Why Create a Go-to-Market Plan?
A go-to-market (GTM) plan is needed whenever a business performs any of the following activities:
- Selects its initial product
- Creates a new product or service for its current market
- Creates a new product or service for a new market
- Plans to offer an existing product or service to a new market
- Decides to invest significant resources to redesign or upgrade an existing product or service
- Decides to acquire a business
The idea is that thinking, writing, discussing, and reviewing the plan will highlight defects, omissions, and unsubstantiated assumptions that may sink the plan or at least lead to severe investor disappointment.
What’s Included in a Go-to-Market Plan?
Most C-suites are working diligently to minimize business risk. Their risk avoidance antennas are fully extended when they hear about a new product or service. They want to see how their operating teams are thinking about mitigating risk and will not approve a new project if it appears risky.
As a result, businesses require a GTM plan before a new product or service is approved. If you don’t have a template, many are available online. However, not all templates are the same.
These are the critical sections of a GTM plan that will minimize the likelihood of product-related failure, including:
- A brief description of the product or service.
- An outline of why your team believes there is a market for the proposed product or service. This should include market research data supporting your GTM decision and future financial assumptions.
- An explanation of your value proposition. What outcomes will be created that are unavailable from other sources or only at a higher price? For each outcome, explain and justify how much you think it will be worth (in dollars) to each customer segment you identify.
- An outline of the business models you considered for this project, the model you selected, and why your choice is best. For example, if your product is hardware, you should discuss outright selling, leasing, or offering the product on an Equipment as a Service (EaaS) plan.
- A comparison of your plan to the business’s current structure to justify creating a new distribution channel. For example, if your company sells and services products using dealers and you want to go direct, you have a lot of explaining to do (as Ricky Ricardo always said on I Love Lucy). For peripheral overhead costs, it is a good idea to show how it will benefit sales of existing and new products and justify why your project should not be burdened with the total incremental cost.
- Pricing is always an area that can get new products and services in trouble. Review the way your business currently creates list prices. Is it a standard percent of cost, various markups depending on the part or product category, or do you currently use value pricing? If you propose value pricing, make sure your analysis includes a defensible price for each unique outcome you previously identified. You may find it helpful to create several product descriptions that bundle a few related benefits into one unique name and part number. For example, most new car models have several trim levels with different accessories at different prices.
- Many industrial businesses are in the middle of a change to pay-per-use pricing. If this pricing model is new to your company, spend extra time confirming whether potential customers want to use this system or to pay the old way of paying up-front or leasing the equipment.
- New products and services require new training programs for all customer-facing people. Train salespeople on all the new outcomes the customers will enjoy, how to sell them, and ways to avoid discounting to close an order. Other groups that will require training and new reference material are:
- Technical support
- Installers
- Field Engineers
- Stock people
- Cost accounting
- And a short but informative training for everyone else in your company. Everyone needs to discuss a new product and service intelligently without going into too much detail.
- A plan for website modifications. These are not specific words but a high-level discussion that will let the digital marketing team quantify the cost of the changes they will have to design, create, and test. Website changes frequently require C-suite approval, so add time to your schedule.
- Finally, there should be a three to five-year forecast of sales, margin, and profit. Also, highlight longer-term recurring revenue and remanufacturing opportunities. Discuss impacts on hiring, including new or hard-to-find skills, and the environmental impact.
Management Essentials
Be smart if you are responsible for introducing a new product or service. Invest the time and effort to consider what can go wrong and what you will do to minimize delays or require unbudgeted resources. When planning a merger or acquisition, this is your due diligence.
Suppose your project is unique to your business, or the cost of failure can be so significant that it could severely undermine the company. In that case, you should consider hiring an unbiased outsider as your devil’s advocate.
In the online course Management Essentials, Harvard Business School Professor David Garvin details three group decision-making techniques — consensus, devil’s advocacy, and dialectical inquiry — and how they contribute to arriving at a high-quality, able-to-executed, and timely decision. I will discuss the first two since dialectical inquiry is unlikely to be used in SMB companies.
According to Natalie Chladek, associate product manager at Harvard Business School Online, consensus decision-making is the most common technique. Chladek cites the pros as: “Consensus represents agreement from all parties involved in the decision and can foster team-building,” and the cons as: “The desire to reach an agreement can allow for groupthink and hinder meaningful debate.”
The other decision-making technique, the devil’s advocacy, is useful when a group is open to feedback and willing to change their perspectives based on input or feedback. Chladek cites the pros as “Challenging the group’s ideas can allow you to spot weaknesses in potential solutions” and the cons as “Group members must be open to receiving feedback and adapting throughout the discussion to avoid undue tension.”
With the devil’s advocate approach to reviewing a GTM plan, a knowledgeable person performs an in-depth review of your plan, then meets with the team and expresses contentious opinions to provoke debate or test the strength of opposing arguments. Based on the review and follow-up discussion, the group will change the plan if necessary.
The company can implement the plan with high confidence after the C-Suite approves it.
Before Launch
Before launching a new product or service, creating, debating, improving, and issuing a go-to-market plan is essential. The plan should answer all potential questions, justify assumptions, and forecast a successful launch. Create the plan as if your job depends on it!
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About Middlesex Consulting
Sam Klaidman is the founder and principal adviser at Middlesex Consulting. He helps his B2B product manufacturing clients grow their service revenue and profitability by applying the methodologies and techniques associated with Customer Value Creation, Customer Experience, and Market Research to assist them in designing and commercializing new services and the associated business transformations. Contact Sam here.
Image credit: Sam Klaidman