Originally published in the House of Revenue® LinkedIn Newsletter: Scaling Beyond the Plateau.
Did you know: 61.9% of respondents to The State of Go-to-Market Report in 2022 said they always put together a strategy when taking products to market, yet only 33.3% have a systematic approach that they implement consistently?
Creating a successful go-to-market (GTM) strategy is essential for any company that wants to make an impact in the marketplace. However, there are many ways companies can fail when executing their go-to-market plans.
From not understanding your target audience and having a poorly defined value proposition to a lack of research and analysis or unclear messaging, it's essential to be aware of common pitfalls so you can avoid them.
In this article, we will look at 6 key areas where companies often struggle with their go-to-market strategies - and how you can overcome these challenges.
Area 1: Lack of Market Research & Analysis
Market research and analysis are essential for creating an effective go-to-market strategy. Companies must stay up to date on market trends and insights to understand the needs of their target audience's needs and what competitors are doing.
Without this information, companies risk launching products or services that do not meet customer needs or expectations which can lead to failure in the market.
Ignoring Market Trends & Insights:
Not staying informed about current industry trends can cause a company to miss out on potential opportunities or be unprepared for changes in the marketplace. According to a study conducted by PwC, companies that benchmark can achieve 69% faster growth and 45% greater productivity when compared to those that don’t.
Companies should regularly review data from sources such as surveys, focus groups, interviews, competitor analysis, etc., so they have an understanding of what customers want and need from them. A few of our favorite market research tools and companies include:
Not Testing Products or Services Before Launch:
We know this seems like a given, but you’d be surprised by how many companies do not test their products or services before they take them to market. It is crucial for companies to test their products or services before launch to ensure that they meet customer expectations and requirements. Your test could be as simple as gathering a small group of end-users before launch to get feedback on features and find any usability issues your team may need to improve or fix before going live with the new product/service.
Companies should also consider creating a feedback loop that includes gathering feedback from prospects who did not purchase their product/service in order to gain insight into why these individuals chose not to make a purchase decision. This will also allow your team to learn if there are additional features they should consider adding to your product or service roadmap.
Without thorough market research and analysis, a go-to-market strategy can fail to reach its full potential. To further maximize your chances of success, ensure that all of your departments are aligned around the same goals and objectives and that you’ve priced your product well to drive revenue growth. More on this later.
To Recap: It is important to stay informed about market trends, test products, and services before launch, and gather feedback from customers, prospects, and the individuals who choose not to purchase your offer in order to create an effective, iterative go-to-market strategy.
Area 2: Not Understanding Your Target Audience
When companies don’t understand their target audience on a deep level, they risk creating products or services for the sake of doing work, and their efforts will lead to an output that doesn’t address customer needs, leading to poor sales performance, and wasting resources on ineffective strategies that fail to engage their target audience, resulting in missed opportunities for revenue growth.
Not Knowing Who You Are Selling To:
Companies must understand their target audience to reach them effectively. This includes knowing your ideal customer's demographics, interests, and needs. As we call it at House of Revenue®, your Ideal Customer Profile (ICP). Without this knowledge, companies risk wasting resources on ineffective strategies that fail to engage their target audience.
For Example: A company selling outdoor gear may not realize that they should target hikers and campers instead of athletes or cyclists if they want to maximize sales because their messaging resonates more with the outdoorsy market, and they’re the ones buying the company’s products.
To take this a step further, that outdoor gear supplier is probably wasting their advertising budget to sponsor cycling marathons when they could be gaining a greater return on investment (ROI) by sponsoring avid hikers with a following full of that company’s ICP, aka influencers.
Not Knowing What Your Customers Need:
It’s important for companies to know what their customers need in order to create products or services that meet those needs. Companies should research the market and gather feedback from customers and prospects to gain insight into customer preferences and trends.
If you want your go-to-market plan to succeed, we recommend crafting an in-depth Buyer Persona for each archetype in your target market.
You may be asking, what is a buyer persona? Based on data and research, HubSpot describes buyer personas as semi-fictional representations of your ideal customers.
Better yet, create a persona for each type of person on the buying team that’s responsible for deciding whether to work with you or not. Plus, this buyer research will benefit more than your marketing team.
As stated by Forbes, Buyer Personas will help save time for your sales team. It saves time because personas provide your team with additional information on what your customers want, their needs, the pain points they’re struggling with, and how your solution or service solves them. When you have well-defined personas, you will save time by already having a solid understanding of what kind of solution is most important to them.
Here’s a complimentary resource from our team to help guide you as you create your Buyer Persona.
