Go-to-Market Strategy Audit:
ensuring Product-Market Fit for the long-term
The purpose of a Go-to-Market Strategy Audit is to maintain a tight match between the Buyer’s need and the Vendor’s solution over the long-term. When the GTM Strategy is well-executed and the Product-Market Fit accurate, it not only generates high demand for the product – it also enables the vendor to fulfil it. Since we invest so much effort creating it, surely the key issue is: “how to maintain its’ effectiveness”?
There are two big problems with Go-to-Market strategies that all organisations face. First, the contexts that the strategy describes (the internal organisation, the external market) are constantly changing, which means the strategy quickly becomes outdated. Second, the obvious solution – to periodically update the Go-to-Market strategy – may be frustrated by practical issues such as the strategy Owner’s authority over resources; and effective collaboration between departments.
Once a Go-to-Market Strategy ceases to be a work in progress, the Product-Market Fit becomes a widening gap. When positioning, the value proposition and messaging cease to resonate in the market, the long-term impact is a loss of sales revenue for the category or product. If we cannot avoid change, but find these consequences unacceptable, then we must focus on managing the issues that do lie within our control.
Contributors to the Go-to-Market Strategy
|Business Development||Product Management||Marketing||Sales|
|Since these areas of expertise are mutually exclusive, all contributors have an important part to play in a GTM. In reality however, the pressure of day to day work often prevents contributors from updating the Go-to-Market Strategy and maintaining Product-Market Fit.|
How to update the GTM Strategy?
From the points discussed in the earlier article (link here), we can quickly assemble the characteristics of a potential solution for updating the GTM Strategy
- Periodic review with a GTM Audit – say twice yearly. (In practice, this depends on factors such as the nature of the product, the development roadmap, the rate of change in the market, sales cycles, etc.)
- Involve contributors from all key teams (e.g. business development, product management, marketing and sales).
- Led by a single GTM Owner (with executive support from all functions involved).
- Authority for the GTM Owner to call on staff resources across teams. (In practice we’ll probably need to define and agree support limits in terms of days per quarter, or similar.)
A two-stage approach
It’s important to structure the GTM Audit so that all teams can understand and agree on how it is managed. One way to achieve this is a two-stage approach:
- Stage 1 – a Go-to-Market Strategy Audit:
A short, concise evaluation of the current status. A gap analysis highlights where changes have occurred, an action plan defines concrete steps for corrective action.
- Stage 2 – Implementation of Corrective Action:
manage the implementation and measure the impact that follows.
Since this approach requires executive sponsorship to approve the use of resources, the planning must also include stakeholder reporting and communications.
It’s worth noting that the two stages have very different characteristics, because these indicate how we can handle them effectively.
Since the first stage – the Go-to-Market Audit – will be repeated periodically, it can be structured as a process, with clearly defined steps and outcomes.
- Company-specific structure to maximise relevance
- Consistent content for ease-of-learning, effective use (and re-use)
- Clear guidelines on what to review and the criteria for evaluation
- The audit process is designed to generate a Gap Analysis and Report …
- …which creates a Next Steps plan for corrective action.
The second stage – Implementing Corrective Action – will most likely be ad-hoc. In the best-case scenario, the GTM Audit identifies that there are no significant changes and therefore no follow-up actions. In reality, the scope of Corrective Actions will vary enormously. Minor corrections are typically short-term and do not require additional resource or budget. Major corrections will be long-term efforts, that require resources beyond the immediate GTM Team, and may also require additional budget (e.g. implementation by an agency).
Examples of Changes that the Go-to-Market Strategy Audit may reveal
There are many types of change that can trigger a comparison of the current status against the original GTM:
- Roll-out of an existing product to additional markets requires new messages.
- A decision to sell via new channels means creating new content.
- Innovating a product and re-launching means reviewing target groups.
- Product adoption makes the transition from Innovator to Early Adopter segment.
- A new competitor product impacts our own product positioning.
- A competitor adds me-too functionality, which invalidates our USP.
- Changes to regulatory conditions for the market create a new Pain Point for users.
- Increases in costs of production or terms of trade reduce profitability.
- … and so on.
In each case, it makes sense to evaluate the impact of the changes on key elements of the Go-to-Market strategy. This can include things like sales method, channels, target groups, the media to reach them, positioning, value proposition and messaging. There will probably be other criteria that are company-specific. Also: you’ll probably want to contrast the need to adapt existing content against vs the need to create new materials.
