Too often companies focus on symptoms instead of nailing the fundamentals of Go-to-Market Strategy. For instance, When the Sales Pipeline Management Report Reveals a Gap knee jerk reactions include hiring a sales guy, updating the sales presentation or holding a webcast. It’s possible that each of the aforementioned tactics might be appropriate, however, a number of fundamental questions need to be asked and answered in a convincing manner. Below are some concepts that any organization needs to understand and embrace, in order to build a managed, repeatable process to acquire and retain customers.
Fundamentals of Go-to-Market Strategy – Market Sizing, Use Case, Differentiation, Value Drivers
A market sizing exercise should include three market cuts:
- Total Market – refers to everything in a specific market (typically how analysts size a market). This is usually a superset of the market opportunity an organization pursues (understanding that not everyone in this definition would buy the offering.)
- Served Market – this is a cut of the market that has a need for your organization’s solution – a match of business problem and solution.
- Target Market – this is the specific segment within the served market that fits the specific use case(s) for which the solution was designed to solve – i.e. those prospects with the highest propensity to purchase your solution.
To gain traction in a market, it’s important to focus on a market segment, and a specific use case that your solution yields tremendous economic value when an organization implements. Then, after successful market penetration within that segment, expand into new use cases within that segment of the market or expand into new use cases or into new markets.
By following this process, a thorough understanding of the business problem, workflows and overall environment will be well understood. This knowledge, coupled with a strategic and tactical perspective for each of the key functional areas involved in the buying process will provide the blueprint to map the sales process to the customer buying process.
The output of this assignment — understanding of the business problem — is to document the specific use case to be addressed by a new product or solution. The work completed at this stage will become the backbone to establish the unique selling proposition, core differentiation and validation needed to effectively sell this product or solution. Specifically, this analysis will be required for the organization to develop content that will empower sales reps to engage in customer lead sales conversations. These insights will not only challenge the way customers view their business, but also introduce innovative thinking about how they should view their business. It will also plant the seed for the unique competitive differentiation that your organization’s solution provides and that can set the agenda for a customer to assess offerings.
Some key questions that need to be answered in a compelling manner:
- What is the business problem that if solved provides significant economic value?
- What are the specific use cases that underpin the business problem?
- To whom are the use cases important and why?
- What are the financial consequences of not addressing the use cases?
- What are the economic rewards to the organization if the use cases are successfully addressed?
- What appears to be the motivating factors to get a prospective customer to take action?
- Why does your organization solve this use case better than anyone other alternative?
- What customer behaviors have to change in order to embrace the solution?
- What proof points would be required, in a customer’s mind, to validate the solution?
- Under what circumstances should a salesperson walk away from a prospect?
The identification of relevant differentiators, probably the most critical step in the process, are really difficult for an organization to agree upon, to document and communicate. But it is critical that they be meaningful and valued by the target audience. Note that differentiators are not a list of features and functions for a technical audience,drafted by a technical perspective. Differentiators are most powerful when they are unique to a vendor but comparative and holistic differentiation needs to be understood and communicated as well as they could be table-stakes.
The goal is to set the customers buying agenda so that the unique differentiators become the foundation for the purchase decision – i.e. when it comes time for the “bake-off” the choice is obvious as there is clear separation between one’s organization and any competitor.
The three types of differentiators are:
- Comparative – several competitors have addressed a challenge with different approaches and the merits of each approach can be debated.
- Holistic – an organization’s partner ecosystem provides the differentiation by building out a complete solution.
- Unique – the thing or things that one’s organization does that no other organization does. These have to be relevant, meaningful, impactful, as well as easily communicated by the sales team and understood by a customer.
Depending on the specific situation, there may be a combination of these three types of differentiation used to communicate the solutions’ uniqueness. However, there has to be some distinct differentiation for an organization to thrive long-term and enjoy sustained growth. The key is for an organization to rally around the unique differentiation and build relevant assets and plays for the sales and marketing teams to penetrate the market. Prospects must be targeted that “fit the profile”—i.e. those that will have a high propensity to purchase based on what they value as that unique differentiation.
An effective go-to-market strategy requires Value Drivers to be developed, learned and articulated consistently that are meaningful, relevant and actionable. Value Drivers serve as the bridge from the customer’s business problem to the vendor’s solution. While value drivers support the unique selling proposition, they are created specifically for each influential persona within the customer’s buying process. To be most effective, value drivers should be tied to a customer’s organizational objectives as well to the specific objectives of the functional group. And, they should include the tangible and quantifiable outcomes that drive value for a customer.
It’s important to construct Value Drivers for each of the key personas in the customer buying process. In many cases, the Value Drivers for each persona will include a strategic and tactical (or operational) element. In general, Decision Makers and Approvers tend to fall into the strategic dimension of the framework, while Recommenders and Influencers comprise the tactical or operational dimension. In terms of the functional areas of the business that may actively participate in the purchase decision they may include Line-of-Business (LOB), Information Technology (IT), Sales, Marketing, Finance, etc. While all of these functions should theoretically coalesce around the larger company objective, each function has different goals, objectives and strategies. When constructing compelling Value Drivers, it’s critical to understand the motivation for each functional and to play into it.
