A go-to-market strategy (GTM strategy) is an action plan that specifies how a company will reach target customers and achieve competitive advantage. The purpose of a GTM strategy is to provide a blueprint for delivering a product or service to the end customer, taking into account such factors as pricing and distribution. A GTM strategy is somewhat similar to a business plan, although the latter is broader in scope and considers such factors as funding.
What's the purpose of a go-to-market strategy?
GTM is often associated with product launches, especially those targeting channel partners. Indirect channels often become a part of a product vendor's go-to-market plan. But GTM can also be used to describe the specific steps a company needs to take in order to guide customer interactions for established products. In addition, service-oriented channel partners, such as cloud service providers (CSPs) and managed service providers (MSPs), may also devise GTM strategies.
Development and core components
As an initial step, a GTM strategy must define the customer market for a particular product or service. In the case of a new offering, the company will decide whether it has existing customers that might be sales prospects or whether it needs to seek an entirely new set of target customers. In addition, the company developing a GTM strategy and honing its customer acquisition process should also zero in on who will be the buyer: the IT manager, a line-of-business (LOB) manager or a member of the C-suite, for instance.
Next, the GTM strategy should focus on the product or service to be offered and its particular business benefit for the intended target customers. With the value proposition defined, the company can determine a pricing strategy. This can prove challenging, especially if a company is shifting from product to service sales and needs to adopt a new model, such as subscription-based pricing.
In addition, the GTM strategy should also address marketing and promotion. An effective GTM strategy typically sketches out what distribution and marketing channels will be used to reach the target market. Incidentally, a GTM strategy can also be used to build out future customer relationship management (CRM) initiatives.
A change in an IT provider's overall strategic direction will often prompt a change in its go-to-market strategy.
Microsoft, for instance, announced a vertical industry go-to-market strategy in 2017 to accommodate customers undergoing digital transformation and seeking vendors with more insight into their specific businesses. Microsoft's industry initiative focuses on vertical markets, including financial services, retail, manufacturing, government, education and healthcare.
New products or product strategies may also influence go-to-market approaches. Violin Memory's shift from niche storage player to primary storage provider meant the company would be pursuing a broader array of customer segments. That change influenced the company's decision to pursue channel partners as its go-to-market strategy. Vendors may call on channel partners to improve market penetration and boost brand recognition.
A rethinking of services can also trigger a new go-to-market model. Anaplan, a cloud-based financial planning platform provider, decided to offload services that it had been providing on its own. The company altered its go-to-market plan to delivery services through channel partners.
Among managed services and cloud providers, a go-to-market plan may include targeting vertical markets, customers of a particular size or a particular technology platform, such as a specific public cloud or software as a service (SaaS) offering.