Managing the Go-to-Market Audit in practice
The idea of a Go-to-Market Audit as a repeatable process indicates that the content and format should be clearly documented. Above all, it should be concise. A half-day workshop is a sensible and achievable goal for this activity. A half day, multiplied by four people equals two working days effort. Now add, say, one day to cover the time required for Stakeholders to review the results and discuss and approve the plan for Corrective Actions. Repeat the GTM Audit twice a year for a total of six days per major product or category.
What is the likely return on investment? When applied to a B2B category or single product with revenue targets measured in multiple millions of Euros, the RoI from a GTM strategy audit should be in the range from factor x10 to factor x50. Since staff days are sunk costs which are incurred in any case, we only need to consider the opportunity cost. Is there an alternative way of using these working days which would generate a higher return on investment? As an alternative yardstick, we could contrast six days effort against the costs of doing nothing. Once the Product-Market Fit evaporates we have to examine the possible financial cost of a year of zero growth. What is the financial cost of missing the revenue target for a product by 5%, 10% or more?
Who benefits from a GTM Strategy Audit?
Companies that move quickly and decisively to transform their go-to-market channels, models, and culture through technology should be able to unlock substantial value.
Top quartile B2B players generate 3.5 percent more revenue and are 15 percent more profitable than the rest of the B2B field.
“Why tech-enabled go-to-market innovation is critical for industrial companies—and what to do about it” McKinsey 2018
The Owner of the Go-to-Market Strategy
This is usually the Product Manager. While their primary focus is on the commercial results of the product, their day to day work usually focuses on the issues with the Product Roadmap. They maintain close contact with users to understand Pains and Gains. And they liaise with product development and engineering to keep the Roadmap on schedule.
In this context, the Owner of the Go-to-Market strategy can benefit from a clearly stated timeline and frequency for conducting the Audit (e.g. twice yearly). In addition, it’s enormously helpful when executive sponsors agree to dedicate resources from their respective teams to a concise but comprehensive Audit. This ensures that knowledge and skills from other functions, such as Business Development, Marketing or Sales, are used effectively.
The contributors in other functions benefit equally from this clarity. The time required for the Audit is known in advance, so the event can be scheduled well ahead to ensure it isn’t crowded out by the pressure of daily work. The Audit provides an opportunity for all functions to contribute insights about changing factors, their implications, and the steps necessary to correct them. A defined place in the calendar emphasises the status of the event as a formal channel for identifying and resolving issues and restoring Product-Market Fit.
The Director of Product Management
Product Management Directors in particular can benefit from a company-specific approach to auditing the Go-to-Market strategy. A consistent set of evaluation tools provides a shared language for Product Managers to understand and discuss issues.A consistent view across product categories offers the Director of PM a way to compare their status and identify how to allocate resources, Common metrics enable comparisons between product categories, which also simplifies reporting – within the function, among senior management peers, or upwards to the board.
Knowledge transfer and continuity planning also benefit from a company-specific approach to the Go-to-Market Strategy Audit. Within the group of contributors, the use of consistent yardsticks to measure success allows managers to identify best practices and promote knowledge transfer. Given that staff churn in Europe runs at between 12% and 16% per year, employee transition and continuity planning are an ongoing issue for senior managers in B2B as well as HR. Sooner or later, key contributors move into new roles or leave the company. As and when new staff join the GTM team, a clear structure for hand-over and onboarding ensures effective knowledge transfer and continuity with minimal effort.
Responding to the Market: the need for speed
Huge effort goes into creating an initial GTM Strategy for product launch. After that we work on it in irregular fashion. At first we take it for granted, then quietly forget it. We seldom repeat the comprehensive view that we took at launch. Staff churn and an absence of knowledge transfer complicate the situation. The GTM remains fixed in time while the world around it changes. The contents – which once described perfect Product-Market Fit are now a series of reality gaps. At the point where the positioning, value proposition and detailed messaging fail to resonate with target market segments, the GTM becomes largely irrelevant.
A structured approach to periodic Auditing of the Go-to-Market strategy ensures that it continues to be a living work-in-progress. When we structure a periodic review into defined steps with clear outcomes, we can treat it as a process. We can measure inputs vs outputs. We can gain insights to improve efficiency and effectiveness. It becomes a skill that contributors can learn and teach to others, to improve knowledge transfer across the organisation.
Best of all, periodic Auditing of the Go-to-Market strategy means that companies can identify and respond to change faster. Quicker adaptation to evolving market needs clears the path to operational excellence and enhanced stakeholder value.
For support and advice on G2M Strategies, contact Andrew Sanderson at Ansaco or via LinkedIn.