go-to-market strategy

What is a go-to-market strategy?

A go-to-market strategy (GTM strategy) is an action plan that specifies how a company will bring a new product or service to market while reaching its target customers. The purpose of a GTM strategy is to provide a blueprint for delivering a product or service to the end customer, taking into account factors such as promotion, cost effectiveness and distribution. A GTM strategy is somewhat similar to a business plan, although the latter is broader in scope and considers additional factors like funding.

Organizations can use a go-to-market strategy for a range of events and services, including launching new products or services, introducing a current product to a new market, and even relaunching the company or brand. A GTM strategy can help a business clarify why it's launching a product, understand who the product is for, and create a plan to engage with the customer and convince them to buy the product or service.

GTM strategies typically include the creation of target market profiles, marketing campaigns and distribution strategies. Both direct and indirect channels are used to support, distribute and scale the product or service.

Having an effective GTM strategy lessens the risk involved in introducing a new product or service, as it's designed to heighten an organization's market awareness.

What's the purpose of a go-to-market strategy?

It can be difficult for a new product or service to get noticed, let alone be successful, when entering a market. The purpose of a go-to-market strategy is to have a set plan for how to effectively bring that product or service to market with as little risk involved as possible. Effective GTM strategies include knowing the target market and anticipating potential challenges. For example, a GTM strategy can be used to identify marketing channels with the highest potential for return on investment. Likewise, it also covers product positioning, the logistics of sales channels and product distribution before a product launch.

To create an effective GTM strategy, organizations must understand the work environment and the target market. New and existing workflows should be clearly defined, and a system should be established to manage the GTM strategy.

When effectively executed, a GTM strategy can align all stakeholders and establish a timeline to ensure each stakeholder meets the defined milestones and outcomes, creating an attainable path to market success.

While go-to-market strategies are often associated with product launches, they can also be used to describe the specific steps a company needs to take to guide customer interactions for established products.

Core components

A go-to-market strategy often includes the following five core components:

1. Market definition. Which markets will the organization target to sell its product or service?
2. Customers. Who is the target audience within these markets?
3. Distribution model. How will the product or service be delivered to the customer?
4. Product messaging and positioning: What's being sold and how does it differ when compared to other products or services in the market?
5. Price. How much should the product or service cost?

Market definition. This step identifies the specific markets or groups of people that can and will pay for a specific product or service. The markets should be specific and clearly defined, but they should also involve a large enough audience to meet the income and profit objectives of the product or service. If multiple markets are targeted, a primary target should be identified and clearly communicated.

Customers. This component takes the information and research gathered to define the market and uses it to increase specificity and determine the target audience for the product or service. The company must decide whether it has existing customers that might be sales prospects or whether it needs to seek an entirely new set of target customers. The company developing a GTM strategy and improving its customer acquisition process should also focus on who the buyer will be. For example, in a business-to-business (B2B) GTM strategy, the buyer could be the IT manager, a line-of-business manager or a member of the C-suite.

Customer segmentation is a common practice used to divide a customer base into groups of individuals who are similar in specific ways relevant to marketing efforts -- such as age, gender, interests and spending habits. Buyer personas should also be established to help a company understand how to market and sell to these various customer segments and to identify who the ideal customers are for the product or service. 

Distribution model. This component defines the channels or paths the product or service takes to reach the end customer. Indirect channels often become part of a product vendor's go-to-market plan. An indirect channel of distribution involves the product passing through extra steps between the manufacturer and the customer. For example, a product in an indirect channel might pass from the manufacturer to a distributor and then the wholesaler before it reaches the retail store.

Some questions to ask when defining channels include the following:

• How will customers go about buying the product or service?
• How and where will the product or service be distributed?
• If it's a physical product that will be distributed in a store, how will it get there?
• If it's a software product, how will the customer download it?
• Is the product or service on the organization's e-commerce site or is it sold online through a third party?

Product messaging and positioning. This component involves defining what the product or service is, what it does, how the target client will be made aware of the product, and how leads will be generated from both the current customer base and within the defined markets. The product message should answer how the offer addresses a specific need within the market and why customers should believe that it fulfills the need. A value proposition should be created that reveals how customers will receive more from the product or service than the monetary value paid for it and any additional costs. The product or service should also be differentiated from the others on the market to ensure it provides a unique value.

Price. This shouldn't be based on the costs of manufacturing or developing the product or service. Instead, the price should support the value proposition and market position of the product or service.

Building a GTM strategy

Go-to-market strategies require several key steps to be properly enacted. The objectives of a GTM strategy include the following:

• Creating awareness of a specific product or service.
• Generating leads and converting leads into customers.
• Maximizing market share by entering new markets, increasing customer engagement and outperforming competitors.
• Protecting the current market share against competitors.
• Strengthening brand positioning.
• Reducing costs and optimizing profits.

To fulfill these objectives, creation of an effective GTM strategy should include the following steps:

1. Identifying buyer personas.
2. Researching competitors.
3. Creating a value matrix.
4. Defining the marketing strategy.
5. Understanding the buyer's journey.
6. Selecting a sales strategy.
7. Syncing with support.
8. Understanding where the product sits in the overall roadmap.
9. Defining the success metrics.
10. Determining ongoing budget and resource needs.

