Go-To-Market Strategy: A 9-Step Guide to a Successful Launch
How to Build an Effective Go-to-Market Strategy in 9 Steps
New products and product innovation are the best ways to promote revenue and growth. More than 25% of total profits coming from the launch of new products. However, some 95 percent of new products fail!
Why? It’s simple--companies get so engrossed in designing and manufacturing new products that they leave little time (or budget) for marketing them.In other words, they lack an effective Go-to-Market strategy—they make products for which there are no buyers.
Products developed in isolation from their potential buyers often crash and burn when they come in contact with real world. A Go-to-Market strategy prevents this collapse by shifting the focus from the product to the customers.
Your GTM plan is part of your marketing strategy. It specifies how you will create and deliver value to your target customers. It answers questions like
- Who are your customers?
- What benefits do they seek?
- What features will make your product more attractive to them?
- Which channels are best for reaching them?
- How to price, place and promote your product?
The Go-to-Market strategy intersects with many other processes, including product development, positioning, segmentation and targeting, channel marketing, 4Ps, budgeting, and value creation/delivery.
If you are planning to launch a new product and want to maximize the chances of success, here are 9 steps to put you on the right track.
Step 1: Deep Dive into Your Customers’ Minds
The fundamental reason for product failure is that marketers fail to fully comprehend their customers and their needs.
The conventional way is to segment your market based on the demographic, psychographic, geographic, and behavioral attributes of your customers.
The conventional segmentation and targeting approach goes something like this:You find the common attributes of people who would be buying your products or services. For example, if you’re running a downtown coffee shop, your core target market might consist of young professionals in their 20s or 30s.
However, there’s a flaw with this approach.
People don’t buy products because they’re 20 to 35 years old or because they work in an office downtown. Rather, they have specific “jobs” that need doing and they “hire”a product or service to dothe job for them.
So, as the coffee shop owner, you’d know that your customers might be looking to take a break from the office routine. Or they might be looking for a place where they can meet with clients. These are the jobs they need to get done.
Can your coffee shop do those jobs for them?
Your approach to product development should focus on providing solutions allowing your customers to complete their “jobs”.
In an anecdote told by Harvard Business School professor Clayton Christensen, there once was a milkshake shop that wanted to increase its sales by introducing the perfect milkshake.
Using questionnaires, they asked their customers to describe the perfect shake. Based on this feedback, they introduced new shakes that most of their customers should have liked—from the survey data.
But these new shakes didn’t have much impact on the sales—they didn’t get the “job” done.
Perplexed, the owners hired an agency to assist them with product development. After observing customer behavior at the store for a few days, the agency concluded that most of the customers bought their shakes in the morning--after missing breakfasts.
They had a long commute ahead of them. They bought milkshakes because they wanted something healthy that would keep them filled until coffee break...and because sipping milkshake with the straw made the commute less boring. That’s the “job” that needed to be done.
Based on these findings, the owners introduced thicker shakes with chunks of fruit in them. Not only were they more filling, but also took more time to sip and lasted longer while driving. Not surprisingly, the sales went up dramatically.
In this case, the agency discovered the “job” customers wanted done, and then optimized the product to do that job in the best possible way. When you can do a job better, you have more chances of getting hired to do it.
While you must apply the usual segmentation attributes, go beyond them and discover the real problems that your customers need your product to solve. You must go deeper into customer behavior in order to create a deep product that satisfies customer needs at all levels.
Step 2: Understand the Five Levels of the Product
The great marketing guru Philip Kotler believes a product is a more than a tangible thing. When seen from the customer’s angle, a product is a combination of tangible and abstract value. There are five levels on which customers attribute value to any product.
To be successful, you must understand these levels and develop a deep product that delivers value on all the levels.
Core Product: This is the basic level of the product, which fulfills a primary need. For example, if you’re making sandwiches, the sandwich is your core product.
Generic Product: These are the features or attributes of the product. A sandwich can have different ingredients, sizes, shapes, and types.
Expected Product: These are the benefits customers expect when they use the product. A sandwich is expected to be filling, tasty, and healthy.
Augmented Product: This is about the added benefits which make the product unique. The Augmented Product includes the branding, services, environment, and other benefits that exceed the Expected Product.
Potential Product: This is what the product may become in the future. A sandwich can be served with coke and fries and called a combo. Or there can be new flavors, sizes, and a healthier variant.
Keep these levels in mind when you’re going through the product development process, coming up next.
Think about how your customers see your product. Design your product in a way that it satisfies customer needs on all the five levels. Remember that no amount of marketing budget can make a product successful unless it delivers distinct and unique value on all the levels.
