Go-to-market (GTM) strategy, go-to-market plan, GTM process — whatever you want to call it — is a plan of action that details the steps you’ll take to define your ideal customer, plan your messaging tactics, and position your product for its big day: the launch.
With an effective strategy in place, you drive more adoption, make more money, your customers see better outcomes, your team gets a bigger morale boost, and you can launch just that much faster. Without a strategy, you’ll end up focusing on the wrong customers, or you might bring a product into an oversaturated market.
If your team believes a go-to-market (GTM) strategy is just positioning your product for launch that’s like saying a sandwich is just two pieces of bread with some stuff in the middle. There’s so much that goes into a product launch that it’s almost impossible to keep track of the work, but we break down what we think are the most vital components of a GTM strategy.
Six Components of GTM Strategy
Your GTM strategy should include a definition of your target audience, along with executional planning directives (coordinating tasks, assets, etc.). You also need to know about positioning/messaging strategy, pricing models, and sales. While we’re looking into the components of a GTM strategy, it would also help to know about distribution channel roadmaps, rollout cadences for alpha/beta/general availability, and most importantly details of the launches’ objectives and measurement plan.
1. Target Audience
Your target audience is a group of people who you think are most likely to benefit from and purchase your product. This audience could consist of people who share the same problem but work in different fields or are nothing alike demographically, making it difficult to market to them, let alone build a product around them.
It’s these woes that prompted product marketers to get more granular with their definition of a target audience. Savvy PMs came up with two tiers of customers: the ideal customer profile (ICP) and the buyer persona.
Ideal customer profile: Ideal customer profiles are fictional representations of the types of companies you want to purchase and use your product. The ICP addresses the average size of the company, the average revenue of said company, what industries it operates in, and, of course, the ideal location of this company.
Why the fan-fiction of your ideal customer? ICPs help you identify companies where you know you can win. Of course, you want lots of people to use your product, but if you target every single company on earth, you’re going to be stuck with unhappy customers and only a small sliver of satisfied customers that actually need your product. ICPs separate the metaphorical wheat from the metaphorical chaff, giving you a clearer picture of where to devote your marketing, sales, and engineering resources.
Buyer personas: Think of ICPs as the umbrella under which buyer personas exist. Buyer personas are hypothetical representations of the people (not companies) you want to sell your product to. Identifying these helps you tailor your product at an individual level as opposed to a company-wide level. Additionally, since buyer personas often contain information about what your persona is willing to spend, they help you price and package your products.
How people “see” your product is essential in selling it. Every buyer will have a frame of reference they’ll try to fit your product into, to understand its place in the world. Your job is to help shape that frame into the one most likely to drive a sale.
There are so many cases where bad product positioning is potentially lethal to a brand. Remember New Coke? Coca-Cola was losing market share in 1985, so they decided to rebrand their soda with a sweeter flavor to compete with Pepsi. It was called New Coke. It was a disaster. You can chalk it up to bad research, or ignoring the audience. But what it came down to was the public was not ready to give up the nostalgia behind traditional Coca-Cola, and the company failed to “read the room”. It was an emotion-based product positioning fiasco, with Coca-Cola losing almost $30 million in market share (in 1985 dollars).
So if you want to avoid being New Coke: conduct a thorough competitive analysis of your brand. Listen to your customers. Conduct extensive market research. Take extra steps to establish how you want customers to see you.
Start by determining how you want to position your product, which can be slotted into five different strategies :
Characteristics-based positioning - Apple will sell you computers based on their sleek aesthetic. The same character-based positioning applies to their phone and watches as well.
Pricing-based positioning - You don't buy a Kia because it's sexy — it's not a Ferrari. You buy a Kia because it's affordable.
Use or application-based positioning - Why is Adobe the first pick for graphic design software, used by 90% of creatives? Because you can do so much more with it than you can do with their competitor's product.
Quality or prestige-based positioning - Patek Philippe positions their watches at the high-end of the spectrum for a reason. They don't care that their watches aren't sold at Walmart. That's not their market.
Competitor-based positioning - Are you an Apple person or a Windows PC person? That debate has made for some interesting competitor-based position tactics from both sides.
Answering these questions will help you form how you want your product positioned, and the tactics you’ll use to get there.
3. Distribution Models
The distribution model defines how your product is going to be delivered to your customers and further defines the channels you’ll use to get your product into the hands of customers. Like the other components of GTM strategy, this one is crucial because it defines where you invest operational funds, how you develop your product, and how you market it to your buyer personas. There are typically two ways of reaching customers: direct and indirect channels.
