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$/month.
How would you approach those big companies?
Properly, you would send out a herd of salespeople to start a month-long sales process.
Since the software's scope in the example sounds quite complicated and its implementation would be a tremendous time investment for the buyer, they want to have a dedicated key account manager on your side to help implement the product.
In short, your company would need to have a lot of touchpoints with the client, and the process involves a lot of complexity.
Let's imagine you've created software to let individuals track their working hours. The product costs 2.99$/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:
Christoph Janz wrote an article in which he outlined 5 ways to build a 100M $ business. (Read also: https://versionone.vc/the-only-2-ways-to-build-a-100-million-business/)
If you're selling high-ARPA software, a common way to do so is the sales-led approach.
If someone spends > 5.000$/month, they want to make sure that everything fits perfectly.
They don't want to onboard themselves and check all the possibilities of the software. The owner of this implementation-project intends to have several in-person meetings so that you can explain in detail how to use the software perfectly.
What you should focus on:
If you're selling low-ARPA software, a common way to do so is the product-led approach.
If someone spends < 50$/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:
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.