A promising service or product. Investor backing. A sharp and motivated team. Your company has everything that it needs—except customers! Your next step, urgently, is to develop a comprehensive go-to-market strategy, one that ensures that you target the right customers, position your product in the best possible way, outmatch the competition, and approach marketing and sales efforts in an efficient and competent way. You can do this! Read on for the steps that you’ll need to take to construct a functional and useful go-to-market plan.
Define the Target Markets
Your product or service is probably not well-suited for literally everyone, and that’s okay. Determining the target market or markets for your offering helps you to focus on only serving the markets or groups of people for which your product is the best fit. You may decide to target one or more groups based on the group’s size, the revenue or profit potential, the degree of existing competition, the ease of geographic access, or other factors. You may also choose to define the target market by who can most benefit from your product or service. The primary defining characteristics of the target market may encompass factors like age, gender, ethnicity, geographic location, or income, and may incorporate just one or a combination of these factors.
Steps to identify the most attractive target markets:
- Develop a list of markets that are potentially promising;
- Research, for each possible market, its size, revenue and profit potential, growth potential, ferocity of competition, relative proximity or ease of access, barriers to entry, and other key characteristics; and
- Apply this research to create a prioritized list of the most attractive and viable target markets.
Profile the Ideal Customers
Developing detailed, thoughtful profiles of the ideal customers is the next step after refining and validating the target markets. You have already defined the essential characteristics of the target customer; now you need to deeply understand who the target customer is on a more comprehensive level. What does the customer need or want? What do they prefer? What are the key attributes of their behaviors? What challenges do they face? What are their passions or goals? What makes them successful? How would they describe their philosophies or attitudes? Developing detailed customer personas—to the point of understanding what the customer reads and how they like their coffee in the mornings— for each of your target markets helps you to understand how your target customers are likely to experience your product or service.
Steps to profile your target customers:
- Conduct research in the form of personal interviews, focus groups, online and/or in-person surveys, and other relevant methods to gather as much data and information as possible about each target customer group;
- Seek to understand specifically how each customer persona becomes aware of your offering and how they interact with it, and the qualitative nature of their experiences with your product; and
- Compile this information to develop one or more personas that are richly detailed and highly specific.
Not sure how best to profile your target customers with COVID-19 eliminating all in-person options? Fuel Cycle, a Scopus Ventures portfolio company, fills that gap with FC Live, an innovative solution for conducting in-depth customer interviews via video calls.
Articulate the Value Proposition
With your target markets refined and validated and customer personas defined, now you can articulate the specific value proposition of your product or service. What are the key features of your product or service? What benefits does your product or service provide to the target customer? What problem or problems does the product solve, or how does it solve those problems cheaper, faster, or better? What distinguishes your product or service from that of your competitors—i.e., what is the defensible economic moat that is proprietary to your offering? What would compel your target customer to start buying your product, or choose your product over a competitor’s offering? You or other members of your team are probably already deeply familiar with your company’s product or service, so the objective here is simply to specify how the specific attributes of the product or service align with the preferences and behaviors of your target customers.
Steps to articulate the value proposition of your product or service:
- Define the key features or attributes of the product;
- Articulate the product’s benefits and/or the problem that it solves;
- Describe specifically how the product confers its benefits or solves the identified problem;
- Distinguish how the product or service differs from the offerings of competitors;
- Describe specifically why the product or service is superior to competitors’ offerings; and
- Articulate what will compel the target customer to reliably choose your product in place of the existing offerings.
Define the Market Position
Whereas the emphasis of articulating value proposition is primarily on the characteristics of the product or service itself, defining the market position focuses on how to best situate your product or service in relation to its competitors. How do you want your target customers to view your product or service in comparison to competitors’ offerings? Do you want your product to stand out based on its quality, price, or other feature? How does the branding or image of your company support or detract from the product’s intended market positioning? How can your company emphasize its strengths and downplay its weaknesses to achieve the target market position? Your target position in the competitive marketplace should closely correlate with both the priorities and values of your target customer and the value proposition of your product or service.
