How to Create the Go-To-Market Strategy for Your Product

By David Ronald

First, the bad news. 

Around 95% of new products launched every year fail, according to Harvard Business School. 

What does failure mean in this context? Well, in simple terms, it means that the revenues derived from the new product failed to have any positive impact on a company’s revenues.

Now, the good news.  

Proactively defining your go-to-market strategy ahead of the introduction of a new product significantly increases the probability of its success once launched. 

Why You Need A GTM Strategy

A go-to-market strategy (GTM) anticipate the challenges of a competitive market by thoroughly identifying the target audiences, articulating the product’s value proposition, describing a marketing plan, and providing a strategy for its sales channels. 

 

Some of the most common benefits of compiling an effective GTM strategy include:

• Gaining a comprehensive understanding of the marketplace, the target market, and your product’s place in it.
• Defining and rroubleshooting product positioning and messaging before going to market. 
• Keeping marketing costs down by identifying promotional channels with the highest return on investment.
• Concretely defining the logistics of distribution and sales channels before launch to ensure maximum market impact.

In addition to helping you launch a product successfully, compiling an effective GTM strategy can benefit your business in several ways, including:

• Understanding the market—compiling a GTM strategy involves gaining a comprehensive understanding of the marketplace, the target market, your competitors, your competitors, and your proposed product’s place in it. With more insight into customers and the market conditions, your organization will have more tools to thrive in all areas of business, from product launches to introducing a new brand identity to the world.
• Reducing costs—with a solid GTM strategy, you can keep marketing costs down by identifying promotional channels with the highest return on investment (ROI) and developing marketing messaging and content that will resonate with your target market.
• Reducing time to market—GTM strategies also help you launch products more quickly in the following ways:
• Prioritizing tasks that are essential for a product to enter the market.
• Troubleshooting product positioning and messaging before going to market.
• Concretely defining the logistics of distribution and sales channels before launch to ensure maximum market impact.

Depending on the kind of product you are launching, you might consider the minimum viable product approach: making sure the product has enough features to attract early adopters, validating the product, and learning what product updates or improvements could improve customer experience.

Your GTM strategy, when skillfully executed, can increase your organization’s growth potential. With access to new niche markets, organized market data, and an efficient process for launching products, you can seize growth opportunities more easily than without a predefined and clearly-articulated strategy.

Marketing Strategy vs. Marketing Plan vs. GTM Strategy

People sometimes use the terms marketing strategy, marketing plan, and go-to-market strategy interchangeably and, although there is overlap and similarity, they are not the same thing.

• Marketing Strategy—a long-term strategy (often many years in the future) that outlines a business’s overall marketing objectives.
• Marketing Plan—an action plan outlining the concrete steps required to undertake a marketing campaign.
• Go-to-market Strategy—a strategic outline of the considerations and steps required to bring a new product to the marketplace successfully.

While GTM strategy can include a marketing plan and be directed by a marketing strategy, neither a marketing plan nor a marketing strategy includes a concrete GTM strategy!

Creating Your GTM strategy

A go-to-market strategy compiles several other strategies and marketing methods to ensure a product enters the market with the best possible chance of success. To help you better understand what goes into compiling a GTM strategy, the following guide includes key elements you should develop throughout the process.

1. Identify Your Target Market

The customer is the centerpiece of any marketing strategy.  

As a result, whether you are bringing a new product to market or refreshing an existing one, it is imperative that you first research and identify the target market that will be most interested in purchasing it. 

A target market is a group of individuals who have a shared set of features, such as demographic or psychographic similarities. The process of identifying the shared similarities between groups is called segmentation and involves researching the kinds of individuals or organizations that would be most likely to purchase your product. 

As you identify your target market, answer these questions:

• Is your product being sold to everyday consumers (B2C) or to other businesses (B2B)?
• Will you use demographic, psychographic, or other types of segmentation to define your target market?
• What are the pain points of your target market? What problem are you solving with your product?
  

Repeat this exercise if you are addressing more than one target market. 

2. Describe Your Value Proposition

A product’s value proposition is the benefit it provides customers and the problems it solves. In other words, your product’s value proposition articulates why the target market should purchase the product. 