In a typical organizational structure, acknowledgement exists of the business issues and the corresponding financial metrics (cost, revenue, profitability, productivity, customer satisfaction) for inaction and action. In a sense, Value Drivers require a value proposition to be constructed for each key audience in the buying process that supports and reinforces the overall umbrella unique selling proposition for the business. The difference is that the Value Driver has specific meaningful and relevance for that specific audience, and carries with it a corresponding, quantifiable financial metric. By following this format, the sales rep can not only provide innovative insight but also introduce financial motivation for the prospect to act now.
Fundamentals of Go-to-Market Strategy – Target Account Profile, Buyer Behavior Model
Target Account Profile
The Target Account Profile (TAP) is a profile of the ideal prospect that has a high propensity to purchase your solution. Ideally, the Target Account Profile is used to define the served market. The TAP is useful for focusing the organization.
Specifically, the Target Account Profile is a detailed description (demographic, transactional, social behavior, digital behavior and interactive behavior) of a prospect that, if engaged with the sales team, will exhibit a high probability to purchase.
Buyer Behavior Model
A Buyer Behavior Model is a representation of the customers buying process that clearly illustrates how a prospects organization makes a purchase decision. Typically, a purchase decision in B2B marketing begins with a “trigger” —i.e. the impetus for why a particular topic is of interest or importance to the prospect now. This then extends all the way through to how this targeted prospect interacts within the organization to make a purchase.
Title or Role
It’s important to identify the individuals who are key to the a purchase decision. Organizations sometimes identify title (CXO, VP, Director) while others focus on functional role (Marketing, Sales, Exec Management, IT, etc.). In both cases, the key is to narrow this down to as few as possible. In addition, a strategic and an operational perspective need to be accounted for in any successful go to market plan.
Stages or Phases
A Buyer Behavior Model will also include the stages of the prospective customer’s buying process. The number of stages will vary by each organization as company size, industry, etc. impact the sales process.
A basic concept in B2B sales is that at each stage, a customer has a specific objective or need that a vendor must align to, in order to be meaningful and relevant. If this alignment does not occur, a vendor’s communication efforts are simply considered noise and will be ignored or disregarded—stalled sales cycles.
The number of stages and names of the stages in the buyer behavior model will vary, however, the guiding principle is to mimic the customer buying process — not the sales process. The goal is to get inside the head of the prospective orgnaization and to perceive the vendor from the lens of the buyer. It’s important to try and gain insight into:
- The information they need
- Their motivation
- Why the information is needed
- The source of the information
- The right format for the information
- How the information is shared
Fundamentals of Go-to-Market Strategy – Distribution Strategy, Roles & Responsibilities, Organization Structure
Distribution Strategy & Coverage Model
The distribution strategy and coverage model outlines what is being sold, by whom, to whom, at what price points and the corresponding sales and marketing strategies to acquire customers.
Questions that should be answered include:
- Will the organization be responsible for 100% of all sales or through channel partners?
- Will the offering be sold through a direct sales force, an inside sales force, an ecommerce site or some combination of the three?
- What is the market coverage model, sales strategy, compensation plan, sales training and sales tools for each distribution channel?
- How many direct sales reps,, sales engineers, sales development reps, sales enablement resources, lead generation and management personnel are needed?
- When should each person be hired?
- Who should be hired first? Second? Third?
- What lag should be built in for hiring, ramping?
Sales and Marketing Terminology, Roles and Responsibilities
A managed and repeatable revenue generation process requires Marketing and Sales to work hand-in-hand. Establishing a mutually agreed upon vocabulary facilitates efficient and effective communication in a meaningful and relevant context. Next, roles in the Marketing and Sales funnel must be defined and specific responsibilities assigned to each role. Then, each resource needs to be empowered and held accountable.
Deliverables should include:
- The identification of whether it is a marketing or sales stage
- The name of each stage
- A definition of each stage
- The marketing and sales criteria required at each stage
- The owner of each stage and the corresponding responsibilities
- The estimated timing required for each stage
- What should be in the dashboards, metrics and KPIs
- The communication plan
- How feedback is incorporated in the process
Few companies or products successfully penetrate the market and reach revenue expectations when Marketing and Sales are not organized to generate revenue. While the specific Marketing and Sales personnel do not necessarily need to be direct reports or permanent employees, there are certain Marketing and Sales resources required to optimize an organization’s go-to-market strategy.
The design, development and execution of the organization has to start at the solutions conception and the entire organization needs to be proactive (from cradle to grave) to guide the development of a solution—products can’t be thrown over the fence when they have completed the development cycle. The knowledge of the use case, business problem, workflow, terminology, business impact and the roles and titles impacted are critical for the organization to know and understand. The appropriate Demand Creation, Demand Management, Sales Enablement and Sales People need to be on-boarded in the right sequence, in the right ratios and embedded into the sales process for the organization to be successful.