Direct channel: A direct channel of distribution means you make a product and then sell it directly to your end consumer. This model often emphasizes the use of salespeople to help evangelize your product and get it into the hands of your consumers.
EX: Your product → your salespeople → end consumer
If you have the resources to do it — you’ll have salespeople, engineers, and marketing folks who can help your customers understand the value of what you’re selling. Consider this approach if you’re selling enterprise software, pharmaceuticals, and manufacturing equipment or if you’re trying to scale up your product launch for global markets. Also, without any intermediaries, most of the profit circles back to you.
Direct channel methods include Sales-led, Product-led, and DTC (direct-to-consumer).
- Door-to-door and telemarketing channels are sales-led. They’re sold because someone is directly responsible for selling them to the consumer, and the salesperson is making money based on those sales.
- A software company offering you a free product and hoping you’ll pay for the upgrade is product-led. The product is selling itself, and hopefully converting users later to paying customers.
- Amazon selling Kindles through their e-commerce site is direct-to-consumer - they’re selling their product directly to the consumer without VARs, distributors, or wholesalers.
- VARs are value-added retailers. They add an extra component to the product and then sell it at a higher price. Extended warranties are the most common VARs.
- System Integrators (SI) - SIs put together different components and then sell the package at a higher price. The simplest Si is when batteries are included in a product.
- Managed Service Providers (MSPs) - If your product needs IT or mechanical follow-up, an MSP can provide technical support - for a price that you may not see. the reason your software may be priced so high is that the product requires technical support from third-party MSP.
- Original Equipment Manufacturers (OEMs) - an original part for computers (most common) might be produced by your company but is sold as a package with the product to the consumer. For instance, your TV’s remote may be made by a third party, but it is sold with your TV, so it is considered the OEM part for your TV.
- Wholesalers - a wholesaler sells a bulk amount of products to a retailer, usually at a lower price than the consumer sees.
- Distributors - distributors handle the “distribution” of products to the retailers. They are responsible for shipping, timelines, and damage to your product. They make sure each retailer has the product they need.
- Retailers - retailers are the closest to the consumer, selling products to them in smaller quantities than they receive.
4. Product Messaging
Product messaging is the set of high-level strategic messages you use to motivate customers to buy a product. When done correctly, you can communicate the value, features, and benefits of your product without ever having to explicitly state them outright. In terms of strategy, you’ll want to lay out what your product is to your customers, the benefits your customers will experience when using your product, and how you’ll communicate all of this to your customers.
5. Rollout Phasing and Tactical Plans
At a more granular executional level, you’ll need to determine how to roll your new product or service out to customers. When will you ship to Alpha for early, highly-focused design feedback from a few trusted users? When will you roll out to a Beta for a wider, controlled test among a real-life audience to discover any final polishing needed? When will you open the product to general availability and make your big announcement? If you think about your launch in terms of simply the last step, you’re missing out on valuable opportunities to collect customer feedback about the product, your messaging, and more.
You’ll also need to determine the marketing channels you’ll use to promote your product. There are typically three buckets of channels: paid, earned, and owned. Paid channels are scalable very quickly and include things like social ads, TV ads, or sponsorships. Earned channels are when you use another person or company’s platform to promote your product via pitching, like press, partnerships, or analyst relations. Owned channels are the ones you have full control over, like your blog, website, or in-product-messaging (IPM).
Once you know the tactics you’re going to use, you’ll also need to develop asset plans outlining all the marketing copy and collateral needed to support those channels, and project plans outlining all the tasks between now and launch day to get everything live. GTM planning is a lot of work, huh?
6. Price and Packaging
The price component defines how you should price your product to stay competitive in its space. In terms of strategy, determining the price for a product helps you plan your business activities around projected ROI. Proper customer and competitive research helps you suss out optimal price points to maximize the revenue your product or service generates.
Then there’s the packaging component. Packaging defines how you’ll bundle your product according to your customers’ preferences, needs, and wants. Companies hoping to build a retail GTM strategy should pay close attention to their competitors in this space and run frequent customer surveys to define how to package their products for maximum ROI.
Both pricing and packaging can be determined through customer survey tools, such as the Gabor-Granger Pricing Analysis survey, Conjoint Analysis, and Van Westendorp’s Pricing Sensitivity Meter.
Why Yes, You Should Have a GTM Strategy — Here’s Why
Probably one of the most important parts of a go-to-market strategy is that it provides a roadmap for taking a product idea and turning it into reality. But beyond just helping you bring a product to market, GTM strategy helps you bring that product to market the right way. Without a GTM strategy, all you really have is an idea and a whole lot of hope.
Without a GTM strategy, all you really have is an idea and a whole lot of hope.
