.
Ari & Frederic
Why Choose Facta Partners?
The Facta team has been servicing growth for over two decades. We will help you define what growth means to you, set the strategic direction to approach it, allocate resources to support it, design processes to deliver it and make sure your team and board are excited about it. We don’t stop at crafting the plan, we also help you to deliver, in the trenches.
Why Facta? Because we have done it, from Series A startups to Fortune 100 enterprises across industries. We have been operators, with people to lead, departments to align and boards to please. We know what works, what doesn't, why and have distilled those lessons into a methodology with a clear point of view.
We are your throughline to what’s next.
