Why Your Go-To-Market Strategy Matters
Defining and managing a strong go-to-market strategy is critical for your business. Unfortunately, too many companies fail to focus on their go-to-market strategy as a competitive advantage. After helping hundreds of companies accelerate their revenues, The Spur Group can definitively state this can be a costly mistake.
Sustaining a competitive advantage
Product innovation is not enough
Most companies get born through product innovation. They are founded on an idea—a new way of doing something. But as a market matures, it is harder to sustain innovation.
Most markets fall into one of two patterns.
The first pattern is a thriving market. Customers have a well-recognized need. There are likely two or three leaders offering a relatively stable set of choices for customers to select. Product innovation happens on the edges. It is rarely a game-changer. Think laundry detergents. While there are many brands, there are relatively few companies competing in the space. Where they do fight, they compete on price (driven by operational scale), habit (my family has always used Tide) or point-level differentiation (smells better or brighter whites).
The second pattern is a new market, where product innovation is a catalyst that reshapes everything. Think Tesla, Airbnb, or Uber. The new idea redefined customer expectations, and in doing so, redefines the market. In some cases, like the iPod, customers may not even recognize they have the underlying need until the innovation happens. The market impact is immense. The old legacy leaders (if they are not the innovators) either get left behind or need to focus everything on playing catch-up.
Companies chase product innovation because of its ability to redefine markets. As the innovator, you gain a powerful, first-mover advantage. Kleenex in facial tissues and Amazon in retail are great examples of the power of a first-mover advantage. But being the first-mover is not always enough—ask Sony about Betamax, it can be fleeting. Other brands may be “good enough” from an innovation point-of-view. They may then use their go-to-market strengths to win your audience’s mindshare and loyalty. More importantly, the gain a company gets from innovation is becoming less and less sustainable. Where first-movers once had an edge that would last for decades, it now only lasts for years, sometimes just months
This reality means that companies need a different strategy for building a sustainable competitive advantage.
Why you need a go-to-market strategy
Type in “go-to-market” in Google, and you will get this definition from Wikipedia:
“Go-to-market or go-to-market strategy is the plan of an organization, utilizing their inside and outside resources, to deliver their unique value proposition to customers and achieve competitive advantage.”
While technically accurate, this definition does not explain why you need a great go-to-market strategy to compete in today’s world.
We are in a fundamental shift in how people buy. Today’s buyer is more knowledgeable than ever before. At the same time, information about almost anything is becoming more and more available. These two trends converge to create a new dynamic.
Unless the purchase is a real impulse, customers form opinions on a solution source well before they engage with a brand overtly. They seek reviews from peers and experts. They research features and capabilities between competitors. This is even more so in a B2B landscape. The potential customers make judgments on a vendor’s ease of doing business and commitment to the customer. They form a compelling opinion based on their experiences.
This new dynamic is two-fold. Product innovation gets you a seat at the table. But it is a vendor’s go-to-market experience that closes the sale and creates a customer.
It is your go-to-market strategy that builds sustainable competitive advantages
How you define and manage relationships to build experiences that win customers is perhaps a more accurate definition of a go-to-market strategy.
The five go-to-market motions
After prioritizing why you need to develop your go-to-market approach, you need to understand what you need to do. There are five critical motions required for every go-to-market strategy. As a go-to-market leader, you should focus on bolstering each. While each motion is independent, they do build upon one another.
Gain actionable insights
The first motion is all about gaining actionable insights. Most companies sit on a wealth of information about their customers, partners, and themselves. However, many companies fail to use this information to create a competitive advantage. Too often, the data is siloed and inaccessible. Other times, the information is in different formats or structures and cannot quickly form a clear picture. This disconnect is a missed opportunity.
Seeking an understanding of their customers, partners, and place in the market should be the first step for every go-to-market leader. Sometimes, this task can seem daunting-- we recommend starting where you have control:
Think through your information collection points.
Almost every interaction tells you something about your customers, partners, or yourself. Architect collecting the most useful data, simply and unobtrusively, as part of every transaction. Use a mix of automated records, captured notes, and measured outcomes. It is essential to think through how to collect data in as many customer, partner, and employee experiences as possible.
