Introducing a new product can yield lucrative rewards. According to a Harvard Business Review survey, 85% of executives said that an effective go-to-market (GTM) strategy was important to the success of their organizations. However, just 29% of respondents said their teams implemented effective product launch plans. That dissonance illustrates the need for a considered go-to-market planning.
Businesses with thorough go-to-market strategies have a better chance of successfully launching a new product. Read on to learn about the benefits of this strategy and how to prepare for a product launch.
What is a go-to-market strategy?
A go-to-market strategy is a comprehensive plan that businesses use to bring a new product or service to market or to introduce an existing product into a new market.
A go-to-market strategy helps to enhance and measure the viability and probability of a product’s success. It can also predict its performance based on market research, past results, and competitive data. GTM plans detail a company’s strategy for reaching and converting its target customers and selling its products or services.
New products don’t always succeed, which makes bringing a product to market risky. But an end-to-end GTM strategy identifies and mitigates many failure risks, increasing the likelihood of a well-executed launch.
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Benefits of a go-to-market strategy
Creating a go-to-market strategy can benefit companies in several ways, such as:
Aligned product strategy and business mission
As part of a GTM strategy, companies aim to connect their new products with the business’s core mission and strategic objectives. The process illuminates whether this product or service is in line with its other offerings, ensuring a brand has a cohesive identity.
Defined target market
GTM strategies require companies to understand their target markets and where their products fit into a consumer’s life. Businesses can then carve out a unique place within that market and provide valuable intel to help improve wider marketing, sales, and customer service initiatives.
Expedited time to market
A go-to-market strategy outlines the process, timeline, and essential milestones needed for a successful product launch. This reduces detours and helps keep the team laser-focused on clearly defined goals, speeding up how long it takes for a product to go from conception to launch).
Early identification of shortcomings
A well-formulated GTM strategy aims to reduce the chance of failure. As the strategy unfolds, companies will identify and account for potential shortcomings with their products and strategies that may cost them time and money, allowing them to pivot toward a more viable path forward.
How to create a go-to-market strategy
- Identify the reason for your product or service
- Understand the customer
- Research competitors and market demand
- Develop the unique value proposition
- Define pricing
- Create a promotion strategy
- Select sales and distribution channels
- Set metrics and targets
- Monitor performance and solicit feedback
Each go-to-market strategy will differ depending on the market, target audience, product, and business goals, but the following steps can help companies of all sizes:
1. Identify the reason for your product or service
A product should solve a specific problem or pain point for its target consumers. Alignment between the product, problem, and value proposition is called product-market fit and is a signal for how well the product satisfies market demand.
The first step in any GTM strategy is to research and deeply understand how your product can solve these pain points for customers.
2. Understand the customer
Once you identify the problem, determine who is most likely to buy the product (the target market) and why they would choose it over competing products.
Identifying this target market requires deep market research to understand the buyer’s journey and to identify specific consumer attributes. Segmenting by demographics, psychographic similarities, interests, values, and consumer habits helps to create ideal customer profiles (ICPs) that will influence messaging and promotions.
3. Research competitors and market demand
Analyze the landscape where you will launch or expand your product. The goal is to understand how the product will fit alongside those of your rivals and where you have a competitive advantage.
This includes research into how competitors position themselves, what their values are, how they present their product’s benefits, and how they price their products. This is also an opportune time to identify gaps in the competitive landscape, which you can fill with your own messaging and product offers.
4. Develop the unique value proposition
A unique value proposition (UVP) is a clear description of the core benefit the product delivers to target customers and the problem it solves. Writing one requires a deep understanding of the target consumer, market, and competitive landscape.
Write, rewrite, and refine your UVP numerous times until it articulates the core value of the product. This will eventually become the foundation of all messaging, marketing, and sales efforts for the product.
5. Define pricing
With the pricing strategy, a company aims to find the sweet spot between what consumers are willing to pay for a product and what the company can feasibly sell it for and earn a profit. If a product is too expensive, then there’s a risk of not selling enough to create profit margin. If it’s too inexpensive, then the business likely won’t make enough money to justify the product launch.
6. Create a promotion strategy
At this point, companies can turn their attention to creating a promotion strategy for their new product or service. Typically, this involves the creation of a marketing plan that includes goals and objectives, cost estimates, key performance indicators (KPIs), timelines for promotion, and campaign messaging.
When creating a promotion plan, companies should think about the best sales and marketing channels to reach their target audience and ready-to-buy consumers, how they can communicate their UVP, and how they will market to their existing customer base along with potential customers.
7. Select sales and distribution channels
Next, determine where customers can purchase products (sales channels) and how the company plans to get the products to them (distribution channels).
For sales channels, this includes the strategy for an ecommerce website, social media commerce, brick-and-mortar stores, and any other points of sales. Distribution models can include physical stores, wholesale networks, marketplaces, or direct-to-consumer delivery.
Each channel will come with its own set of logistics, including how consumers can make their purchases (the buying process), how products are delivered, the costs and timelines associated with delivery, and third-party or internal stakeholders, such as a sales team.
At each decision point, consider costs, business goals, and consumer expectations.
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8. Set metrics and targets
Your goals determine the success of your GTM strategy. Common metrics in a go-to-market campaign include total sales volume, time to market, customer acquisition cost (CAC), and the length of a sales cycle.
These metrics help determine the post-launch next steps for the company, including how it should refine its marketing efforts and the strategy for future launches.
9. Monitor performance and solicit feedback
Once you launch a product, consistently monitor core KPIs to measure the success of your GTM strategy. Additionally, companies should actively solicit feedback from internal stakeholders and customers to determine how they can improve their GTM plans.
Go-to-market strategy tips
Here are three go-to-market strategy tips that any business can implement:
Understand how and why customers buy
A GTM strategy should focus on the consumers who will buy the product. The success or failure of a go-to-market plan rests on how well a company understands its target audience’s desires, motivations, fears, doubts, and barriers to acquisition. Understanding those factors gives the product, messaging, sales, marketing, and distribution strategies the best chance to meet the buyers’ wants and needs.
Seek input from buyers
Market research and testing different strategies gives you insight into your consumers. But the most direct way to understand them is to ask them for their input.
Actively seek feedback from existing and prospective customers. Ask them what they like about the product, where they purchased it, and ways to improve it. Use focus groups, buyer surveys, and online reviews to gain a deeper understanding of what motivates the buyer.
Test everything frequently
The goal of a GTM strategy is to maximize the effectiveness and efficiency of the product rollout. It’s often an iterative process with individual tactics improving over time.
To achieve iterative improvement, companies should continuously test various strategies for their product design and quality, messaging and value proposition, marketing and sales strategy, pricing, and discounts. Test, learn what works, and refine.
When should you use a go-to-market strategy?
Companies should use a go-to-market strategy when they are launching a new product into an existing market, introducing an existing product into a new market, or are testing options for the growth of a product within its current market.
What are the elements of a go-to-market strategy?
The core elements of a go-to-market strategy start with establishing target consumers and value propositions. Then, businesses should explore their market before creating a messaging strategy, which includes the sales, marketing, and distribution plans. Finally, with input from the competitive landscape within the target market, companies can decide the pricing strategy for the product.
What is the difference between a go-to-market strategy and a marketing strategy?
The difference between a go-to-market strategy and a marketing strategy relates to focus and longevity. A GTM plan focuses on bringing a new product to market within a finite time period. A marketing plan aims to drive brand awareness and revenue for the entire business on an ongoing basis. A marketing strategy includes a much wider range of activities and goals.