Step 3: Develop the Product People Want and Understand
- Idea screening: You filter the weaker ideas using specific “go/no go” criteria such as development or distribution costs, competitive or technology limitations, etc. Drop the projects that don’t pass muster under these criteria.
- Concept testing: In this step, your marketing is supposed to kick in. You test your marketing messages and see if the customers understand, need and want the product.
- Metrics and KPIs: Build a system of analytics. Determine the metrics to measure progress during the pre- and post-launch phases, such as development timelines or sale estimates.
- Test Marketing: Technical projects sometimes involve developing a Minimum Viable Product (MVP) or Beta version and testing it in a part of the target market. Physical products and services can be tested in a controlled environment such as focus group interviews before you go full bore into development.
- Product Development: At this point, the flaws in the product are (we hope) fixed; it’s ready for production. It’s time to prepare manufacturing schedules, distribution processes and financial plans.
- Commercialization: Your product is on the market. Sale revenues are pouring in. Just keep your supply lines filled and provide excellent customer support. Some advertising at this stage will go a long way.
- Performance Review: Use your analytics to save on production cost, refine pricing, and continuously improve the product.
Do you see anything wrong with this picture?
Looking at this 8-step sequence, it’s easy to see why most companies become overly involved with the process. They get separated from market realities.
Developing a product without assessing your market’s needs is like putting the cart before the horse. However, if you don’t have a complete product, you can’t really find out if your customers would love it. It’s almost a chicken-and-egg situation.
So what do you do?
The answer may lie in Eric Ries’ Lean Startup methodology. It’s a scientific approach to new product development that eliminates uncertainty through customer research and iterative product development, thus minimizing the risk of failure.
If you cut through the jargon, following this method means starting with your customers. Its practitioners make every effort to determine customers’ needs first. Observation, interviews, questionnaires, surveys, segmentation data, marketing data and deep analytical thinking are your main tools in this game.
Here are the three steps of the lean startup approach:
- Understand the problem that needs solving—the ‘Job to be Done’. Define how your product is going to do the job for your customers better than competitors.
- Create an MVP—Minimum Viable Product. This is a startup version of your product that you create with your own resources – you will use this version for market testing. This step will help you understand what features or attribute you need to build into your product.
- Experiment, Improve, Repeat. Test the MVP. Add new features. Test again. Tweak again. Repeat until you have the perfect product.
It would be a mistake to consider the product development process as simplistic or linear. It’s a complex and chaotic process in which the product is always evolving based on the market feedback and environment.
Step 4: Define Your Positioning
According to Philip Kotler, brand positioning is an act of designing the company’s offering and image to occupy a distinct place in the minds of the target customers.
Source: The Health Compass
Simply put, positioning is how your customers perceive your product compared to other, similar products.
- Colgate protects while Close Up freshens breath
- KFC is finger licking good while Subway is healthy and natural
- Axe deodorants have sex appeal while Nivea Men fights stress sweating
Marketers build these perceptions in the minds of their customers by creating a product that provides the perceived benefits and then communicating those benefits through consistent messaging.
To be effective, brand positioning must be:
- Clear—Make the brand’s benefits clear to your audience. Confuse them and you lose them.
- Unique—Me Too! products never win. Differentiate your product from others.
- Meaningful—Customers will highly value the main benefit. The tallest hotel or the laptop/cell phone combination (by Asus) are the examples of meaningless positioning.
- Deliverable—Your product must deliver the benefit that you promise. Otherwise, you lose brand position--fast.
So, how do you achieve powerful positioning for your brand?
Positioning extends beyond your product slogan. In fact, the slogan will be the last thing to decide in your positioning process.
Here are a few tips to help you reach powerful brand positioning.
- Know what your customers want. Assess their physical, emotional and occasional needs.
- Analyze the competition. How other products attempt to solve the customers’ the problem.
- Make a list of the benefits that your product has to offer your customers—the problems it solves.
- What is the key benefit of your product? For example, taste is the main benefit to customers for a restaurant.
- Which benefit can make you different or better than others? For example, Mexican food is different from Italian. Vegetarian restaurants are different from steak houses.
- How can you further differentiate your offering? Think about pricing, service, location, portion size (value), and quality.
- Make a positioning map. Use a grid like the following to plot your intended positioning versus competitors. Do it for all the differentiating attributes like taste, location, service, quality, value, and price.
- Write your positioning statement. For example “the most delicious Mexican food served fast and fresh”.
- Test the positioning statement. Gather customer insights and opinions about the positioning statement using focus group interviews and concept testing.
- Optimize messaging and product. Once you have reached the desired positioning and confirmed it through testing, you can optimize messaging as well as the product based on the positioning statement. Convert it into a brand tagline and use it in your marketing communications.
- Decide your marketing mix—Product, Price, Promotion, and Placement—based on the positioning that you have finalized.
