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Oct 12, 2024
A Go-To-Market (GTM) strategy is a comprehensive plan that outlines the steps required to successfully launch a new product or expand your business into new markets. It ensures that your product targets the right customer segments with the right messaging through the right channels at the right time.
In this guide, written by ex-McKinsey and Bain consultants, you'll learn how to craft a go-to-market strategy. We will also cover how a solid go-to-market template can help structure and communicate your analysis and recommendations.
Customers, not markets, buy your products, so it's critical that you provide the right offers at the right price and time to the right customers through the most effective channels.
A go-to-market (GTM) strategy outlines precisely this. It's a comprehensive plan describing how to launch a new product or introduce an existing product into a new market. This strategy is essential for ensuring the successful rollout of your product by addressing four key questions:
Launching a product requires a significant investment, but even the most innovative product can fail without the right plan. McKinsey's research shows that for every successful attempt, about four fail. These failures aren't limited to inexperienced startups. Even large, sophisticated corporations and experienced entrepreneurs often struggle when entering new markets.
A comprehensive go-to-market (GTM) strategy helps businesses avoid costly missteps, such as targeting the wrong customer segments or entering a market flooded with similar products.
Peloton retail store in a New Jersey luxury mall
When Peloton first ventured into the competitive US home fitness market, exercise bikes were far from an exciting product category. But the brand had a trick up its sleeve—instead of competing on gym floors and going through established fitness retailers, it went straight to where high-end consumers shop.
In late 2013, Peloton opened its first store in a New Jersey luxury mall. Retail stores, especially in high-end shopping malls, have been a central strategic pillar for Peloton ever since.
Even though most Peloton customers buy their bikes online, the retail stores play a vital role in the company's go-to-market strategy. They provide visibility and top-of-funnel awareness and help customers in the mid-funnel consideration phase ("I've been thinking of buying one, but I want to see it in person and try it out first.").
Peloton went from a scrappy startup to a multi-billion-dollar public company in less than eight years, thanks to an innovative product and a bold and well-planned go-to-market strategy.
You need a go-to-market strategy whenever you introduce a product or service into the market.
A few examples:
A go-to-market strategy and a marketing plan are both crucial components of a business's overall approach to reaching its customers, but they serve different purposes.
The go-to-market strategy is a specific plan for launching a product or entering a new market. It's tailored to a particular launch and focuses on product positioning, pricing, and initial customer acquisition, addressing unique market challenges or opportunities.
In contrast, a marketing plan is a long-term, ongoing strategy to achieve overall marketing goals. It's broader, involving advertising, social media, and loyalty programs, not confined to single product launches. It aims to build and maintain brand presence and customer loyalty.
While a GTM strategy is short-term and launch-specific, a marketing plan is a comprehensive, long-term approach encompassing various marketing activities. The go-to-market strategy is a focused component of the broader marketing plan, each serving distinct but complementary roles in a business's market strategy.
The following framework, adapted from Bain's go-to-market system, outlines the main elements that should go into your go-to-market strategy.
Your existing business unit strategy is the starting point for your go-to-market strategy. From here, the go-to-market strategy framework consists of three main parts:
Every GTM strategy involves lots of moving pieces, whether you're launching a new product or exploring new markets. A great go-to-market strategy requires both the right content and structure. Basing your plan on a proven framework and presentation template can accelerate the process, help maintain the proper structure, and offer ideas for designing and organizing various slide types.
Our PowerPoint go-to-market Template follows the approach discussed here. It features 217 template PowerPoint slides designed by former McKinsey, Bain, and BCG consultants. Additionally, it includes three examples of what an effective real-life go-to-market strategy can look like.
How do you turn the go-to-market framework above into a comprehensive strategy?
Let's go through the process step-by-step:
Aligning your GTM strategy with the overall business strategy and objectives is crucial for ensuring your new product or market expansion supports your organization's broader goals and resource constraints.
Keep the following key questions in mind when developing your GTM strategy:
The key to your go-to-market strategy is knowing who to sell to. To answer this question, you need to identify customer segments that you can differentially serve and derive value from.