Area 3: Poorly Defined Value Proposition
A value proposition is a statement that clearly communicates a product's or service's benefits to your ICP and why it is better than your competitors. It provides crystal clear clarity for your entire internal team as well. A well-defined value proposition is essential for any business to succeed in the market.
Failing to Differentiate Yourself from Competitors:
Companies need to differentiate themselves from their competition by highlighting unique features, services, or solutions they offer that others don’t have. Without this differentiation, customers may not understand what makes your company different and why they should choose you over another provider.
For example: Did you know 73% of Generation Z consumers are willing to pay 10% more for sustainable products, according to The State of Consumer Spending report from First Insight? Generation Z is ushering in a new era of consumerism, where personalization and sustainability are key factors driving purchasing decisions. From the results, it appears that Generation Z is more likely to align their spending habits with companies whose values match their own on political issues as well as social responsibility when compared to previous generations - Millennials and Gen Xers included.
Surprisingly, however, Baby Boomers appear least impacted by social/environmental considerations when looking at various buying behaviors.
Some ways you could differentiate yourself are:
1. Publicly Stand for a Worthwhile Cause
Consider Patagonia and how they made the powerful move to stand up for what they believe in and what their customers value: “Earth is now our only shareholder...every dollar that is not reinvested back into Patagonia will be distributed as dividends to protect the planet.”
2. Create a Best-in-Industry User Experience (UX)
One company that does this well is DoorDash. Consider the ease of simply clicking a few buttons within their easy-to-navigate user interface to order lunch, following the delivery driver as it comes to your door, and receiving a notification once the order has been delivered. This easy-to-use and straightforward UX is society's expectation today. If your UX is the best on the market, consumers will adopt and advocate for you faster than your competition.
3. Consistent Branding
Yes. As much as you may not want to believe it, your brand plays an instrumental role in differentiating your company from your competitors. Let’s take a look at BarkBox On top of having excellent quality dog toys, they’re the only dog subscription toy and treat box I can recall on the market.
4. Get Niche within Your Industry
For example, let’s take a look at a company called Spotz. They provide an online marketplace where community members can find local spaces to rent for any event or sport they want; they’re technically in the Space as a Service (SPaaS) industry. They have a TAM (Total Addressable Market) of $3.62 Billion. Can you imagine trying to go after a market that big all at once? You’d be basically putting money into a shredder because your messaging would be so generalized that it wouldn’t convert.
That’s why they chose to go after key niches that could immediately benefit from their services, like city governments, parks and recreation depts., banquet and event venues, gyms and sports facilities, churches and faith centers, and community centers, to name a few. Then, they created messaging that deeply aligns with the pain points of their ICP within each niche.
5. Deliver a World-class Customer Experience
We can’t express this enough:
The Customer’s Journey is as important as The Buyer’s Journey - and the handoff from Sales to Customer Success is critical to your go-to-market success.
Why? That’s easy. When your clients experience a seamless implementation process, it’s easier to expand your product or service offerings within their account. It also helps create raving fans of your brand. In a report conducted by Neilson, 92% of individuals trust word-of-mouth recommendations above all other forms of advertising. This stat makes consumer advocacy one of the best forms of marketing with the greatest ROI.
Failing to Communicate Benefits of Your Product/Service Clearly:
Customers need to know how your product or service will benefit them before making a purchase decision. Companies must ensure their messaging clearly communicates the key benefits of their offering so customers can easily understand what sets them apart.
In order for companies to succeed in today's competitive landscape, they must connect with customer needs and desires through effective full-funnel communication strategies such as targeted omnichannel marketing campaigns, personalized emails that are sent at just the right time, and social media posts on the channels your ideal buyer hangs out.
When you customize your messaging to the consumer’s stage in The Buyer’s Journey, these strategies demonstrate an understanding of customer pain points and provide relevant solutions tailored specifically for them.
At House of Revenue, we use The Bowtie Funnel as a visualization tool for our clients. Here it is for your reference:
To Recap: Companies must differentiate themselves from competitors, clearly communicate the benefits of their product service, and connect with customer needs through effective communication strategies in order to succeed in today's competitive market.
To ensure success, it is also important to have clear messaging and positioning, which we dive into next.
Area 4: Unclear Messaging & Positioning
Once you have identified your target audience and have a crystal clear value proposition, companies need to understand how to best reach their ICP with marketing messages tailored specifically for them. This includes understanding which channels are most effective such as social media platforms like Facebook or Instagram, versus traditional advertising methods like radio or television ads.
