Startups are built upon new product launches, and they serve as key drivers of growth for existing companies. A successful launch can reap huge rewards, but on the flipside, a failed launch can ruin your business.
A solid go-to-market (GTM) strategy can increase your chances of making your next product launch a success. Additionally, by following a structured path when creating your go-to-market strategy, you can identify when it’s time to pivot from or scrap an idea early on, avoiding unnecessary losses.
In this piece, we’ll provide you with a 10-step process to design your own GTM strategy that focuses on customer needs and market demands.
At a glance: How to build your own go-to-market (GTM) strategy
- Identify your “market-product fit”
- Quantify your value proposition
- Understand your market position
- Select a pricing strategy
- Choose a sales and distribution model
- Design a marketing plan
- Prepare your support team
- Select KPIs to measure progress
- Embrace feedback loops
What is a go-to-market strategy?
A go-to-market strategy is a strategic plan to launch a new product or service or enter a new market with an existing product or service. Having a strategy allows you to focus your limited resources in the right areas to maximize your chances of a successful product launch.
To avoid costly mistakes down the road, you should begin the development of your GTM strategy at the beginning of the product development process.
Benefits of having a go-to-market strategy
Now that you know what a go-to-market strategy is, let’s take a look at some of the specific benefits.
- Reduced time to market: An effective go-to-market strategy helps you ship quality products faster.
- Increased focus and direction: Product launches are complex, hectic, and involve a variety of stakeholders. A well-defined GTM strategy helps keep everyone focused and rowing in the same direction.
- Enhanced customer-centricity: A good GTM strategy will focus on your potential customers. As a result, your product will be purpose-built to meet their needs.
How to create your own go-to-market strategy
With an understanding of the “what” and the “why” behind a GTM strategy, we can dive into how to create one. It’s important to understand that the specifics of your industry, target market, and business size will play a big part in how you execute a go-to-market strategy.
However, the steps below will provide you with a framework for developing a strategy that is applicable across industries, markets, and organizational capabilities.
1. Identify your “market-product fit”
That isn’t a typo.
You’re probably familiar with product-market fit, but Reforge CEO Brian Balfour’s market-product fit model is an even better starting point for your go-to-market strategy.
Market-product fit hinges on answering specific questions about the problem your product will solve.
After defining a general market, you need to answer these questions:
- What category does your potential customer place your product in? Answers to this question range from business intelligence software to consumer electronics to professional services.
- Who are your potential customers? Are you targeting executives in the financial services industry, channel sales teams, or stay-at-home parents? When you clarify exactly who your customers are, you enable yourself to optimize your product to solve their problems.
- What problems are your potential customers facing? Financial services executives might want more granular information on an expanding market. Maybe channel sales teams need a better way to qualify leads. Alternatively, those stay-at-home parents may want a way to keep their kids safe online.
- What motivates your potential customers to care about those problems? Are the financial execs looking worried about the next recession, or looking to expand into new markets? Sales reps want to drive sales, but is that because they want more money or because they’re competitive? Parents are concerned with their children’s safety, but what online threats worry them the most? If you understand the motivating factors driving your potential customer, you can optimize your product to meet their needs.
When you identify a problem and then design a solution, you significantly increase your chances for success. If you create a product and then look for a market, you’ll be a solution looking for a problem.
Pro tip: Your team should nail down market-product fit early in the development of your go-to-market strategy. Just how important is getting market-product fit right? CBI Insights found that 42% of startups fail because there was “no market need” for their products.
2. Quantify your value proposition
A well-defined market-product fit will logically flow into the next step in the go-to-market strategy creation process: quantifying your value proposition.
A value proposition explains to your potential customers why they should buy from you instead of your competitors.
The key here is that the messaging targets your customers. Your value proposition must be concise, clear, and consistent. It must explain the why behind your product from the customer perspective.
Pro tip: Be concise. Your value proposition should be a few sentences at most. You can get into the details with your content marketing, but your value proposition should keep things simple.
3. Understand your market position
Are you an industry giant launching a new product or a startup no one has heard of before? Understanding how your target audience views your brand can better inform your marketing decisions to come.
Customer perceptions are important. If you’re an established brand known for luxury, trying to compete on price in a new category may do more harm than good. Similarly, if your customers view you as the “cheaper alternative to X,” launching a premium service will be an uphill battle.
Pro tip: Emphasize what makes you different. Whether you’re an established player or a new market entrant, lean into your brand’s unique advantages in your messaging.
4. Select a pricing strategy
Your pricing strategy influences your profit margin, market penetration, and brand image. Getting it right can mean the difference between capturing a large market share or failing to gain traction. There are a variety of pricing strategies to choose from.
Some of the most common are:
- Penetration pricing: Setting prices extremely low to capture market share. Generally, prices are raised after a significant market share is captured.
- Price skimming: Setting prices high to begin with, then lowering them over time. Price skimming enables you to maximize profits early on, and then appeal to more cost-conscious consumers down the road. This strategy is common with consumer electronics like TVs and gaming consoles.
- Economy pricing: Also known as “no-frill pricing,” economy pricing aims to keep costs low and attract price-sensitive customers.