Customer segmentation is the act of grouping your target market into segments based on similar traits, needs, and/or behavior patterns.
B2B and B2C markets have different characteristics, needs, and decision-making processes. Therefore, they require different approaches to segmentation.
Here are a few common approaches to B2B and B2C segmentation:
B2B Segmentation:
B2C Segmentation:
Segmentation slide summarising how an airliner segments the market for B2C leisure travelers.
Before you can tailor your product's value proposition and select a target audience, you need to understand the market and the competition.
Guide your analysis with these questions:
Conduct a competitive market analysis to identify direct and indirect competitors, and understand their strengths and weaknesses compared to your own.
Competitive analysis slide highlighting how various hotel chains target distinct customer segments
Combine your market segmentation and your competitive market analysis and select the target segments you want to go after.
Consider factors such as segment size, growth potential, willingness to pay, competition, customer needs, and pain points, your product's unique strengths, and the segment's alignment with your overall business goals and resources.
The next step is to design the differentiated messages you'll convey to your target customers — your so-called 'value proposition'.
While a value proposition may seem straightforward, an effective one is intricate and nuanced. It addresses several key questions:
Think about the unique benefit that you are providing. If you can define this simply, concisely, and accurately, you have a value proposition of worth to your audience.
Remember, a value proposition isn't a broad positioning statement aimed at mass appeal. The goal is not to appeal to everyone, but to be the perfect solution for your target audience.
Consider this scenario: A business seeks software with comprehensive customer support due to its limited experience with the product. A software company that emphasizes its top-rated customer service team and affordable, extensive support options—features its competitors lack—is likely to attract such businesses.
Let's look at another example: Uber – a travel service provider that meets low-cost and on-demand needs. Immediacy, affordability, and simplicity are at the heart of their value proposition.
Now that you've identified your target segment and messaging, you can move on to mapping the customer journey—the path your target segment customers take from realizing their problem to considering your product as a solution and deciding to purchase.
Often, the customer journey is visualized as a funnel with three distinct stages:
Understanding this journey allows you to tailor your marketing and sales efforts to effectively guide customers through each stage, increasing the likelihood of conversion.
Most companies combine marketing and sales strategies when designing the go-to-market strategy that will best serve them.
However, if we were to generalize it, there are four go-to-market sales strategies: self-service, inside sales, field sales, and channel model — each one catering to a different product and business model.
Let's break them down:
Example: BCG slide illustrating the complex sales and marketing GTM model for a large B2B company using a combination of field sales, inside sales, and self-service tailored.
Marketing channels are the platforms you use to generate demand for your product and guide potential customers through the funnel, from awareness to decision. Your channel selection should be based on your target audience and their stage in the buyer's journey.
Different channels are effective for various stages of the customer journey. For instance, SEO content and PR can increase brand visibility among top-of-funnel customers, while case studies and webinars engage middle-funnel prospects. At the bottom of the funnel, offering free trials can help convert potential customers.
It's crucial to align your marketing channels with where your ideal customers consume content. For example, younger consumers might prefer YouTube and TikTok over Facebook or LinkedIn. This alignment ensures your message reaches the right audience through their preferred platforms.
When selecting channels, consider whether your audience is more responsive to outbound tactics like direct mail or inbound strategies such as social media, SEO, or AdWords. This decision depends on your primary goal: generating broad brand awareness or engaging potential customers who are already interested in your offerings.
A pricing strategy is a systematic approach to setting the price of your product or service, considering factors like costs, competition, customer value perception, and your business objectives (growth vs. profitability).
There is no one-size-fits-all solution for pricing strategies. To choose the best strategy for your product and GTM strategy, consider these factors:
Your chosen strategy should align with your overall business goals and the market conditions. It's often beneficial to combine elements from different strategies to create an approach that best suits your specific situation.
Crafting a robust go-to-market strategy is essential before introducing your new product to the market. We hope the steps outlined in this guide provide a foundation for launching a product or service that addresses your target customers' needs and achieves profitability.
Explore the best practices for creating effective executive summaries of your go-to-market strategy in our post on the subject. Or dive deeper into how McKinsey consultants build impactful presentations in our blog post here