Mar 7, 2021
 min read

Go-To-Market Strategy for SaaS

What is a Go-To-Market Strategy?

Simply put, the GTM strategy defines how you plan to sell your product to whom.

When we create personas, we analyze individual potential customers.

On the other hand, with a Go-To-Market strategy, we describe the general way we plan to sell the product and to which customers we do so.

Imagine you have created a highly sophisticated business software that allows fortune 500 companies to integrate every workflow of their 20.000 employees. The product costs 40.000$/month.

How would you approach those big companies?

Properly, you would send out a herd of salespeople to start a month-long sales process.

Since the software's scope in the example sounds quite complicated and its implementation would be a tremendous time investment for the buyer, they want to have a dedicated key account manager on your side to help implement the product.

In short, your company would need to have a lot of touchpoints with the client, and the process involves a lot of complexity.

Another example:

Let's imagine you've created software to let individuals track their working hours. The product costs 2.99$/month.

You wouldn't send out the same herd of salespeople as you would in the example of, right? At least not if you want to make a profit :)

After looking at those two extremes, it becomes obvious:

To define a successful Go-To-Market strategy, we should encounter the revenue and market volume of potential customers.

To make a profit:

  • If the ARPA is low, you need to have a high market volume and better have a highly automated onboarding process.
  • If the ARPA is high, you can spend more time and money to convert a prospect into a paying customer because the stakes are much higher. And because the stakes are high, a high market volume is less important.

Christoph Janz wrote an article in which he outlined 5 ways to build a 100M $ business. (Read also:

  • 1,000 enterprise customers paying you $100k+ per year each; or
  • 10,000 medium-sized companies paying you $10k+ per year each; or
  • 100,000 small businesses paying you $1k+ per year each; or
  • 1 million consumers or "prosumers" paying you $100+ per year each (or, in the case of eCommerce businesses, 1M customers generating $100+ in contribution margin** per year each); or
  • 10 million active consumers who you monetize at $10+ per year each by selling ads

GTM for High-ARPA products

If you're selling high-ARPA software, a common way to do so is the sales-led approach.

If someone spends > 5.000$/month, they want to make sure that everything fits perfectly.

They don't want to onboard themselves and check all the possibilities of the software. The owner of this implementation-project intends to have several in-person meetings so that you can explain in detail how to use the software perfectly.

What you should focus on:

  • Sales-Led Growth
  • Build a great sales team
  • Make sure to have the time and money to make it through the long enterprise sales cycle

GTM for Low-ARPA products

If you're selling low-ARPA software, a common way to do so is the product-led approach.

If someone spends < 50$/month, you better have a low-touch GTM in place, since you'll need a lot of customers to make decent profit.

What you should focus on:

  • Check if the addressable market is big enough
  • Product-Led Growth
  • Low touch Self-Service Onboarding
  • Smooth & easy to understand onboarding experience
  • Free Trial: Let the user try the software for free for a limited time
  • Freemium: Make your software's basic functions available for free to get high exposure. Try to convert the users to paying customers later.

Finding the GTM-Product-Fit

No matter what kind of product you have, you need to solve the problem of your customer. You need to have a Product-Market-fit.

But solving a problem isn't enough anymore.

To acquire the right customers, it is vital to have a proper Go-To-Market strategy that fits the product.

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