Developing your go to market strategy by Kris Konrath, Convergent
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Transcript of Developing your go to market strategy by Kris Konrath, Convergent
No Market Need 42%
Ran Out of Cash 29%
Not the Right Team 23%
Get Outcompeted 19%
Pricing/Cost Issues 18%
Poor Product 17%
Need/Lack Business Model 17%
Poor Marketing 14%
Ignore Customers 14%
Product Timing 13%
Lose Focus 13%
Team or Investors 13%
Pivot Gone Bad 10%
Lack of Passion 9%
Bad Location 9%
No Financing/Investor Support 8%
Legal Challenges 8%
Don’t Use Network/Advisors 8%
Burn Out 8%
Failure to Pivot 7%
5. KNOW YOUR COST OF ACQUIRING CUSTOMERS
4. ESTABLISH PRICING STRATEGY
3. DEFINE YOUR BRAND MESSAGE
2. KNOW WHERE THEY ARE
1. DEFINE YOUR AUDIENCEKey Steps in Developing Your Go To Market Strategy
• Biggest, most urgent pain and how well you solve it
• Gaps in the market• Segment size• Alignment with your strategy
and competencies• Competition
DEVELOP YOUR MARKET PROFILE
It’s not about who you want. It’s about who
wants you.
Tip!
WHERE TO FOCUS?
What customers
want
What your brand does
best
What your competition does best
Win Zone
Dumb ZoneRisk Zone
Losing Zone
BUYER PERSONAUnderstand his needs• Objectives• Challenges• Support Needs• Motivation
Communication• Industry• Informational • Interaction Types
IDENTIFY THE RIGHT MARKETING CHANNELSWhere they are• Associations• Web sites• Trade shows• Blogs• Influencers• Social media
Marketing Channel Average ROI
Average Effort
Average Cost
Tier 1
Conversion Rate Optimization High High MidSearch Engine Optimization High High MidEmail Marketing High Mid Mid
Tier 2
Viral Content Campaigns Mid High LowPPC Advertising Mid Low HighAffiliate Marketing Mid Mid Mid
Tier 3
Display Advertising Low Mid HighSocial Media Marketing Mid High MidOnline Public Relations Low Mid Mid
DETERMINING THE RIGHT MIX
BRAND PROMISEWhat is the most compelling (emotional/rational) benefit to your target customers that your brand can own relative to your competition?
WHYHOWWHAT
The Golden CircleSimon Sinek
REASON TO BELIEVE
What is the most
compelling evidence that
your brand delivers on its
brand promise?
PRICING CONSIDERATIONS• Positioning: premium brand vs.
value brand• Audience: Broad audience vs.
highly targeted audience• Methodology: Cost-based
model vs. a market-based model
The most common pricing error in
startup business plans is pricing too
low
Tip!
Maximization (Revenue Growth) - maximize revenue growth in the short term. This is done when there are no clear differences in customers willingness to pay, and when the optimal short term and long term prices are equal. Penetration (Market Share) - price the product at a low price to win dominant market share. Skimming (Profit Maximization) - start with a high price and systematically broaden the product offering to address more of the customer base at lower prices.
PRICING STRATEGIES
Once you choose your pricing
strategy, make sure that your
sales, marketing, product and engineering
efforts fall in line.
Tip!
WHAT IS CAC?Total
Marketing Campaign
Cost
Wages Associated
with Sales & Marketing
Cost of Sales & Marketing Tools/Softwar
e
Any Other Professional
Services Used
(consultants)
Other sales and
marketing overhead
+ + + +
Total Customers Acquired
Lifetime Value of a Customer (CLV)The Gross Margin expected to make from that customer over the lifetime of your relationship. Gross Margin should take into consideration any support, installation, and servicing costs.
CAC IN RELATION TO CLV
-1:1 = Terrible. Bleeding money
1:1 = Danger! You’re losing
money on every transaction
3:1 = Ideal. Thriving business!
4:1 = Great! Get more
aggressive
IMPACTING CACSocial MediaInbound MarketingFree TrialsTouchless conversionStrategic partnershipsPR
High Churn RatesLow Customer Satisfaction
Field SalesOutbound Marketing
Recurring RevenueScalable PricingCross Sell/Up SellProduct Line Expansion
Cost to Acquire a Customer
(CAC)
Lifetime Value (LTV)
“Understand your users. That's the key. That's the reason to launch early, to understand your users. Evolving your idea is the embodiment of understanding your users. Understanding your users well will tend to push you toward making something that makes a few people deeply happy. The most important reason for having surprisingly good customer service is that it helps you understand your users. And understanding your users will even ensure your morale, because when everything else is collapsing around you, having just ten users who love you will keep you going.”
Paul Graham, Co-Founder of Y Combinator