- Consider repositioning. Sometimes you can target two or more different segments by modifying your positioning. For example, Johnson & Johnson extended their brand by repositioning their shampoos and lotions for mothers.
Positioning is how your customers perceive your product. You can come up with a clear, unique, meaningful and deliverable positioning by building and highlighting different attributes into your product. It is necessary to test and validate your positioning statement before you use it as the basis of your communication and product enhancement.
Step 5: Select Your Marketing Channels
Technically speaking, a marketing channel consists of the people, activities and structures that are used to deliver messages, products and services to the end consumer.
But in digital marketing, a channel can also be used to deliver just the messaging and bring the customer to the point of sale through a sales funnel.
Customers today use hundreds of channels. They consume more than 12 hours of media per day and shift seamlessly from one channel to another.
A person may start the day by scanning their Facebook newsfeed, clicking on an ad and go to a website, switching to Google to find product reviews, or making a phone call to the company. Customers may even read a physical newspaper.
That’s why a successful brand must be present on multiple channels. Here’s how you can select the most suitable channels for marketing your new product.
- Identify your customers. See which channels they use and how their choice of channel changes as they progress through the buying journey. For example, prospect may see your ad on Facebook and go to your website to learn more about your product.
- Learn from competitors. Which channels are your competitors using? If they’re targeting the same market, probably they have already done the homework so you might not need to reinvent the wheel. Here’s a list of 50 channels small businesses most often use.
- Select the channels that your customers use the most. Select as many of them as you can handle and use them simultaneously. The more channels you use, the more customer leads and sales you will draw.
- Understand your sales funnel. How do you attract first time customers (for example, through Google search)? Where do they go next (your website, so you should have a landing page there to receive them)? How do the buy (if online, optimize your sale pages for conversions)?
- Do not ignore offline channels. You should not get carried away by all the hype about digital media. Offline channels like events, snail mail, phone, and point-of-sale are equally important. Integrate them with your digital channels; for example, you can host an event and broadcast it live on YouTube.
- Go for cross channel marketing to get the best results in terms of sales revenues. Going cross channel requires you to send consistent, personalized messages, delivering the same customer experience on all channels.
- Monitor your channels. See which ones perform better than others and allocate more resources to the most productive channels; remember that different channels may be more productive for some products than others.
Use your customer and competitor research data to select multiple channels for distributing your products and messaging. Use them to send marketing messages and offers about your new product. For the best results, you should integrate multiple channels and offer a cohesive, consistent, and seamless brand experience across all of them.
Step 6: Prepare Your Launch Budget
Next to poor customer analysis, inadequate budgeting is the second most common reason for new product failure.
Budgeting may be easy if it’s a brand extension you’re doing—you’ll have the historical data to use as the starting point. But if it’s your first product, you might have to rely on calculated guesses and zero based budgeting.
Remember: even the brightest product can fail if you don’t provide enough funding for its marketing. Therefore, you need to gauge your budgetary requirements carefully and arrange for the funds in time.
- Estimate Your Development Budget: Once you have written and tested your positioning statement, the next step is to test market the product within a small budget. This will give you some idea about the development costs, including R&D, salaries, overheads, training, and any new hardware or software required for development.
- Prepare Your Production Budget: This budget includes all expenses related to manufacturing or providing the new product or service. These expenses include raw materials, equipment, office or floor space, worker salaries, warehousing, transportation, packaging, and any other expense incurred for turning your idea into a marketable product.
- Estimate the Marketing Costs: These are the costs associated with the marketing channels you have chosen in Step 4. Depending upon your multi-channel strategy, the marketing budget may include anything from the cost of setting up new retail or service outlets to the expense of social media management.
- Prepare Your Cash Flow Projection: For accurate budgeting, it’s critical to estimate your future cash flows from new product sales. If the sales are less than you expected, you should have the budget to adjust your strategy and keep going until targets are met. And if your sales go through the roof, you’ll need funds for increased production and sales expansion.
- Be Ready for Contingencies: Things will rarely go as you plan. So you should have a contingency budget to cover the bumps and glitches. The norm is to keep 5 to 10 percent of your total budget for the unforeseen, but the exact percentage depends on your business plan.
- Resources for New Product Budgeting: We’re hoping your finance people will take care of the number crunching, but if you don’t have them, you can simply use an excel sheet or even a notebook to prepare your product budget. Here are 12 downloadable marketing budget templates you can use. Or try the Product Development Budget template from Demand Metric.
Take the time to prepare the new product budget and make it as accurate as possible. Have extra resources at hand just in case the new product launch doesn’t go as planned.