Steps to define the target market positioning of your product or service:
- Identify the key characteristics of your product that positively differentiate it from competitors’ offerings;
- Develop a pricing strategy for the product that functions as a key strategic tool to secure the product’s intended position in the competitive marketplace;
- Ensure that the product is branded in a way that effectively communicates its competitive strengths; and
- Develop the company’s image in close alignment with the product’s branding.
To further articulate and define the target market position of your product or service, ask yourself and your team these thirteen questions.
Develop a Marketing & Sales Plan
Here’s where the rubber meets the road. Now that you’ve defined your target markets and closely articulated your target positioning, you need a comprehensive marketing and sales plan that is both conceptual and tactical in nature.
Depending on the nature of your product or service, your marketing and sales plan may need to be most heavily focused on marketing or most heavily focused on sales. Understanding which component to prioritize is an essential first step to developing a useful, coherent marketing and sales plan. Determine whether marketing or sales efforts are most vital to your strategy by considering the following:
- Target market: Is your target market large and diverse or small and specialized? Targeting a large market necessitates broad-based marketing efforts and generally precludes the possibility of direct sales, whereas a small or specialized target market may require sales-based efforts that are direct and highly personalized.
- Complexity of offering: Is the product or service simple or complex to understand and use? Offerings that are complex in nature require more sales outreach than those that are relatively simple.
- Product or service cost: How expensive is your product or service? Much like an offering’s complexity, products and services that are costly require greater sales efforts than those that are inexpensive.
Most products and services require some combination of both marketing and sales. Marketing efforts typically focus on reaching large numbers of people, whereas sales efforts are more process-driven and typically focus on connecting directly with customers on an individualized basis.
Steps to develop a comprehensive marketing plan:
- Identify the potential marketing channels—such as paid advertising, website content, newsletters, social media, podcasts, videos, white papers, and conferences or other in-person events—by which to reach your target customers;
- Determine which marketing channels are likely most effective, based on the nature of your offering and the characteristics of your target customers; and
- Prioritize and develop marketing materials and outreach efforts accordingly.
Steps to develop a comprehensive sales plan:
- Define the composition of the sales team, which may be some mix of in-house sales representatives, external partners, and resellers;
- Identify and develop the information and resources that the sales team needs to receive sufficient training;
- Determine how the sales team is going to find the target customers, which may include both fielding inbound inquiries and conducting outbound efforts;
- Establish how the sales team will initiate contact and engage with the target customers, including whether that engagement will encompass demonstrating the product or offering complimentary trial services; and
- Specify how sales will be transacted or otherwise completed.
A sale may formally end at the point of transaction, but the sales team must also be equipped with tools and resources to ensure customer satisfaction following the sale. In addition, whether the product or service requires more marketing or more sales, a comprehensive go-to-market strategy must also specify how the product will be distributed. Physical products may be sold in stores or via e-commerce, while software products may be downloaded directly. A robust, thoroughly-considered distribution strategy is an important, if often overlooked, component of going to market.
Put It All Together
Your company is not in the business of producing paperwork for paperwork’s sake, but your final step now is to prepare a concise, coherent Go-to-Market Strategy document in written form. This document should incorporate each of the elements above, plus define the time, expense, and resources—human and otherwise—required to accomplish each step. In addition, the document should specify the metric or metrics by which the go-to-market strategy’s success will be determined or evaluated. And the “final” draft of this strategy document should be treated like a working document or interim first draft, one that is both actually used by your team and periodically updated. As your product or service evolves, the competitive landscape changes, or your team otherwise gathers new and important information, the go-to-market strategy can and should be modified accordingly. Going to market is above all an iterative process, one that continues to evolve until a fit between the marketing strategy and marketplace is achieved.
Not only do your investors want to see that you’ve developed a robust go-to-market strategy, but also the strategy development process itself can be immensely beneficial for your company. Articulating a startup company’s visions and goals simultaneously refines and improves them, and ensures that all members of your team are aligned behind a cohesive, sustained effort. Remember too that once you’ve developed your “foolproof” go-to-market strategy, you likely will need to refine or dramatically change it based on the marketplace results that you actually achieve.