Identifying buyer personas. This process includes identifying the target markets as well as the customer base and building an understanding of how to reach target clients and use the gathered information to achieve long-term goals.

Researching competitors. By researching competing products or services, an organization can better understand where it fits in an existing market. By looking at what competitors offer, researching prices and reading reviews, an organization can better understand what value its competitors bring to the table. This research also reveals information about what customers like and dislike about competitor product offerings.

Creating a value matrix. A value matrix is created that maps the product or service across business needs and defines the criteria used to judge the success of the offering. The value matrix is used to communicate the purpose and reason for the product or service to all stakeholders, including the specific customer need who is being fulfilled by each feature or process.

Defining the marketing strategy. When defining the marketing strategy, organizations determine their product or service's place within the market and set a plan to raise product awareness within the target market. This step might include testing different advertising methods for the target audience across various marketing platforms. Overall, the marketing strategy should include the following:

• Branding.
• Lead generation.
• Additional content.
• A marketing website.

Understanding the buyer's journey. After defining the marketing strategy, organizations must gain an understanding of the buyer's journey or the process each buyer goes through that ultimately leads to them purchasing the product or service. The buyer's journey consists of the awareness stage, consideration stage and decision stage. Companies should identify the potential journeys taken through the buying process from both the organization's and customer's perspectives.

Specifying the sales strategy. This step consists of creating a plan to introduce the product or service to the market. Some elements to include in the sales process include the following:

• Training support. How to train the sales team so they have enough knowledge to confidently sell the product or service.
• Tools and resources. This includes anything the sales team needs to identify, engage with and sell to customers, as well as manage these relationships and demonstrate the product or service.
• Client acquisition. Identify the best approach for finding customers.

Syncing with support. Next, organizations must align their sales and support teams to determine how they will assist customers with questions or issues. This step includes determining the following:

• The tools needed to build and manage relationships with customers, such as customer relationship management.
• All onboarding and support processes involved in helping customers understand how to use the product or service.
• Customer retention strategies that will be used to ensure customers remain loyal to the company.
• How to measure satisfaction and determine if the product and associate support is successful.

Understanding where the product fits in the overall roadmap. This step involves determining the priority that the specific product or service has over others within the company. This also includes identifying whether the product needs continued attention once released to the market or if the teams will move on to a new project. Identifying how the product fits into the overall roadmap involves understanding the priority for the development team, addressing how market feedback will be handled and identifying how stakeholders will stay notified of project progression.

Determining the success metrics. In this step, an organization must identify the primary purpose of the product or service and define how its success will be measured. The metrics used to measure success should be meaningful, measurable, motivational and easy to track.

Determining ongoing budget and resource needs. Once all the previous steps have been completed, the company must identify any ongoing budget and resource needs that will continue after the product or service has entered the market. This includes time and money spent on maintenance of the product or service, as well as any other factors that will affect the day-to-day lives of stakeholders.

Benefits of a GTM strategy

Overall, go-to-market strategies are used to create the following benefits within an organization:

• A clearly defined plan and direction for all stakeholders.
• Reduced time to market for products and services.
• Increased chances of a successful product or service launch.
• Decreased likelihood of extra costs generated by failed product or service launches.
• Enhanced ability to react to changes and customer desires.
• Improved management of challenges.
• An established path for growth.
• Ensured creation of an effective customer experience.
• Guaranteed regulatory compliance.

Go-to-market strategy examples

A change in an IT provider's overall strategic direction often prompts a change in its go-to-market strategy. New products or product strategies might also influence go-to-market approaches. Furthermore, a rethinking of services can also trigger a new go-to-market model. This has been seen with the following companies:

• Microsoft. When launching the Microsoft Surface laptop, Microsoft positioned the product to provide the functionality of a laptop while also offering the portable configurability of a tablet. It was targeted toward professionals, students and tech enthusiasts and its planned distribution channels included physical brick and mortar stores, online stores, as well as enterprise and educational sales.
• Cognism. Cognism is a B2B sales intelligence and data company that developed its own effective GTM strategy. It decided to target B2B companies in the technology, financial services and recruitment industries. It also wanted to expand to other countries to increase the size of its target market. Product differentiations included integration options and artificial intelligence and machine learning integrations. Sales strategies included sales through direct sales teams and channel partnerships. The company promoted itself through content marketing, digital advertising and account-based marketing techniques.
• Upscope. Upscope is an interactive screen-sharing platform that enacted a GTM strategy that targeted customer service advisors, technical support and onboarding specialists. It positioned itself as a product that doesn't require downloads from the customer side, with an emphasis on security and integration abilities. The product is marketed through direct sales teams, content marketing, digital advertising, referral programs, channel partnerships and the promotion of its free model.

Additionally, service-oriented channel partners -- such as cloud service providers and managed service providers -- can also devise GTM strategies. Their plans might include targeting vertical markets, customers of a particular market size or a technology platform, such as a specific public cloud or software-as-a-service offering.

Many different marketing strategies can fall under a GTM strategy. Learn more about different generative AI tools that can be used for marketing and sales.