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Do you have these key components in your product’s GTM strategy?

14 Jul 2023
10 mins

Successfully launching a product or service and securing the investment needed to fuel your startup is like composing a captivating performance. The key piece that leaves investors wanting an encore is a well-crafted go-to-market strategy. So, let’s explore what matters most in your go-to-market strategy for your early-stage start-up seeking investment.

A GTM or ‘go-to-market’ strategy is a plan that outlines how a company will introduce and sell its products or services to target customers. An effective GTM strategy sets out who your ideal customers are going to be, defines a problem and articulates how your product solves it. Crucially, your GTM strategy sets out your initial business and marketing plan. 

Market Problem

The start-point for any GTM strategy is to clearly articulate the problem your product is trying to solve. This section should provide a concise description of the underserved market need, potential customer pain points and how your product or service addresses them.

It goes without saying; the problem must be validated by research, a market needs analysis and conversations with potential customers. 

If you can clearly document your market problem [that you’re trying to solve], it will underpin the direction of your entire strategy and keep everyone focused on the vision. 

"A strong GTM strategy will create a distribution channel that will help organisations reach the right people at the right time, ensuring the success of the product or service they are bringing to the market."

Javier Molina, Forbes

Product & Value Proposition 

Next up, how does your product solve this market problem or unmet customer need? This is where you provide an overview of your product, the key features you plan to go to market with and the potential roadmap for product development (although this is often tricky to plot until you’ve completed a few product feedback loops). 

Secondly, it is vital to clearly articulate the value proposition of your product or service, including its key features and benefits. This section should demonstrate how the product is superior to those offered by competitors and why customers should choose your product over competing alternatives (see below).

Summarising your product and clearly articulating its value proposition is possibly the single most important factor in any GTM strategy. Put simply, this is how you sell your idea to both investors and the market. Once you have documented this, it’s also worth going the extra mile and validating it with potential customers. If the market doesn’t get it, you can bet investors certainly won’t…

Competition & alternatives 

A GTM strategy wouldn’t be complete without an overview of the market category, which should include any established players and their market share, giant incumbents (large enterprises), and–often overlooked–competing alternatives: if your product didn’t exist, what would potential customers use (to carry out the same job)? 

Setting out a clear overview of the competitive landscape makes it easy for both your team and investors to understand where your product sits within the market. 

Whilst an overview of the competition is useful. Often your biggest competitor might not be another product, it simply might be the status quo. When our friends at Float started, their biggest competitor wasn’t another cash flow forecasting app. It was a spreadsheet … so their team had to convince potential customers to stop using Microsoft Excel and start using Float.

 

Audience identification 

Target audience identification is a crucial stepin developing a GTM strategy. It involves conducting comprehensive market research to understand your target audience’s jobs, needs, and preferences, as well as their major pains. This process might involve creating multiple personas based on different audience segments. By crafting accurate personas, you can then align your messaging and offer a proposition that meets their requirements.

During the early stages of start-up inception, it is challenging to “nail” your target audience. You simply won’t have enough insight from existing customers to validate your ideal customer(s). The most important factor to include in your GTM strategy is a general profile of your ideal customer (ICP). This clearly frames the type of person who experiences the problems your product solves.

Product positioning & messaging

Once you have defined your ideal customer, understanding their pain points, needs, and ideal gains can better inform your product positioning and messaging. By crafting compelling messaging that communicates the value and benefits of your product or service, you can resonate with both existing and potential customers. Effective product positioning entails defining your unique value proposition and competitive advantage.

The biggest mistake most startups make is making their messaging all about the great features of their product. Once you know which features are the most popular, you can talk about these. For go-to-market, messaging should be all about the value and gains your product provides over the competition. 

Pricing & packaging

Defining the pricing strategy can be challenging in the early stages of a startup when there is a limited to no customer base. However, it is a critical component of a GTM strategy that evolves throughout the business lifecycle. As a startup, you should consider your value proposition and the competitive landscape when determining pricing. A pitfall in this stage is overpricing. Whilst metrics such as lifetime value (LTV) and revenue per user (PRU) are important, striking the right balance is essential. Consider the value proposition and competitive landscape, and prioritise acquiring early adopter customers, even if it means sacrificing short-term immediate revenue.

Pricing for go-to-market has to be well thought out. It needs to be competitive within your category to appear credible, but it shouldn’t be a barrier to acquisition. At this stage, the goal should be acquiring as many customers as possible to prove product market fit and demonstrate the potential for scale.