- Premium pricing: Charging a premium for your product. This pricing makes sense if you are positioning your product as a premium or luxury product. The Payless Palessi experiment is an excellent case study here. Payless put together an influencer event and priced standard Payless footwear around 10x normal prices. Not only were they able to sell the shoes, they impressed the influencers with their quality. Premium pricing coupled with the right presentation can enable you to sell normal goods at higher prices.
Pro tip: Remember that psychology plays a huge role in pricing. J.C. Penney learned this the hard way with its everyday pricing experiment.
5. Choose a sales and distribution model
Choosing the right sales and distribution model for your product is another important part of a go-to-market strategy.
What makes the most sense for your product will vary significantly depending on your market. You may choose to sell directly to customers, focus on B2B sales, use resellers and distributors, or a combination of both.
The important part is to select an option that makes sense given your logistical capabilities and sales expertise. You also need to consider the complexity of your product.
Simple products that explain themselves allow you to take a “self-service” approach to the sales process where consumers choose their products and check out on their own. Slightly more complex products may require an inside sales team to educate consumers and help drive sales. Highly complex products may necessitate a team of sales engineers that can architect solutions for your customers.
If you’re entering a new geographical market, it’s important to consider more than just sales techniques. Salespeople who understand the market, as well as your value proposition, will be vital to a successful launch.
Pro tip: Harvard Business Review found that, on average, there are 6.8 people involved in the purchase of business-to-business (B2B) solutions. This is important to understand, particularly for enterprise sales. To be a good salesman, you need to understand all the people involved in your customer’s purchasing decisions and build your sales model around them.
6. Design a marketing plan
To compliment your sales model and boost your sales pipeline, you’ll need a strong marketing plan. For your go-to-market strategy, you’ll need a laser focus on your target audience and messaging that highlights your value proposition. From there, you can build out your social media marketing, advertising campaigns, and SEO and content marketing effectively.
Pro tip: The right CRM software can help you get the most out of your sales and marketing efforts. For example, HubSpot enables you to effectively track and quantify leads as well as optimize your sales funnel. Alternatively, Insightly provides a robust suite of marketing tools including smart lead routing to get the right lead to the right rep in a timely fashion.
7. Prepare your support team
Customer service and support is a key differentiator for many brands. As Zappos, now owned by Amazon, has shown, this holds true for even non-technical products and services. An unprepared support team can trip up an otherwise successful product launch.
A well-prepared customer support team is a sign that you care about your customers and their success. As part of a go-to-market strategy, it’s important to make your support team a part of the product launch. This means training your customer support reps and providing them with documentation before your product reaches customers.
Support issues can be easy to overlook before you go to market — this isn’t exactly the most exciting step — so it often gets ignored. However, you should keep in mind that a strong support team leads to happier customers and more repeat business. In a world where subscription models are becoming more and more common, customer success is more important than ever. Even simple tasks that can be automated, like a follow-up email to confirm an issue a user contacted support about is resolved, go a long way.
Additionally, customer support can enable product and marketing teams going forward. Advocates for what is known as “voice of the customer” — a term that describes the process of diving deep into customer expectations, needs, and preferences — often come from the customer service team. Given the opportunity, customer service reps can provide insights that help improve your overall product offering in the long term.
Pro tip: For complex products likely to generate support tickets from customers, ZenDesk is a popular CRM choice. It integrates ticketing, a robust knowledge base, and traditional CRM features all in one Software as a Service (SaaS) offering.
8. Select KPIs to measure progress
You get better at what you measure. To ensure your product launch is successful, your go-to-market strategy should include well-defined objectives and KPIs (key performance indicators) to measure progress.
One of the major benefits of measuring KPIs is accurate sales forecasting. However, KPIs directly related to sales certainly aren’t the only thing to keep an eye on. You need to continuously track metrics that indicate how customers feel about your product. Of course, tracking costs and customer value are important as well.
Common KPIs to consider include:
- Net Promoter Score (NPS)
- Subscription renewals
- Lead-to-customer rate
- Customer acquisition cost
- Customer churn
- Lifetime customer value
Pro tip: There is no one-size-fits-all answer to the question, “How many KPIs should I use?” However, PricewaterhouseCoopers’ suggestion of 4 to 10 for most companies is a sound rule of thumb.
9. Embrace feedback loops
Successful products are often a result of iteration. The likelihood that your first launch is flawless is slim to none. As part of your go-to-market strategy, have a plan to gather customer feedback and iterate your product over time. By quickly adapting to market demands, you can gain a competitive advantage over time.
Pro tip: Using your CRM, social media accounts, and customer service team to capture voice of customer data is important. How important? Research by Aberdeen has shown that companies that are good at capturing “voice of the customer” data are 89% more likely to use it in product development.
Effective go-to-market strategies are customer-focused
Keeping the customer in mind is an important part of developing your go-to-market strategy.
The process begins with identifying a real-world customer problem and builds from there. Your sales, marketing, and support efforts throughout your product launch should remain customer-focused to ensure your product remains relevant.
After a successful launch, embracing customer feedback and iterating over time enables you to stay ahead of your competition.
The Motley Fool owns shares of and recommends HubSpot, Salesforce.com, Shopify, and Zendesk. The Motley Fool has a disclosure policy.