A GTM Strategy Means Quicker Time-to-Market
Time-to-market (TTM) refers to the length of time between product conception and when the product is finally released. The faster your TTM, the more revenue you can generate. A study from McKinsey revealed that if your product is six months late to market, it earns 33% less revenue compared to a product that launched on schedule or ahead of schedule.
GTM strategy helps you delegate tasks to their respective teams and gives everyone a 10,000-foot overview of the plan. Teams like marketing know their role and what they need to execute on during the messaging and validation stage of the GTM strategy. Executives know the launch plan and how to apply it to managing people. Sales knows who their ICPs and buyer personas are and how to talk about the product.
But, much to the joy (or chagrin) of some product managers, TTM isn’t defined by how much they can accomplish in an eight-hour day but rather how much cross-functional teams can accomplish in the span of a few weeks or months. For better or worse, GTM strategy is a team sport. Not having a strategy before going into a launch is like going into a game without a plan.
A Strong Go-to-Market Strategy Translates to Less Financial Risk
Good strategy work prior to launch tells you that you’re less likely to launch a product that’s a complete flop. There are some exceptions to this rule, but it follows that if you can verify product-market fit, do customer research, and price and market appropriately — you know, do your homework — you’re probably going to launch a more successful product than if you had just thrown darts at a board and made a few guesses as to what your loosely defined ICPs and personas want in a product.
With a GTM Plan, Customers See Better Outcomes
GTM strategies are, from the ground up, built around a customer’s wants or needs. After all, this whole mission you’re on started with you or your company trying to address a problem the customer is facing. When approaching a problem with strategy and planning, you can actually build your product, delivery, and pricing plays around the customer’s preferred pricing points.
With a GTM in place, you can now better equip agents in Sales and Support with background info on where the product is headed. Imagine your employees out on a sales call with no idea of how an update or feature or product works. New Coke.
A Go-to-Market Strategy Is Your Roadmap to Future Success
So let’s say your strategy goes off without a hitch, and you’ve got some loyal customers under your belt. If you want to iterate on that product or bring another product to market, your initial strategy work can be repurposed or, in some cases, translated to different product lines. And while no two launches can ever really be the same, regardless of tier, it’s safe to say that if you’re consistently launching products, you can enshrine good launch habits in your team members. That means having highly visible launch plans (that cross-functional teams are aligned on), transparency on launch dates and subtasks relating to strategy, stronger inter-departmental communication on what the launch is going to look like, and clearly defined ICPs and personas.
Two Types of GTM Strategies: Product-Led GTM and Sales-Led GTM
There are two approaches to go-to-market strategy: product-led GTM vs. sales-led GTM. How do you know which one is right for you? There are some factors that determine which approach you take:
- If you plan to hire salespeople, you should consider a sales-led GTM approach.
- If you plan to offer a free version of your product that users can freely download, consider product-led GTM.
Product-led GTM uses the product itself to acquire and retain users. That’s right, no salespeople (at least, not initially). Some famous examples of product-led GTM include Calendly, Slack, Atlassian, and Dropbox, which all launched without sales teams and then retroactively added them later in their product’s lifecycle.
Product-led GTM is awesome for some companies that JUST need to focus on the product. Startups have often embraced this approach because it lets them be more agile and responsive to changing customer demands. Sales teams, while highly valuable, are often seen as unnecessary in the early stages of product-led GTM.
Sales-led GTM uses marketing to generate interest in the product and sales techniques to get people to use it. If you don’t think your product is able to make an immediate impact and cement itself in the minds of your customers, sales-led GTM is exactly what you’re looking for. Sales-led GTM gives your company more resources for success because it employs salespeople and leverages the power of marketing to generate interest.
If you’re trying to sell to larger enterprises, sales-led GTM is often the best approach. The people who decide whether or not to buy your product are often stakeholders or are higher up on the corporate ladder and will need some additional convincing, ideally by a salesperson. Word-of-mouth marketing can only go so far.
Build a Repeatable Go-to-Market Strategy
Regardless of your launch size or tier, creating a go-to-market strategy is crucial for your launch’s success. In the present, it gives you a roadmap for success that goes beyond just sending a few emails to your prospective customers and buddies or posting a few blurbs on LinkedIn.
But most importantly, it helps you build a repeatable launch process for the future and enshrines good habits in your team that are harder to break when you launch again or when you build upon an existing product line.
It can take time to build out and operationalize a launch process, let alone launch a product. We get it. That’s why we built Ignition — a go-to-market software that’s built by experienced product managers for teams that don’t have a launch process or are done with data siloes and trying to cram their existing go-to-market strategy into tools not designed for product launches.
Test drive a demo today.