Sales & Distribution 

Every GTM strategy needs to define the sales channels used to reach customers, such as direct sales, partnerships, online platforms, or third-party distributors. Relying solely on a single sales channel can limit your reach and hinder growth potential, so you should aim to explore and leverage multiple channels. For SaaS startups (for example), the sales and distribution channels require a distinct approach. SaaS startups should focus on leveraging online platforms, digital marketing, and inbound sales techniques to reach their target audience. Factors like scalability, cost-effectiveness, and accessibility should be evaluated while considering the unique characteristics of the target market. By strategically selecting and optimising the right sales and distribution channels, you can effectively engage your audience, drive customer acquisition, and foster long-term growth.

For many startups, distribution will primarily be online or direct. However, there may be the need to define other channels, such as indirect and/ or via partnerships. 

 

Marketing promotion and growth

Arguably one of the most critical elements of your GTM strategy is a clear marketing plan. It is essential for successfully introducing and promoting your product to your target audience. It involves summarising your primary go-to-market channels that will build awareness, engage your audience and convert customers. 

The marketing plan should also support and drive your predicted growth engine(s). In The Lean Startup, Author Eric Ries outlines the Engines of Growth; sticky, viral, and paid engines. These help startups focus on a small set of actionable metrics.

The sticky engine of growth focuses on the product and seeks to attract and retain customers through high engagement and customer loyalty.  The viral engine leverages the power of virality (not to be confused with network effects), whereas the paid engine of growth relies completely on investing in advertising (or paid channels) to acquire new customers. By nature, this is the costliest method so exploring how an organic strategy can 

support this may also be important for go-to-market. 

It’s important to realise that the three engines of growth are often used in combination, but for almost every successful start-up they will have a hypothesis on what is likely to be their most successful engine of growth. This should be predicted and articulated in any GTM strategy.

 

Customer Success

Neglecting customer success is another common mistake, as it is crucial for driving growth and retaining customers in any industry. A well-defined CX strategy should include a seamless onboarding process, personalised support, and ongoing training to ensure a positive customer experience. Regular check-ins, knowledge base and webinars contribute to effective customer support. Measuring customer satisfaction through feedback collection, surveys, and usage analysis helps optimise your product and enhance the overall customer experience. By prioritising customer success early in the GTM process, companies can cultivate long-term relationships, foster loyalty, and achieve sustainable growth. Retaining existing customers requires significantly less time, investment and effort compared to the multiple interactions required with new customers through paid campaigns, targeted ads, and sponsorships before making a sale.

What is essential in this step is making sure to include a clear plan to both nurture and learn from those early adopters [of your product]. These are generally people whose need is so great that they are willing to put up with the inconvenience of an imperfect product. Listening to their feedback will provide a tremendous opportunity for both future product development and growth.  

 

Goals and Performance Indicators 

The final component of any GTM strategy should be a set of early-stage goals & milestones or performance indicators. These set out the direction the startup plans to head and the metrics to which it will hold itself accountable.  

This section of a GTM strategy is essential for evaluating the effectiveness of your marketing and sales efforts and tracking the overall success of your product launch. It involves keeping an eye on some key indicators.

Measuring customer acquisition cost helps evaluate the efficiency of marketing and sales efforts, while churn rate indicates customer retention. Average order size provides insights into revenue generation, and gross sales reflect overall financial performance. Tracking your monthly active users allows you to gauge user engagement and growth. 

Some metrics like customer acquisition costs/ lifetime value as well as, monthly recurring revenue (MRR), annual run rate (ARR), cash runway, and aspects of virality may pose challenges in measurement due to limited data, evolving customer base, or resource constraints.  

 

It is crucial to prioritise measuring customer experience alongside marketing and sales metrics. By measuring customer satisfaction, through feedback collection and usage analysis, continuous improvement of the product can be achieved, leading to enhanced customer experiences, and increased retention. Understanding how customers interact with the product through analysing product usage provides valuable insights for data-driven decision-making. By prioritising customer success and leveraging these insights, companies can foster loyalty, build strong customer relationships, and achieve sustainable growth.

By understanding and monitoring these indicators, you can make informed decisions, identify areas for improvement, and optimise your GTM strategy to drive growth and maximise the success of your product.

A great method for setting our clear goals and measuring milestones is the Objectives and Key Results framework. Including 3 or 4 company-wide OKRs in your GTM strategy will demonstrate to investors that you have a clear roadmap for the go-to-market period and that their investment will help you achieve these milestones.

Crafting an effective go-to-market strategy is key in ensuring you feel more confident ahead of approaching investors. Aside from making you investor ready, a great GTM strategy is the cornerstone of a successful product launch. By incorporating and successfully executing these key components, you can set your startup on the path to sustainable growth. Investing in this crucial early-stage resource will enable you to captivate investors, resonate with potential customers, and propel your startup to success.

Tagged in Start-ups and Strategy

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