Messaging and positioning are key components of any go-to-market strategy as they help communicate a company’s brand story effectively across channels while connecting with customers’ needs and desires at the same time. According to marketing statistics gathered by HubSpot, "Consumers are most frustrated with inconsistent brand messaging."
What is your brand message? It’s the (deliberate) style, word choice, tone, and syntax your brand uses to communicate with visitors, shoppers, and other audiences. Your brand messaging might be luxe and formal, friendly and informal, a little bit sassy, or direct and instructional, just to name a few.
Companies must ensure their messaging is clear, consistent across channels, visually appealing, and resonates with customers’ needs if they want their go-to-market strategy to be successful in the long run.
Confusing Brand Storytelling:
Companies must create a compelling narrative around their products or services that communicates what sets them apart from competitors and connects with their target buyers. If your message isn't concise enough, it can quickly confuse potential customers who may not understand what you offer or why they should choose you over another provider.
You can help ensure your brand story is easy to follow by using simple language without industry jargon and visuals to help explain complex topics whenever possible to avoid confusing your audience.
Misaligned Messaging Across Channels:
Different messages on each channel can disorient customers trying to learn more about your product or service. Make sure all your marketing materials have a unified look and feel so that no matter where people find out about you - whether through social media ads, email campaigns, blog posts, etc. - they will always get the same information about your offering.
Visuals such as images, videos, or infographics can be extremely helpful when communicating complex ideas but only if used correctly.
Poorly designed visuals can actually detract from the message instead of helping convey it.
So make sure whatever graphics you use fit into the overall design scheme of your campaign and support its main points without overwhelming readers with too much detail at once.
It's essential to have an unambiguous, consistent message across all channels to reach your target audience effectively. Failing to invest in the right areas can cause costly missteps and hinder what would have been a successful go-to-market strategy. Next, let's look at how budget allocation affects your go-to-market efforts.
Area 5: Inadequate Budget Allocation
Did your heart just sink in your chest at the mention of budget allocation? You're not alone. However, proper budget allocation is vital for any successful go-to-market plan. Companies should be mindful of where they invest their resources to ensure maximum return on investment (ROI) and campaign success.
Underinvesting in Advertising or Promotion:
According to The 2022 State of Go-to-Market Report, just under half of the respondents (47.6%) said they believe their company under-invests in launches, overshading the 27.4% who believe the right amount is being invested.
Underinvestment can lead to missed opportunities and a lack of awareness about your product or service. Without proper visibility, reaching potential customers and generating sales is difficult. Investing in advertising and promotion allows you to get your message out there, build brand recognition, and increase customer engagement.
The benchmark for marketing spend is between 11 – 17% of total revenues generated for scaling companies, while the benchmark for sales budgets ranges from 25 -50%. Of course, this amount can vary significantly from one industry to the next. Think of the consumer-packaged goods industry, where budgets can easily exceed 25% of total revenue while others, such as utilities or mining, may spend less than 5%.
It's important for businesses to understand their own sales cycle relative to the return on capital invested in order to determine what percentage is right for them - particularly when factoring repeat vs net new logo revenues.
Overinvesting in Non-Essential Areas:
As the section title states, overinvesting in non-essential areas can hurt ROI as it takes away from other areas that may need more attention, such as marketing, research and development, and customer service. It’s essential to focus on what matters most when allocating funds so that you don’t waste money on unnecessary items or services that won’t benefit the company long term.
When creating a budget for your go-to-market strategy, consider short- and long-term goals while monitoring market trends and insights. This will help ensure success now and in the future by providing enough funding for critical initiatives while still being able to invest in new projects or products down the line without overspending or cutting corners elsewhere.
Area 6: Poorly Defined & Executed Go-To-Market Plan
A plan is worth nothing if it isn’t executed well. Without a well-defined go-to-market plan, companies can easily underestimate the resources needed for a successful launch, fail to align teams around objectives and overlook pricing's impact on revenue growth.
Underestimating People Resources Needed for Successful Launch:
One key area we note when our clients come to us is that they didn’t allocate enough people resources toward launching a new product or service, leading to costly mistakes down the line. (Like not having enough support staff to handle the inbound requests for implementation after launching a new product or service.) It’s important to have an adequate budget set aside for recruiting, staffing, training, and other areas, such as market research, design, development, etc., to ensure success upon launch.
Some ways you could keep the cost of human resources down include:
- Utilizing an all-in-one CRM like HubSpot, where your Marketing, Sales, Operations, and Customer Success Departments can all operate out of the same system - creating a single source of truth.
- Automating absolutely everything you can with the help of your Revenue Operations (RevOps) team. (HubSpot is also an excellent tool for this.)