Step 7: Define Work Streams and Assign Ownership
As you may have noticed, your Go-to-Marketing strategy involves efforts and inputs from multiple departments. The idea generation and screening work may take place in R&D, the budgeting is the domain of Finance, product development may be carried out by Manufacturing, and customer research by Marketing.
A successful product launch is managed like a project—it IS a project. Select team members from different work areas, organize them into goal-driven teams, define work streams, and assign responsibility for different tasks. Appoint team leaders or work stream owners who will be responsible for achieving the work stream goals.
- Break down the new product development and launch strategy into specific work streams. For example, idea generation and screening, brand positioning and testing, product development, and so on. Each segment has a specific goal or end point.
- For each stream, identify the activities that will be involved. For instance, customer research is required for idea generation or brand positioning. Big data or historical records might help with channel selection.
- For each activity, decide the team member with the skill set that will be required to perform different activities or tasks.
- Decide a team leader and assign responsibility for different tasks. Make the team goals and the role of each member clear to all. Set milestones in each work stream and monitor progress.
These work streams allows you to harness resources from across departmental boundaries. It does not let your new product launch get affected by organizational silos. It enables you to look beyond the day to day priorities and focus on the long term goals of product development, launch and post-launch phases.
Thinking in terms of project management and work streams enables you to embrace innovation and new product launch as top priorities. It gels together the bits and pieces of your Go-to-Market strategy and makes the products launch smooth, seamless, and successful.
Step 8: Launch Planning Tips and Tricks
In fact, this should be the first step. I have placed it toward the end because I wanted you to get familiar with the whole process, so you may include all of the activities in your product launch plan.
So, now that you know the nuts and bolts of your Go-to-Marketing strategy, you should arrange everything into a neat and tidy plan, with all activities plotted on a timeline.
Here’s a product launch plan template from Product Plan. You can customize it to suit your needs. Go ahead, try it. It’s free.
Demand Metric also offers a Product Launch Plan Template that you can download and customize. These are simple and inexpensive tools that any small business will find helpful.
Assemble your Go-to-Market strategy into a document containing all activities, plans, and goals—everything. This will be your guidebook for the new product launch. Include all relevant information including research data, competitive analysis, pricing recommendations, media selection, and other data pertaining to the new product development.
Prepare a separate marketing plan for the launch and post-launch phases. You have already selected the channels. Now you need to pick the channels that will be the most cost-effective during the critical launch phase.
You should plan a launch event and build your launch plan around it. The event will be your main channel. Select a few other channels such as email, blog, live video, and social media as supporting channels.
You might be inspired by some of these 20 inexpensive ways to promote your product launch.
If you are a tech startup, consider submitting your company and product to top startup directories.
You can also consider using crowd-funding platforms such as KickStarter in your Go-to-Market strategy.
Over-communicate with your team during the launch phase to minimize the chances of last minute errors. Keep an eye on your timelines and performance milestones.
Do not lose momentum after launch. Keep targeting your audience on your selected channels. Only after your message has passed through several touch points and interactions that your customers will finally start buying your new product.
New product launches are critical. A last-minute glitch can ruin your Go-to-Market plan. So, if something can go wrong, expect that it will go wrong—plan accordingly. Make sure you select the most promising channels and monitor the launch closely.
Step 9: Using Go-to-Market Technology
Technology plays a crucial role in new product development and launch. Whether it’s a technology product or a consumer product that you’re developing, you should select the right technology stack to develop and execute your Go-to-Market strategy.
But, what is the right Go-to-Market technology stack?
There’s no standard set of tools for planning and managing product launches. You’ll need to mix and match different software depending upon your requirements. Here are a few tips to help you select your tools.
- For small business startups, you can use hosted project management solutions such as BaseCamp, Trello, InvisionApp, Asana, or even shared Google Docs and Worksheets for planning and coordinating different activities.
- Larger businesses with their own IT departments can go for more specialized product management tools such as WorkFront, DevTechnoSys, Gartner, Oracle, or IBM’s Watson Marketing.
- Here’s HubSpot’s list of 17 tools and resources for conducting market research. Other than these, you have your regular CRM, Analytics, and BI tools to help you devise a winning Go-to-Market strategy.
Preparing and executing a Go-to-Market strategy is a tedious and complicated process, which can be best managed only with the help of project management and research tools. Use the appropriate technology stack to make the product launch smooth and your life easy.
So, there are the 9 steps to building a Go-to-Market strategy.
One final word--these steps are not meant to be taken in a rigidly chronological sequence. Developing and launching a new product is a complicated and non-linear process. Taking the time to complete these 9 steps can avert serious losses and complications down the road.
Regardless of your exact sequence, you should bear your customers in mind first. They are the people who will hire you to do the jobs they need doing. Your Go-to-Market strategy will make sure you keep them in mind from idea to launch—and beyond.
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