GTM Strategy Building 101
GTM Strategy (Go-To-Market Strategy) as defined by Google is “an action plan that specifies how a company will reach customers and achieve competitive advantage” (Google.ca Nov2015). Basically, a GTM Strategy is how your company reaches target customers by selecting the right sales channels.
A search on ‘GTM Strategy’ reveals several good presentations on the web. One example is Murray McCraig’s discussion at MARS in Toronto in 2013. He defines the key questions in four parts. These being: to define your target market (to whom to sell), the product/service (what to sell), how to reach the target market (sales channels), and where to promote the product or offering. These four are sound building blocks for a complete model.
Another excellent resource is a blog post provided by the Symmetrics Group in Atlanta, GA (USA). They include an triangle image that best captures the essence of what a GTM Strategy should address (see image on right). Symmetrics Group provides a great post for many of the details to help build your plan.
Beyond the four
To break your work up into manageable pieces, the following eight sections will help create a knockout GTM Strategy.
Define Your Product Offering
Even if you already defined the product or service offering in your business plan… reiterate it in your GTM Strategy. Make sure this is crystal clear to all who will be involved in launching, producing, supporting and rolling out your offer. Be as specific and tactical as possible. Your offering is what you will ultimately sell to a customer. If you are not clear about exactly what this is, then your customer will be even less clear. Lack of clarity will result in zero sales.
If you are selling a service – this starting point is particularly important. A product is typically contained and defined by the features in the software, or physical product. A service can be many things and can easily morph. Set boundaries, and clearly define (write out) what the exact service offering includes. This can be difficult – AND will help you stick to what you do best.
Identify Target Markets
Who can use your offering? Brainstorm to figure out all the different possible markets that you COULD target. After creating your list, figure out which ones are most likely to work out. Inevitably, you will have some which are possible – but which are just not viable. For example, I sell product and digital marketing consulting services in Toronto. I could sell to the tech sector in Sydney Australia. Even though I would love to do so, a 30 hour flight to visit my customers might price me out of the market.
Segment Target Markets
After choosing the target market or markets – segment them. Research segment sizes, attractiveness, and likelihood of success. For Marketing services targeting mid-sized firms – segments may be the verticals found in the nearby region. Segmenting into different target industries or verticals like medical, financial, high-tech, hospitality, and so on – will help frame the exact customer group you want. Now, estimate the size of the opportunity, and individual needs in each segment. Do not underestimate the ‘attractiveness’ attribute. Attractiveness refers to whether the segment is open to using your product, whether the industry is growing or declining, whether they have funds for your offering, whether your firm is known in that segment, and so on.
Beach-Head or Bowling Pin
If you are in startup mode it is important to figure out where you are going to start. Rather than going after several segments at the same time – choose one. Choose the one that will be the easiest place to start, has the most potential for your success, and which to which you can cater. A beach-head strategy means you start at this easy target market, make it a success, then expand (inland) to other markets. Here the objective is to land a few wins, establish credibility and momentum before moving to capture other markets. Selecting one target market segment at a time lets you focus and win, building your success momentum.
Bowling pin refers to the model defined by Geoffrey Moore – called “Crossing the Chasm” (see image above). A challenge for many startup tech firms was that they would create a product, gain early adopters, then they would die. They did not climb into high growth or general adoption mode. To get over this ‘chasm’ firms need to find a specific target market at a time to focus on winning (a bowling pin). After winning in one bowling pin (market or segment) they can add another, and another. Eventually they would have enough segment wins that their product had crossed that chasm from early adopter phase to the high growth mode. Since GTM Strategy is often created at the beginning of a product market launch – this bowling pin model can be important to your plan.
Define Route-To-Market (RTM)
Route-To-Market (RTM) outlines exactly how you will sell to a customer. Will your offering be sold on your won e-Commerce platform? Will you sell through direct salespeople? Will you sell through channel partners or Value Added Resellers (VAR – who add full service offerings)? Various options exist. The RTM diagram below simply shows an example of what these could be and how to conceptualize an RTM model.Establishing your RTM is important to help drive your activities in setting up your sales channels for success. For example, if you were to sell through channels, through a distribution partner – then various activities must be completely. You must establish a distribution agreement, research which partners are best for your offering, negotiate stocking, promotional and return terms, and so on. RTM’s also help you identify channel conflicts. If they exist, identifying them in advance will help prepare for how to resolve such disputes. Alternatively you may choose a simpler RTM plan that prevents channel conflict. Finally, the RTM plan will also help identify important metrics to consider to select your best options. For example, you may want to compare costs per channel, potential customer reach, sales effectiveness, support needs, and so on.
RTM Cost – Risk – Decision Model
A costing model for each RTM path is important to your GTM Strategy. Each sales channel option includes different fixed, and variable costs, reach potential and risks or probabilities of success. Channel partners may need a smaller share of the sales price than a VAR (Value Added Reseller). But, for technically complex products the VAR channel may be more effective at driving more sales. Including a distribution partner might give you immediate reach to thousands of channel partners. This could increasing your reach to tens or hundreds of thousands of customers quickly. However, that also means a distribution charge (percent of sales), stocking fees, advertising fee options, and so on.
Use the RTM paths including estimated costs, opportunities (customer reach potential), and risks for each path. This will help you choose that paths that make the most sense.
Channel Requirements & Selection
If you choose to sell through channels, then define your channel selection criteria. Like segmentation this will help you define a target audience with whom to communicate about taking on your product category. Defining your selection criteria helps maintain focus, and gives structure to your discussions with potential partners. These discussions are easier when the channel partner understands why you are reaching out to them. It also helps explain to a channel partner how they are distinct and will not be facing price competition from EVERY other possible sales avenue. Ultimately, channel partners will want to be selective to ensure they are selling the right products for their customer base. They also want to make sure they can do so profitably. These are important considerations when structuring your selection criteria.
Market Awareness Plan
A full marketing plan is not expected in a GTM Strategy. However, you should include a section outlining elements of your marketing plan for the specific routes to market. If you intend to use a direct sales team and your own e-Commerce system to sell – then your marketing plan will be common to both, as an example. Selling through channel partners, means you have to consider how to drive their awareness of your offering. You will also need to consider what channel marketing support will help your partners sell to their customers. Remember that when dealing with channels, VAR’s and Partnerships there are two elements to your marketing. First is the awareness campaign to get the partners to know about you and consider carrying your product line. Second is supporting them with co-branded marketing to help them attract their end clients.
Starting a GTM Strategy can be daunting. Hopefully these eight steps will make it easier to develop your own. Just approach it one small step at a time. If you need help with creating your firms’ new product offering GTM Strategy – please reach out to me. I am always pleased to discuss how to set your plan to help you succeed.
About the Author:
Charles Dimov is Consulting Director of Strategy D, a Digital and Product Marketing consultancy (www.StrategyD.org). He has 20 years of experience in High Technology, with 15+ years in Product Marketing functions – having successfully introduced over 80+ new product to global markets. Charles has a MASc.(MBA), BASc.(Eng), and a BA.(Econ), and loves Photography, Marketing Strategy, and rolling up his sleeves to drive market success. He can be reached at Charles@DimovStrat.com