Consolidate and normalize your disparate data.
Every company has standard reporting; the challenge is that each report often provides a filtered snapshot of your business. Wherever possible, you should gather and consolidate your relevant source data into one data warehouse. You should extract it from the transactional systems, clean it through a repeatable, managed process, and structure it so different sources combine more seamlessly. You will often encounter pushback from IT and other data owners. Push through it. You will be rewarded by being the most knowledgeable expert and having the ability to use data to inform and back-up your decisions.
Develop, or hire, the skills required to conduct in-depth analysis.
Your data is only as useful as your ability to understand and communicate it. You need to be able to easily leverage information once you have created a consolidated, single source of data. Argue for headcount, or vendor support, to make this a core competency for your team. This capability lets you seek trends, gain insights, and publish information in both a regular cadence and an ad hoc manner as your business needs it. It will dramatically increase your team’s agility and flexibility. It will help you convince stakeholders and senior management. It will help you be more efficient and more effective.
Share information relentlessly throughout your organization.
Avoid the temptation to hoard your information and to keep your new-found expertise as a personal advantage. Instead, become both the single source of record and the most trusted source for analysis. Publish standardized dashboards for your internal and external stakeholders and visualize information in manners that make it easy to consume. Your value to the organization and influence with your peers will increase dramatically.
Take your results to the next level.
Behavioral triggers and gated access are standard parts of today’s business engagements. Current technology lets you take this to the next level: artificial intelligence (AI) drives better decision making, machine learning improves effectiveness, and robotic process automation increases efficiency. All three help you accomplish more with less. And all three are more accessible to the typical business leader than ever before.
Magnify audience engagement
How you engage your customers, partners, and employees defines the experiences that shape the relationships they form. How many times have you vowed to never return to a supplier because the effort just was not worth the value? Your experience was poor, and the result was the loss of an advantage.
While almost every businessperson understands this at a basic level, it is an essential need that is not always put into practice. We recommend all our clients think through and focus on improving their audience engagement with several necessary measures:
Define your audience personas.
The real value of this exercise is four-fold. You will fine-tune your segmentation thinking; it helps make sure you identify and target each relevant audience effectively. You concentrate on understanding and documenting each audience’s pain points and needs. (This is a great time to leverage that insight you are getting from your data.) Only then can you define and align your customer value, partner business, and unique selling propositions. Finally, it provides a joint, shared road map that will unify your people and efforts.
Create a consolidated messaging framework.
Ask your peers what your customers value the most in your products and services. Does everyone have the same answer? One of the biggest challenges a company faces is the consistency and alignment of its messaging. Too often, your product (and engineering), marketing, and sales teams have different points of view on what drives customer value. The same holds in the partner space—does everyone in your organization agree on the importance of partners and their role winning and delighting customers? A well-constructed messaging framework creates a clear and consistent direction. It establishes the top-level talking points and fleshes out the essential proof points. You must create, document, and communicate a consolidated messaging framework to the entire team,
Build out your journeys.
You need to make sure your customer and partner experiences create momentum. Many companies think hard about how to engage customers (and partners) as part of a sales funnel. Those same companies often fail to think about how to engage outside that funnel. This omission can be a dangerous error. People do not always behave in a predictable, linear manner. Your existing satisfied customers, operating outside their personal buyer's journey, are usually the best advocates. The sales process influences customer’s and partner’s passion and loyalty, but it ignites when you resonate with their personal beliefs. Map out all the significant experiences, and as many of the minor as possible. When you regularly make each experience a little better, the rewards are many-fold. Then operationalize those experiences to create scale and predictability.
Amplify yourself through connected content.
Great content generally falls into two buckets: content that attracts and drives marketing and content that informs and promotes enablement. You need both if you run a product, program, or audience. Then you have different audiences with slightly different messaging. If your organization has partners, then you need content around both the value of buying and selling. That is a lot of iterations for your content. Your company may make this even more complicated by dispersing responsibility for different content across your organization. Structure and process alleviate this complexity, allowing control and scale. You need to ask yourself—do you have that structure and process in place? And how effective are you at managing through that process, especially if your organization distributes content responsibility?
