What is a Go-to-Market Strategy?
In a nutshell, a Go-to-Market Strategy (GTM or G2M Strategy) is a tactical action plan that sketches the activities necessary to succeed in a new market or with a new type of customer. It can refer to pretty much anything: launching a new product line, re-launching your startup/brand, entering a new market region–– or even moving a current product from one market to another.
The strategy is used to show how your startup will utilize its resources (employees, distribution channels, online presence, brand value, etc.) to deliver its unique value proposition to its customers. It's also used to achieve a competitive advantage and reach that sweet product-market fit.
What is the end goal of a Go-To-Market Strategy? Try to make your customer experience as great as possible by targeting the people that value the product or service that you offer. When a product or brand launches with little to no success, it's not always because the product wasn't any good, but because it never landed in the hands of the right people – the people who would appreciate it.
Why is a Go-to-Market Strategy Important?
A go-to-market strategy is essential for any new product launch. It determines how a company will reach its target market. It includes everything from developing and implementing marketing and sales strategies to finding and signing up new customers. A go-to-market strategy can also help a company determine which products to sell, where to sell them, and at what price.
Without a go-to-market strategy, you could focus on the wrong target customer or product category and run the risk of failing. An effective go-to-market strategy helps reduce your chances of wasting valuable time, money, and resources on a failed product launch.
How do You Make a Go-to-Market Strategy?
Making a go-to-market strategy mostly entails following steps and making considerations and choices based on your startup's product or scenario. When you are ready, consider the following:
- Consider Market and Cultural Variations: Think about the market's specifics regarding economics, politics, legislation, languages, price sensitivity, and seasonality. Understand how cultural variances in your target market can influence customer actions and decisions.
- Identify the Target Market: Your go-to-market strategy should be tailored to the interests and demographics of your target market. This will help you identify which channels to use, what products to offer, and how much money you need to spend on marketing. You'll also need to consider your target market's needs and wants, so you can create a product that meets those needs.
- Find the Product/Market Fit for Your Target Market: The goal is to find a way to reach as many potential customers as possible, at the lowest possible cost and in the shortest amount of time. It's great to strive for these goals, but in the startup world, things or not usually as simple, so try your best to get as close to product/market fit as possible.
- Define the Value Proposition: When creating a go-to-market strategy, it is crucial to define the value proposition for your product or service. Make sure you communicate it clearly. Doing this will attract potential customers and partners who understand what you are offering and why it is valuable.
- Research the Market: Research the day-to-day operational requirements of your target market. These could include the payment systems used, financial and legal requirements, how the tax system works, employee rights, etc.
- Understand the Customer Journey: This includes understanding your target market, what motivates them, and where they are in their buying process. You can then determine your customers' purchase funnel and determine which stage is the most important to reach them effectively.
- Marketing Strategy: Make sure you consider the different aspects when developing a marketing strategy, such as target market, product or service offerings, pricing, and distribution channels. It's essential to have a solid plan in place to track your progress and make adjustments as needed.
- Make Sure You and Your Startup are Ready: Be ready to enter a new market. You can strategize all you want on paper, but eventually, you will have to make the actual dive into the market. This may be a daunting prospect, so make sure to be mentally prepared for the ride and have a one-page action plan ready for the journey.
Real-World Example of a Go-to-Market Strategy
If you drink wine, chances are you've seen an Australian Yellow Tail wine bottle on the supermarket/liquor store shelf. Yellow Tail has turned into one of the top-selling brands of wine globally, ranking third by volume of wine consumed with a whopping 11.5 million cases per year. That didn't happen by chance. They had one of the best go-to-market strategies to penetrate an over-saturated and highly competitive US wine market, eventually leading to global success.
The Yellow Tail Story 🦘
When Yellow Tail, a family-owned Australian winery, entered the US market in 2000, they had ambitious goals. The global wine market was packed to the brim with excellent quality French, Italian, Spanish, and Californian wines. The pricing points were high by today's standards, and they were considered wines for wine drinkers.
But in the US, where Yellow Tail initially focused its go-to-market strategy, wine drinkers accounted for only 15% of all alcohol consumers. They saw a huge opportunity to target a whole new market - non-wine drinkers. In other words - 85% of all alcohol consumers. But to do this, they had to have an impressive go-to-market strategy - one that would differentiate them from the traditional snobbery associated with quality wines.
So what did they do? They created a wine that beer lovers, alcopop drinkers, and cocktail enthusiasts would also love. They considered their product, packaging, communication, price, and marketing before launching their wine to the American masses.
Product: They reduced or completely removed acid and tannins from their wine (the ingredient that makes red wine feel like you have fur on your tongue). Doing this is a red flag for wine connoisseurs as these are considered the elements that give wine body and complexity. But Yellow Tail didn't care about these wine drinkers. They targeted people who usually never drank wine and wanted to make the product fruity and easy to drink for first-timers.
Packaging: Nowadays, wine labels are all about grabbing your attention. Back in 2000, things were different. Traditional-looking wine labels with detailed information on region and grape variety dominated. Yellow Tail did away with these. Instead, it focused on branding its wines to non-wine drinkers - adopting an artistically designed colorful kangaroo logo and removing unnecessary details about region and grape from the front label. The packaging made it stand out in a sea of traditionally packaged wines and gave a sense of comfort to people who were daunted by the wine variety.
Communication: Yellow Tail Used a no-nonsense tone of voice that explained each wine in layman's terms. You didn't need to be a sommelier to understand what was happening with the flavor, texture, density, body, complexity, etc. By removing the often intimidating wine jargon and using the KISS principle (Keep it simple, stupid), they reduced the barriers for non-wine drinkers making it much more accessible when choosing a wine off the shelf.
Pricing: This one was simple. They wanted a price point representing a budget-friendly alternative to the more expensive French and Italian wines. A $5-$10 price for their bottles meant it was reasonably priced without being dirt cheap (and considered a bad wine by just about anyone).
Marketing: A clever marketing campaign was adopted, whereby approachable young people offered tastings in supermarkets and liquor stores. The aim was to break down misconceptions non-wine drinkers had about buying and drinking wine.
And so it happened, Yellow Tail entered the US wine market. With their bright, fun, simple, and happy brand, they started with a tiny portion of the market and ended up as the most imported wine into the US, without any advertising campaigns - just a top-notch go-to-market strategy.
Finishing up
Regardless of how wacky a product is or how challenging a market may seem to penetrate, chances are a customer base out there wants it. If you don't find and target those people, the product could fail. That is why you'll need a rock-solid GTM Strategy for how you're going to capture market shares. You'll have to design a stream of communication that can reach and grab the attention of people you expect will be interested in what you have to offer.
You should find a way to communicate so your target group finds it aesthetically pleasing, with a tone of voice they like and relatable values. That is the recipe for success. If they find your brand and advertising interesting, funny, and engaging, you'll improve the chances that they'll try your product – and discover that they'll love it.