A Go-to-market (GTM) strategy is a business's plan to introduce a product/service to a new market. GTM strategies are multi-faceted as they deal with marketing, competitive intelligence, sales, market research, financial analysis (pricing), and more. The nuances of such a strategy (as shown below) ultimately depend on whether you are trying to compete in your current market or a new market and whether you are trying to introduce a new product or an existing product to that market.

This article, made by our consulting team, will provide you with a framework to help you develop the best GTM strategy for your business.

Entering a new market requires you to make a large investment with regard to finance, labour, and time. This investment should never be done with limited information on your target market. This is because doing so causes businesses to develop products that don’t meet their target market's needs since they were unaware of what their target market wanted in the first place. This results in a poor product market fit, which is one of the main reasons why startups and GTM initiatives fail.

Given the importance of understanding your target market, we recommend that you create an Ideal Customer Profile (ICP). ICPs describe your target market, noting the relevant information you must understand before you can develop a successful GTM strategy. Your ICP must account for the following segmentation-based and psychological factors.

Before determining your value proposition, you need to assess your competition to ensure that they are not already filling the gap in the market you wish to take advantage of. For example, you may find it profitable to enter a market with a cheaper alternative for customers, but have no idea that a competitor already exists in the market that is already fulfilling this market need.

Therefore, we recommend (and especially for companies that lack the funds for expensive market research) that you identify the top 3 - 5 competitors in the industry and assess their value propositions and strengths. This will help you identify gaps in the market that you can take advantage of to make a strong value proposition. Some factors you may want to exploit include product quality, price, convenience, accessibility, reduction of time, environmental benefit, customer service, prestige, and much more.

Your business needs a strong pricing strategy to ensure its success. This is because the price of your product ultimately determines how many customers will buy your product and the amount of profit or loss you will receive.

As a general rule, the price of a product is an expression of that product’s quality to your customer. If you intend on having higher margins through making products more expensive than the competition, then ensure your product is actually better quality than your competitors. If you intend to be a low-cost provider, ensure that your product isn’t significantly inferior in quality compared to competitors, otherwise it may draw away customers. If you can find a way to offer the same quality products as competitors but at a lower price, you’ve hit the sweet spot that most businesses aim for.

Step 4 is your marketing and promotional strategy, and step 5 is your sales strategy. These two steps are crucial to your business's success because they are the bridge that ensures your offering is delivered from your business to your customer. The death of many businesses has been due to weakness in one or both of these two factors.

Regarding marketing, you need to understand your target market well enough to understand how they consume information, where they visit, and what influences their purchasing decision (all information outlined from step 1). Your marketing strategy is then simply matching this information about your customer with the appropriate promotional material. For example, if your customer makes purchasing decisions through referrals, part of your marketing strategy should incorporate Word-of-Mouth (WOM). If your target market is technologically proficient, your marketing strategy should incorporate digital media. If your target market emphasizes community relations, your marketing strategy must ensure you are well-respected and known in that community. This list can go on and on.

While marketing can be thought of as the vehicle to promote your products, sales can be thought of as the actual messaging within that promotion to ensure you acquire customers. The idea here is simple: once you have managed to reach the customer (via marketing), you now need to communicate to them your offering and convince them to make a purchase.

This process is all about trust, sincerity, and showcasing the benefits of your product. Businesses fail because their sales tactics may be:

Overly aggressive: Too many promotions, not enough time spent explaining the product, etc. Aggressive sales tactics convey the message that you care more about the sale than the customer.

Deceitful: Concealing product defects, outlandish claims, etc. Deceitful sales tactics convey a total disregard for your customer's best interests.

Weak communication: Sales pitches that are complex, difficult to follow, or that beat around the bush. Weak communication risks conveying that you haven't taken the time to truly understand your customer's perspective.

Failure to Address the Customer's Needs: Not addressing customers' needs (inability to show their need and how your product solves it), not fully understanding their needs, or simply not caring about their needs. Failure to address your customers' needs conveys the fact that your customers' problems are not your top priority.

When you have created a sales strategy that avoid those four mistakes, we recommend testing your sales strategy on a sample of your target market and seeing if they would purchase from your business or not. If the majority of your sample tells you they are not interested, this is a sign that your sales strategy needs to be improved.

A distribution strategy is deciding how your product actually gets to the customer. Some forms of distribution strategies to consider include:

Undertaking a GTM strategy will require a significant amount of resources (i.e., money, time, labour, etc.). This is why you need to assess whether your business is truly ready to undertake a GTM strategy. To determine if your organization is prepared to undertake a GTM strategy, ensure that your business meets the criteria listed below.

Product-Market Fit: This is one of the main reasons startups/new venture ideas fail, as mentioned earlier. Does your product address and resolve the pain points your customers face? Have you sampled this with your target market (if applicable)?

Compatibility with Core Services: Most businesses try to enter a new market that is similar to their current market. However, if this is done improperly, you risk creating a new product that cannibalizes your current product.

A famous example of this was Krispy Kreme. Krispy Kreme is known for its hot, fresh, melt-in-your-mouth, and high-quality donuts. However, when Krispy Kreme expanded its business by selling its donuts in grocery stores, customers stopped viewing their donuts with the same prestige they used to have. Instead, Krispy Kreme became associated with cheap, old, and typical donuts. That loss of brand value from customers at the grocery store resulted in customers losing appreciation for the brand, which led to reduced store sales.

Sustainability of Current Operations: Ensure that entering this market does not require you to suspend your current operations. For example, if entering this new market means you have to take away multiple employees from their current tasks (and if doing so will result in a loss in revenue), do not enter that market. Remember, a GTM strategy is beneficial to boost revenue, but it shouldn’t reduce your current stream of income. Therefore, you need to assess whether you can confidently enter this new market while still being able to give your best attention to your current market.

Access to Capital (Budget): Entering this market will require you to account for many factors, such as legal costs, marketing, logistics, market research, overcoming entry barriers, and more. Ensure that you have sufficient cash-on-hand to cover the cost of entering this market while still having excess cash to cover risks/unexpected market conditions.

Success of Competitors: Identify the top 3 - 5 firms and assess how they are performing. If most or all of these competitors are not growing, this likely indicates that the market is stagnant/declining (therefore, do not enter the market). If, on the flip side, these few firms dominate the industry and are growing, that does not mean you should enter the industry either, as there is a risk of strong customer loyalty preventing your product from penetrating the market. Instead, you need to identify if the market is growing and whether a segment of the market is unserved or improperly served.

Now that you have completed these steps, it's time for your business to undertake its GTM strategy. We wish you all the best, and we hope that this guide was useful for your business.