Rethink your engagement strategies.
What is your customer engagement strategy? Is it driven by an internal focus like digital transformation or content marketing? Are you pushing your marketing onto your customers, or are they actively choosing to give you their attention? The goal of your marketing should be to establish and build relevance with your customers – and to provide them with value. It needs to focus on customers (and partners) based on what they do, continuously over time, pushing them to specific outcomes, everywhere they are as individuals. Each element of your marketing and content planning, execution, and measurement needs to focus on creating this relevance so that you resonate with your customers and partners.
Increase sales effectiveness
How you sell is changing dramatically. Sales leaders are facing new challenges. They need to accelerate revenue consistently and predictably during an increasing pace of change. Product cycles are becoming shorter. Data-driven sales models are essential. New sales models come into and out of favor quickly. Sellers require different skills to compete now for customers. Leveraging an agile sales process is a required core competency.
Customers have taken control of the search and discovery process of sales. Evolving your approach is essential. There are several sales transformation tactics you should embrace:
Expand your sales leadership measurement.
How much confidence do you, and your senior leadership, have in your organization’s ability to achieve above industry-average, sustainable growth. Sales leadership is broader than just delivering against a sales quota. An effective sales leader needs to lead people, manage processes, AND grow revenues. You need to think through people issues such as turnover, incentives, and development; process issues like speed, methodology and accuracy; and revenue issues like value, competition, and differentiation. Your business metrics need to expand to include measures on renewals, referrals, up-sales, cross-sales, churn, and lifetime value. You need to manage internal stakeholders across finance, marketing, products, and the executive suite. Your first step to any sales transformation effort is evaluating the sales landscape and forming an effective plan.
Re-evaluate your sales channels and coverage model.
Defining your sales channels is a balancing act that needs constant monitoring and adjustment. You have a varied set of choices: selling online, through partners, based on inside sales, or with field-based direct sales. Each has significant strengths and weaknesses. Your mix of channels needs to adapt as technology, customer needs, and channel preferences evolve. Your payback can be substantial—you will better manage your cost of sales, your ability to win new customers, and your sales effectiveness.
Focus on sales enablement.
One of the critical questions every sales manager needs to ask themselves about their sellers is how much time is spent on selling versus doing other activities. A strong sales enablement program improves productivity by providing sellers with the resources they need to close more deals. It enhances the ability for individuals to operate as a team, be nimble, and act collaboratively across the organization. Better sales enablement ensures you have the right content, better alignment with marketing, engage with customers more effectively, follow defined sales processes, and ultimately deliver more measurable business outcomes.
Strengthen your end-to-end sales compensation plan.
Sales teams are more coin-operated than most internal functions—you get what you measure and reward. Three drivers of success are likely spread across your organization: Marketing needs to turn over to sales the right number of highly qualified prospects at the right time. Sales needs to be accountable for the length of the sales cycle, the percentage of wins, deal size, and net margins. Product/solution customer success or delivery teams own the ability to execute against the promises made within the net profitability window to generate both repeat and referral business. Your sales compensation plan needs to pay each player to complete their specific role, be simple enough to drive both behavior and outcomes, and be based on real company data.
Embrace next-generation sales processes.
Let your sales team sell. Existing technology allows you to examine existing sales processes and streamline workflows markedly. Sales intelligence improves your understanding and your ability to serve individual customers dramatically. Artificial intelligence and machine learning builds pipeline and automates prospecting. Portals put the right tools and content directly in the hands of your sellers. Personalization technology improves customer engagement, usage, and satisfaction. Surprisingly, the most significant barriers to these technologies are not the availability of the underlying technologies for most medium and larger organizations—it is making use of available resources, data, and systems to drive next-generation effectiveness and effectiveness.
