Go-To-Market Strategy – Best GTM Strategy Examples for SaaS
Why a go-to-market strategy plays an integral of your SaaS product success?
Well. You’ve done the hard work of building a product or a specific feature that people want. The next step is actually getting it to them. This is where the GTM strategy comes in.
In this blog post, you’ll learn everything about go-to-market strategies. We will cover what they are, why you need them, and how to create one for your SaaS business using real examples. Let’s get started!
- Successful product launches stand on the back of an effective GTM strategy.
- Your go-to-market strategy is simply a roadmap for how you’ll take your product to the market.
- SaaS go-to-market plans can be used in several use cases. They can be used when launching a new product into an existing market, expanding to new customers, or emerging markets.
- GTM strategies are important because they help you build and launch better products at the right time, reducing the chances of your startup failing.
- An effective go-to-market strategy includes a selling strategy, pricing model, target audience, and most suitable channels for marketing your product.
- Focusing on the proper metrics at this stage is crucial to how successful or bad your GTM plan will be.
- The LTV: CAC ratio is recommended to ensure you don’t start running a loss by spending more on acquisitions than you gain.
What is a go-to-market (GTM) strategy?
A go-to-market strategy is a comprehensive outline or guide on how to send your product to the market. It covers everything from who your potential customer or target market is, where they are, the best marketing efforts and sales strategy to reach them, your positioning tactics, pricing strategy, and more.
This go-to-market plan is used by product marketers and their team to ensure you smoothly launch your product to the right customers at the right time and stand out from the competition already existing in the market.
Why do you need a GTM strategy?
When launching your new product or bringing your existing product into a new market, you’ll need a plan to help you easily penetrate the market and grab the attention of your target audience. This is where a go-to-market strategy comes in. It is a detailed plan that helps you figure out the right way to launch.
A study by Harvard Business School showed that 95% of new products launched every year, fail. A GTM strategy can help reduce your chances of failure because:
- It helps you map out all important touchpoints; i.e your potential customers and their pain points, existing competitors, their strategies/business model. It also covers how you position yourself, and what marketing strategies you employ to stand out and gain a competitive advantage.
- GTM strategy ensures that when you launch your product, it fits the user’s needs so the product-market fit is solved.
- You can use it to determine the customer acquisition cost and choose the most suitable strategy for your SaaS company and product. Instead of using unnecessary discounts and other tactics that most SaaS companies use, you’ll be able to make more informed decisions that won’t cost you or your business.
A go-to-market strategy is useful not only in the launch phase of your product but also helps you achieve a product-market fit and set a solid foundation for upcoming product operations.
GTM Strategy vs Marketing Strategy – What’s the Difference?
A go-to-market strategy is a one-time plan that helps you break into the market while launching your product. While a marketing strategy on the other hand extends beyond the initial product launch and involves continuous efforts you’ll take to acquire customers and maintain your market space.
The main difference between a GTM strategy and a marketing strategy is that a GTM strategy focuses on one product. In contrast, a marketing strategy focuses on the actions, distribution channels, and target audience of the value proposition.
Which sales strategy is right for your SaaS GTM strategy?
Before you launch your product, you have to decide on the relevant sales approach you will adopt to acquire customers. In SaaS, there are two main types of sales GTM strategies employed to attract and convert potential customers.
- Product-led go-to-market strategy
- Sales-led go-to-market strategy
Product-led go-to-market strategy
In a product-led go-to-market strategy, your product is the major focus and the center of all marketing and sales efforts. This strategy involves using your product as the driving force for acquisition, activation, and retention.
Here, all users are allowed to experience the product for themselves under a free trial or freemium version. Users don’t need to go through members of your sales team or a sales funnel before they convert. Once they experience your product and receive value, it’s easier for them to become paying customers.
A lot of SaaS companies adopt this sales strategy, e.g, Slack and Dropbox. It is done by building a value-filled product experience that encourages users to stick around.
Sales-led go to market strategy
For B2B SaaS businesses like Salesforce and Microsoft whose products require more hands-on guidance with a longer sales cycle, a sales-led growth strategy is advisable. This go-to-market strategy focuses on the efforts of your marketing campaigns to attract leads, and your sales team’s ability to convince and convert them to users.
Unlike in the product-led sales strategy where your product experience is responsible for conversions, a sales-led strategy’s success relies on your marketing team’s lead generation efforts and how good your sales reps are in selling your key benefits and convincing prospects to convert.
You’ll need to be coordinated and aligned with marketing and sales teams to make this strategy work.
What is the pricing strategy in GTM?
Choosing the appropriate pricing strategy for your SaaS business is one of the important parts of your go-to-market strategy.
How will you sell your product to your target market? As SaaS pricing is subscription-based and requires a lot more commitment over the customer’s lifecycle, you have to be careful when choosing a pricing strategy.
In general, these are the pricing models used by SaaS companies:
- Freemium SaaS pricing model: this works for SaaS businesses whose products may need a longer period to understand or grasp value from. You can use a free plan with limited features to give users a longer time to explore the product and also increase their chances of upgrading to a paid plan.
- Flat rate SaaS pricing model: this involves offering your product and all its features to users at a fixed rate each month. No pricing plans based on features, they get everything at one price.
- User-based SaaS pricing model: this pricing model involves charging your customers based on how many users they have or how many of them will be using the product. It makes things much simpler for your customers because they can pick and choose a plan most suitable for their company size and change it if it increases or decreases.
- Pricing per feature SaaS pricing model: here your users’ subscription costs are determined by how many features they will need. It’s a fair pricing method that allows users to pay for only what they’ll use. If their use case changes or they need additional features, they can always upgrade.
- Tiered SaaS pricing model: most SaaS businesses use this pricing strategy because it allows you to target different types of customers since there’s a plan for everyone. It involves using multiple packages with various features and prices to attract customers.