The value proposition that you identify should be as much about the target market you are selling to as the product itself. For example, while some products position themselves as a cheaper alternative to another product, others position themselves as the solution to a particular problem that currently has no market solution. 

The exact value proposition that your product or service will provide is dependent on what it is and who its target market is. To define your product's value proposition, answer the following:

• What pain points does your product remedy?
• How does your product stand out from your competitors?
• What unique features or experience does your product or service provide potential customers? 

Ideally, your value proposition delivers a significant (ideally 10x) improvement compared to the solution your customers are using at present. If not, it may be challenging for your sales team to persuade your prospects to switch from your competitor to you.

3. Define Your Pricing Strategy

Price is an important factor for any product. You don’t want to sell a product for too much or too little. If you do, you’ll risk either not moving enough product or eating too much into your profit margin. 

Now that you have an understanding of your target market and the value that your product offers, you have a better understanding of what price a consumer might be willing to pay for your product. 

As you consider your pricing strategy, some questions you might ask yourself include:

• How much does it cost to manufacture your product?
• What price do you need to meet in order to make a profit?
• How much do your competitors charge for a similar product or service?
• What is your target marketing willing to pay for your product?
• Will you use a subscription or transactional model?

A good price is one that fits your business objectives, matches your customer profile, and makes you competitive in the marketplace. (Keep an eye open for a future blog post on pricing strategy.)

4. Craft Your Promotion Strategy

Your promotion strategy is your action plan to promote your product to your target customers. Here, you should craft a marketing plan that outlines the exact steps you will take to reach your customer base. 

The techniques you use to promote your product will depend entirely on the product or service you are selling. For instance, while one business might use a sales team to pitch their product to other businesses, another might instead focus on social media marketing to raise brand awareness and draw in potential customers organically. 

As you craft your promotion strategy, some questions to consider include:

• What is the best channel to reach your target audience? Online or offline?
• Does your customer respond better to outbound marketing methods, such as phone calls or radio advertisements, or inbound marketing efforts like SEO?
• Where does your target audience spend most of their time? What marketing channels penetrate that space?
• What marketing methods can you realistically implement now considering your current budget?

This is your opportunity to be stand out from your competition by being bold and innovative!  I’ve heard this described as a “Broadway Show” It’s an apt metaphor.

5. Build Your Sales and Distribution Ecosystem

Sales channels are where buyers can purchase your product, while distribution channels are the ways that your product actually gets to your customer. 

Often, sales channels and distribution channels can be the same, such as when a consumer buys directly from a manufacturer. In other instances, distribution channels can be much more complex, such as when a producer sells to a wholesaler, who in turn sells to a retailer who then finally sells their product to a consumer. 

Some points to consider when choosing sales and distribution channels include:

• What is the nature of your product and does it have any specific sales and distribution requirements?
• What are the manufacturing needs of your product and how does that impact its sale and distribution?
• Where does your target market shop or buy products?
• How can you make the sale of your product as seamless as possible? 

Whether you decide to sell your product in-person or online, directly to a consumer or to a wholesaler, or some other variation, depends on the unique needs of your product. Whatever you pick, the buyer’s journey should be as seamless as possible to reduce friction and increase sales.

6. Identify Metrics and Track Performance

The success of your go-to-market strategy is completely dependent on the goals that you set. In setting these goals, you are also identifying the metrics you will use to measure your success.

For example, if it turns out that you are paying more to acquire customers than they are paying for your product, then you will need to adjust your strategy to reach a better customer acquisition cost. 

Some common metrics for measuring the success of a go-to-market strategy include:

• Customer acquisition cost (CAC).
• Cost per dollar of sales expense.
• Closing/ conversion rate.
• Length of the sales cycle.

As your GTM strategy goes from idea to reality, it is important to keep track of your metrics and to make any necessary adjustments as you go along.  

Get Market Ready

An effective GTM strategy is at the core of every successful business. 

Your target audience likely has tens or even hundreds of competing offerings to choose from, and by planning your GTM strategy and tracking each relevant program through an analytics dashboard, you can keep a constant pulse on your strategy's effectiveness and pivot towards more effective programs. 

This can make the difference between being one of the 95% of new products that fail every year and the 5% that succeed. 

Thanks for reading.

 If you found this article helpful be sure to read our blog post on product launch planning.