Improve partner leverage
Choosing when and how to leverage partners is one of the fundamental business strategies every company needs to decide. The choice is not easy. Using partners often means less control, less predictability, and less access to customers. It can elevate brand risk, make it harder to make changes, and force shared revenues and profits.
But the rewards of good channel management can fuel growth like an accelerator. Customer’s often have existing trusted relationships with partners that are near impossible for a vendor to earn. Partners have diverse business models, different market approaches, and unique monetization abilities that provide a deeper value halo around your products and services. Most importantly, they provide bandwidth, coverage, and risk-mitigation often unobtainable through direct resources. For many companies, having partners means having scale. There are several steps you should follow to magnify the results of your partner efforts:
Align your team to the drivers behind your channel strategy.
If you think of partners as a math function, they are about multiplication and not addition. You can structure your efforts to have partners sell for you by incorporating your offering into theirs, you can sell through partners by having them resell your product and services, or you can jointly sell together as a deep partnership. Your growth choices include bringing in new partners, shifting existing partners to new opportunities, enhancing partner sales velocity, and even consolidating support to establish critical mass between fewer partners. The likelihood of using a complex mix of these drivers increases with the number of products, services, and markets in play. Building systems and processes to communicate, monitor, and adjust should be at the heart of everything channel leaders do.
Develop a compelling partner business proposition.
A partner business proposition answers why a partner should align and commit their business to your business. It aligns and explains your value to the partner. It needs to be relevant against specific competitors, including inertia. It informs partner choices and reinforces decision making. You need to spend time documenting the partner business proposition for each of your top three competitors. If you are part of the partner organization, you can likely re-purpose customer-facing and sales readiness content-but you probably have sole responsibility for content around your business proposition. Follow the same steps as you would amplify customer engagement.
Focus program efforts on partner capacity and activation.
If channels are all about scale, then their value is defined by their capacity. And your effectiveness is determined by how much of that potential is activated. There are only five measures of capacity: contribution, capability, coverage, consumption, and commitment. Each partner’s potential capacity is a function of those five measures. Channel programs and initiatives exist to accelerate at least one of those measures. You need to understand whether you have the channel capacity to meet your business outcomes. You need to determine which performance gaps exist at both the individual partner level and the aggregated channel-level. You need to structure your efforts to activate partners and inculcate behaviors.
Use the right reporting cadence to show results and causality.
By its very nature, channel efforts are separated by at least one degree. For your executives, they always feel some loss of control and possibly a question around investment return for channel efforts. For partners, they feel their internal resources fundamentally contribute more to their success than whatever a vendor can provide. You need to fill in the gaps, inspire confidence, and prove success with each. This involves building a set of dashboards, reporting progress, and conducting regular business reviews. This is true at each of the partner, field, and executive levels.
Use the right incentives to power partner behavior.
The most successful companies with partners all use structured incentives to fuel partner performance. For most, it is the single biggest investment area—even larger than dedicated partner-supporting headcount. It is as essential as your sales compensation program is to drive the behaviors of your dedicated sales personnel. Define a balanced approach to incentives using a mix of contra-revenue, margin programs, commissions, and operating expenses. Inventory your existing channel incentive programs and determine whether they create the desired behavior. Set success metrics for new programs based on expected outcomes as part of the program definition process. Use joint business planning to link earning specific incentives to developing capacity and driving activation within a partner.
Fuel execution excellence
Your ability to execute is as important as your ability to plan. And in many ways, it is harder to do well. This is especially true in the go-to-market space. Doing great work certainly helps you achieve execution excellence. Your people need to be competent, and your processes need to be mature. But those probably are not the barriers to your success. Conflicting priorities, lack of bandwidth, and poor alignment are much more likely to be your issues. Where the other go-to-market motions are primarily about creating forces that accelerate your efforts, this motion is about removing friction. And like most things, a great effort has more resistance. This motion becomes more critical as the necessary degrees of transformation increase. There are five key steps you should remember:
Supplement your project management team.