- Pay-as-you-go SaaS pricing model: this pricing strategy is most commonly used by infrastructure software companies and it involves charging users based on how they use the product. The more time customers spend using your product, the higher their subscription fee is.
How to build a go-to-market strategy?
To build an effective go-to-market strategy, there are several things you must include in your plan. These are the steps that you should take into consideration when creating one:
- Identify the right audience
- Create value proposition and messaging
- Decide on your sales and pricing strategy
- Choose a marketing distribution strategy
- Choose a customer experience strategy and customer funnel
- Decide on the right metrics to track
GTM strategy step 1: Identify the right audience
The first thing to do is identify the right user persona or target market. Your audience will determine every other part of your SaaS go-to-market strategy. What group of people will benefit most from your product? What group will you target when you launch it? And how will you reach them?
Now when you identified the right audience, you can build your marketing plan and marketing campaigns around them. Focusing on one market at a time makes it easier to identify and track the right metrics.
GTM strategy step 2: Create value proposition and messaging
After you’ve identified your audience, the next step is to develop a value matrix that will help you create your unique value proposition. This will highlight user problems and position your product as the best solution.
To do this, list out your buyer personas, their pain points, and if/how your product solves those problems. Once you’ve done this you can then create a value proposition and marketing messages for your landing page and other channels that speak directly to the customer pain points.
GTM strategy step 3: Decide on your pricing strategy and sales strategy
SaaS companies use different types of pricing strategies which we covered in an earlier section. You’ll have to decide what model is best for both you and your customers. Are you going to offer a free trial, maybe a freemium product?
You’ll also have to decide on a selling strategy to employ in getting your product to the end-users. Here are the most common ones:
- Self-service: this doesn’t involve the use of a sales rep or team because users can easily find your products and sign up for them on their own. You’ll, however, need a good marketing team and a good marketing plan that will help drive users to your product.
- Inside Sales model: this requires you to have inside sales reps responsible for nurturing inbound leads and closing them. This is most common with B2B SaaS companies because they have a longer sales cycle.
- The Field Sales model: this selling strategy involves hiring and training outside sales reps who will sell your products to prospective customers. It involves them going out to the “field” to meet with potential customers and try to convert them.
- The Channel model: this involves you partnering with a third party or agency to sell your products. It doesn’t require you to have a sales team. You only need a reliable partner in a related business.
GTM strategy step 4: Choose a marketing distribution strategy
Your marketing strategy should explain how you intend to reach your target audience. How will you create brand awareness, drive demand, and get the attention of potential buyers?
Which channels you choose will depend on the audience you identified and what will be most effective for converting them.
Most SaaS businesses however use content marketing and SEO as a marketing distribution channel to build authority in their field, help users, and also, generate demand. Here are some other commonly used marketing channels by the global SaaS market:
GTM strategy step 5: Choose a customer experience strategy and customer funnel
If you chose the product-led strategy where your product is the main driver of acquisitions and retentions, you’ll need a customer experience strategy. This will ensure users have a smooth ride through your product. It also increases their chances of converting from a free trial or freemium subscription to paying customers.
The strategy addresses the entire customer journey and what can be done to improve customer success and the user experience at each stage.
GTM strategy step 6: Choose metrics to track success
In SaaS companies, product teams will always have multiple growth metrics to track all the time. This can quickly become overwhelming so you need to focus on only a few at this stage.
Some of the key metrics are:
- Customer acquisition cost (CAC)
- Customer lifetime value (LTV)
- Channel-wise spending and revenue
Your CAC and LTV are key performance indicators of how much you’re spending to get customers and how much value they add to your business. If your CAC is higher than the LTV then you’ll need to adjust either your acquisition spend or optimize your product to increase retention.
The normal LTV: CAC ratio for established companies is 3:1, but since you’re just starting, 2:1 is a good ratio.
SaaS Go-to-market (GTM) strategy examples
Here are some real GTM strategy examples that you can see to get inspired. Read these success stories, implement the key points to your business if relevant but remember that each SaaS business is unique and what’s working for others might not work for you. Here we go.
Loom viral sharing
Loom, a screen recording tool was able to gain market adoption quickly because of the virality of their product. Users typically share their recorded videos with teammates or others. This served as an easy way of getting the product around really quickly and also encouraging others to sign up for a free trial.
Taxjar content strategy-really authoritative one
When Taxjar started operations, there wasn’t much content around taxes. So they decided to use content marketing and SEO as their go-to-marketing channels.
By creating quality content that educated their target market and answered their questions related to taxes (especially sales tax), they were able to create brand awareness and gain a competitive advantage as authority figures on the subject, even to this day.
Netflix – one month free
Netflix’s one-month free trial works by helping them easily acquire customers who can experience the product without any cost to them. This model improves their chances of increasing the customer lifetime value since they stand a greater chance of upgrading their subscription once the free month expires.
Slack – word-of-mouth growth and self-service
Even before Slack had its official product launch, it had been tested by several members of its target audience to check for product-market fit. When it finally launched, the product had 8,000 signups that very day and within four months they were at 1.1 million active users.
The word of mouth strategy worked so well for Slack as a market research tool to collect useful product insights before launching. And also in reducing their customer acquisition costs. Slack used the potential customers’ experience of their product, not a sales strategy to grow.
This product-led SaaS company still practices this through their freemium model even though they now have an inside sales team for enterprise customers.
The go-to-market strategy is a key step in product development and launch. Without it, you’ll be sending your product into a market with no plan for how it’ll attract customers, stand out from the existing competition, or grow.
Regardless of how good you think your product is, it’s always best to launch the right way at the right time and to the right audience. A go-to-market strategy does it by setting your expectations and eliminating the need for guesswork or assumptions.
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