Go-to-market strategy (abbreviated GTM) is an action plan that outlines how an organization will reach out to customers and achieve a competitive advantage in their industry. GTM serves as the blueprint for a company that highlights how it will deliver a service or product to its customers. The goal of any business is to highlight the value of their products or services for their target market and nurture customer relationships in order to gain a competitive advantage. The most effective way to do that is by developing a go-to-market strategy. What is a go-to-market strategy, what purpose does it serve, and how is such a business strategy developed? Below, we will provide the answers to the questions and more.
Go-to-Market Strategy Defined
A go-to-market strategy or GTM strategy is an action plan that identifies how an organization will reach its target market and gain a competitive advantage over other organizations in the same industry. Essentially, a go-to-market strategy serves as a blueprint for how a company will deliver a product or service to its customers.
Fulcrum-Tip: This strategy takes several factors into account, including pricing of the products and services it offers and the distribution of those products and services.
A go-to-market strategy shares similar qualities as a marketing strategy; however, the former is narrower in scope than the latter. Below is an explanation of how a marketing strategy and a GTM strategy differ:
Marketing strategy. A marketing strategy focuses on what a company is selling and who it should sell to. It usually involves two main functions of a business:
Development through product marketing in order to communicate the requirements for marketing channels to develop content that can be used for selling goods and services.
Direct sales to develop a pipeline that can be used to close opportunities.
Go-to-market strategy. Focuses on how a company will place the products and services it offers into the market in order to reach market penetration, develop revenue, and meet expectations in terms of profitability. A GTM strategy is a subset of a companys marketing strategy. Though a GTM strategy focuses on developing a competitive edge and figuring out how to reach a target audience, it is not a specific event, such as a product launch; rather, this strategy focuses on the entire lifecycle of a product or service from concept to completion.
Factors that Drive a GTM Strategy
When a company seeks to develop a go-to-market strategy, it should focus on three vital factors:
The target market. Customer relationship is a vital element of a GTM strategy. Delivering an outstanding customer experience will create loyalty, which leads to more purchases of a product, better retention of customers, and decreases the cost of service.
The organization. It is also important that a company takes its mission into consideration when developing a GTM strategy. Encouraging employees to perform their best is a crucial factor that should be included in this business strategy. As such, identifying the vision of a company and the impact it is seeking to develop is vital in the beginning stages of developing a go-to-market strategy.
The competition. Having an awareness of an organizations competition is essential when deciding what products or services a company is going to offer. Collecting information that pertains to the performance of competitors within the market and what the target market thinks of the products or services the competition offers is crucial, as these elements help an organization define its objectives in gaining a competitive edge.
Developing an Effective Go-to-Market Strategy
A GTM strategy is developed when a new product or service is launched; however, as mentioned above, it is not a single event, but rather a strategy that follows the entire lifecycle of a product or service.
The following steps can be used to develop an effective GTM strategy:
Define the target market. First and foremost, an organization needs to define its target market when developing a GTM strategy. Despite what a lot of business owners may think, the products and services that they offer are not for everyone. In other words, there are certain groups of people that will benefit from what a company offers, and there are other groups that will not find any benefit in those offerings. The group that the products and services a company offers will best serve is called a target market. The answers to the following questions can help a company determine its target market:
Which demographic will benefit the most from products and services?
Which market is the easiest to reach and at the lowest cost?
Is there a market that a low competition?
Identify target customers. After the target market has been determined, a company should identify its target customers within that market. This includes who those customers are, what their behaviors are like, and what their experiences are. The better an organization understands its customers, the more successful the GTM strategy will be. The answers to the following questions can help identify target customers:
Is there a problem that a product or service could solve?
What would be the ideal customer experience?
Who is the specific end-user of a product or service?
Identify brand positioning. It is important for companies to determine how their brand is different from competitors and figure out where is sits in a specific market.
Pinpointing the offering of a product or service. Also referred to as a Unique Selling Point or a Unique Value Proposition, this should focus on the main features of a product and its points of interest. These points should set a company apart from its competition.
Selecting marketing channels. Marketing channels incorporate inbound and outbound marketing strategies. Inbound channels include blog posts, social media updates, podcasts, email newsletters, and videos that are shared online. Outbound channels include direct mail, telemarketing, and other traditional forms of advertising.
Fulcrum-Tip: By choosing the best marketing channels, a company can effectively reach its target market and thereby increase its success.
The Bottom Line
Developing a go-to-market strategy is a viral element that should be associated with the introduction of new products and services that a business offers. An effective GTM strategy can improve customer experience, establish a better competitive edge, and increase the overall success of a company. Given the benefits that a GTM strategy can provide, it should be an element that every company focuses on when introducing new products into the market.