- Amping up content production with the help of Artificial Intelligence, consider looking into long-form ai content platforms like Content at Scale.
- Utilizing a learning management system (LMS) to speed up employee onboarding and training. Like this LMS called Learn & Grow, offered by Payroll Network.
Failing To Align Sales, Marketing & Customer Success Teams Around GTM Goals & Objectives:
When teams are misaligned with each other, they can end up working against one another instead of together, which can be detrimental when trying to launch a new product or service successfully. All of your departments need to be trained on your new product or service and understand what their roles are within the launch, so they know how best to support each other during this process.
If your interdepartmental teams are at witts end with each other, consider establishing SLAs (service level agreements) between all departments. This way, everyone will know what is expected of them, and you’ll be able to create an enjoyable working environment for everyone.
Not Fully Grasping How Price Impacts Revenue
Understanding how pricing will affect revenue growth over time is one of the most important aspects of any go-to-market strategy. Companies must consider all factors when setting pricing strategies to maximize future launch and campaign returns. If prices are too high, customers may be less likely to purchase, while if prices are too low, profits could suffer due to a lack of margin.
After all, 70% of respondents to The 2022 State of Go-to-Market Report said launches have either a “notable” or “major” impact on revenue.
When it comes to launching a brand-new product or service, companies should not underestimate the resources needed for a successful go-to-market launch. Your Sales, Marketing, Product, and Customer Success teams should all be aligned around the same goals and objectives to ensure everyone is on the same page.
FAQs Our Team Gets in Relation to Go-To-Market
What does go-to-market mean?
Go-to-market (GTM) is a strategy companies use to effectively reach their target customers and maximize revenue upon product launch or taking a new company to market. It involves understanding the customer’s needs, developing products or services that meet those needs, creating an effective pricing model, building a distribution channel for the product/service, and launching marketing campaigns to promote it.
GTM also includes post-launch activities such as tracking customer feedback and making necessary adjustments to ensure maximum success. Ultimately, a GTM strategy helps companies increase sales and build brand loyalty with their customers.
What are some go-to-market strategies you recommend?
- Leverage Existing Customer Networks: Utilize existing customer networks to identify potential new customers and expand your reach.
- Develop Strategic Partnerships: Form strategic partnerships with other companies in the same industry or related industries to increase visibility and create additional growth opportunities.
- Create Targeted Content Marketing Strategies: Use targeted content marketing strategies such as blogs, videos, podcasts, webinars, and social media campaigns to engage potential customers and build brand awareness.
- Invest in Paid Advertising: Invest in paid advertising on platforms like Google Ads or Facebook Ads to reach a wider audience quickly and cost-effectively - just make sure your ICP is on the platform you choose.
- Focus on Retention, Expansion, and Referrals: Focus on retention by providing excellent customer service and incentivizing referrals from existing customers through loyalty programs or discounts for referring friends, family members, or even colleagues.
Does the responsibility for creating a go-to-market strategy fall on Marketing or Sales?
The responsibility for creating a go-to-market strategy should involve every department, with an executive like a Chief Revenue Officer at the helm. It involves creating content to reach target customers, positioning products or services in the market, developing campaigns to generate leads and conversions, and measuring success through analytics. Go-to-market focuses on understanding customer needs and delivering value that meets those needs. By combining the efforts of Sales, Marketing, Customer Success, and RevOps into one cohesive strategy, companies can effectively attract new customers while retaining existing ones.
In Conclusion
To avoid GTM failure, you must understand your target audience, have a well-defined value proposition, extensive market research and analysis, clear messaging and positioning, as well as adequate budget allocation. Failing to do any of these things can lead to costly mistakes that could have been avoided with proper planning.
With the right approach, companies can create effective go-to-market strategies that will help them reach their goals and drive revenue growth while building upon a firm foundation built for scale.
Are you looking to maximize your revenue growth and customer experience?
Look no further than House of Revenue. Our Fractional Chief Revenue Officer and Fractional Chief Marketing Officer Teams can help align your entire customer journey and optimize it for success. Our CRO/CMO teams of fractional executives focus on alignment throughout the entire Bowtie Funnel, including The Buyer’s Journey and The Customer’s Journey, so you can consistently attract, engage, and delight your customers and holistically drive revenue growth.
Contact us today, and let’s chat to see if we’re the right fit for you and your team on your journey to grow revenue. (This is not a sales pitch.)
PS: We’re not meant to be long-term like a go-to-market agency. We are here to build your Revenue Engine, grow your revenue, and empower your team to take over and scale once our time together has ended.
Do you want to learn more about our process? Download our complimentary House of Revenue Methodology eBook.