Larger projects and critical processes have unique needs. They need thought leadership in developing the right, both efficient and impactful strategy. They need operational expertise to make the implementation is practical and comprehensive. They need rigor and discipline to drive diverse groups that often have different agendas. You are also generally given a false choice to a trade-off between cost, speed, and quality. Stakeholder buy-in and alignment are essential and often more manageable at the beginning than at the end. Knowing your organization’s strengths and weaknesses is critical. You must supplement your team to leverage their strengths and balance out their flaws.
Invest in change management capabilities.
More than half of all transformational projects fail to land well. The result is frustration and cynicism towards the organization, the leadership, and the effort. A clear implementation plan with milestones and checkoffs is essential. Decisions need clear communications and alignment to stick. Talent and skills gaps need to be managed and reduced. Cultural and political resistance cannot be ignored. Quick wins alleviate pressure and build confidence. Your investment in dedicated change management resources, processes, and structures for transformational projects and programs exponentially increases the likelihood of sustainable success.
Establish a governance process with a ROB (rhythm of the business) cadence.
In most medium to large companies, nothing significant happens without involving a team. Headquarters set strategy, but field executes. Even well-aligned teams ultimately have distinct accountabilities. Different groups have different visibility of the external pressures that may require adjusting strategy and execution. A governance management process solves many problems. It helps define policies as mandates, directives, or guidelines. It allows discussion and resolution of new challenges and conflicts. It holds people and groups accountable for agreed-to decisions and publicly made commitments. Effective governance always has a shared plan of record with clear accountabilities, a coordinated decision-making framework, a unified scorecard or common reporting structure, and a regular meeting cadence for reviews.
Embrace technology as a driver of innovation.
For more than 200 years, the fundamental driver of growth has been technological innovations. We are not talking about product innovations here. We are talking about using technology to drive go-to-market innovations. Artificial intelligence, and machine learning, are all about driving sustainable performance improvements. Your internal and external environment is getting more sophisticated at an ever-increasing rate. You need to use today’s technology innovations to improve your go-to-market approach in two areas. The first is increasing your ability to perceive what is going on in the marketplace. Technology lets you track more information and identify possible patterns. It gives you earlier warnings, more information, and higher causality of your efforts. The second is enhancing your ability to problem-solve. You can more rapidly build out models to predict results, understand variables, and improve performance. It does not replace the human element—it enhances managers and lets them do more, with faster speed and better results.
Understand the impacts of your M&A business culture.
How a company defines its financial performance has shifted over the last few years. Private equity and venture capital firms are more prevalent than ever before. And how they measure the success places new demands on business leaders. Even if you are not directly impacted, your CEO and CFO likely are. You need to understand how financial measures such as EBITDA impact how you report success to executives. You need to prepare for integrations as many businesses decide to buy offerings rather than make new products themselves. You need to understand your company’s evolving cultural values and what that means for you and your team.
The Spur Group’s Go-To-Market Framework
Implementing an effective go-to-market strategy can seem daunting, but it does not need to be. Keep two things in mind. You should focus on those things that are within your control. 2. Certainly advocate, partner, and mitigate for areas that are under others’ control, but that should not be your priority.
Here is a five-step road-map that can help you think through your strategy and help you implement your go-to-market strategy
Step 1: Define your strategy.
Your first step is to build your plan. This step is all about stretching your thinking, aligning key stakeholders, documenting efforts, formalizing asks, and making commitments.
Step 2: Mobilize your stakeholders.
Go-to-market is ultimately an effort about experiences and relationship. You need to think through how you move doubters (and possible worse—people apathetic) into fans and evangelists. This holds true for you customers, your partners, and your extended team.
Step 3: Execute your plan.
You are only as good as your execution. Operationalizing the running of your efforts, creating bandwidth for your team, and delivering business outcomes are essential.
Step 4: Manage your performance.
There is a business paradox where you need to be both consistent and predictable while at the same time you must be agile and flexible. You cannot do that in today’s environment without carefully monitoring your progress, communicating your impact, and adjusting as needed.
Step 5: Generate your results.
It all boils down to delivering results that matter. Your go-to-market efforts need to provide experiences that move people to create a competitive advantage for your company.