Show me the numbers!
This year, 472 million entrepreneurs worldwide attempted to start 305 million companies, and approximately 100 million new businesses (or one third) will open each year around the world.
That means 274,000 businesses open every day. At the same time, 239,000 business close every day.
Can you see how that number of businesses competing for that scarce resource called “capital” might be a problem?
Let’s drill down even further and focus on one piece of this overall pie. The Fintech Sector.
It’s estimated that 100,000 technology startups reach the basic funding stage every year. Angel investors (including friends and family members) help about half of these companies with their initial development. Fewer than 10% (about 4,000) are then able to show enough promise to actually receive a first round of capital from venture or private equity sources.
If you are an entrepreneurial manager who has reached this milestone, it’s a major achievement — your technology has progressed from an interesting concept to a promising commercial opportunity. You’ve probably demonstrated your product’s potential with a subset of customers and now experienced investors are willing to place a bet on you.
The challenge becomes how to sell your product and create a sustainable revenue stream so that you can further develop your product offerings, build your infrastructure, repay your investors, and pay yourself. Unfortunately, many tech startups get stuck at this stage because they can’t quite figure out a scalable way to go to market. Often, this is because they’ve been founded by technologists, and sales is not an area of expertise. Or perhaps it’s because the only person who is passionate enough to sell the product is the person who developed it. Or people may believe their invention is good enough to sell itself. The consequence is that sales don’t become a focus of attention until the cash starts to burn.
Figuring out a go-to-market approach is no trivial exercise — it separates the companies that will be successful and sustainable from those that won’t. In our work with startups over the last several years, we’ve heard dozens of questions related to how to start thinking about sales: Should we put together a direct sales force or sell indirectly through others? If we sell directly, should we organize salespeople by market, industry, geography, company size, or some other principle? Will our salespeople require technical support and work in teams? Should we bundle maintenance and other services into our sales approach, or sell them separately? Can we get our product to market through other channels, such as social media or advertising? What about pricing? The list goes on.
The problem is that these are fundamentally the wrong questions to begin with. They all focus on the perspective of the startup and the technology, but startups need to take their customers’ perspective to understand how to approach the market. They should think about what the customers are trying to achieve and what problems they need to solve — and then think about how the product can help them be successful.
For example, earlier this year a five-year-old software company asked us to help its sales team do a better job of selling to large enterprise organizations. The company was already breaking even operationally after two rounds of funding. But despite some successes in pilot projects, the salespeople had not been able to expand their deals from “interesting trials” into ongoing revenue streams.
After talking with the VP of sales, the CEO, and several of the account managers, we realized we had heard a lot about the software’s virtues but much less about the customer problems and pain points that the software was meant to address. Eventually, we asked this team to focus on three large enterprises and to describe the business challenges these potential customers were facing. Once they developed this context, the salespeople were able to identify a number of very large opportunities where their software could help.
For instance, they learned that one strategic objective of the customer was growing its data centre hardware business. They then saw that their software, which could help data centres reduce operational costs, could be incorporated into the customer’s equipment just like word processing software is embedded into personal computers. This led them to see that one way to bring their product to market was to partner with this customer (and others like it) instead of selling directly to data centres. In this way, their “customer” could actually be an important part of the go-to-market strategy.
Veteran salespeople might recognize this “consultative selling” approach and dismiss it as old hat. The point, however, is that the consultative selling mindset needs to start before the go-to-market approach is developed, and it must evolve as the sales strategy evolves. Figuring out how you go to market is not a one-time exercise for a new company; it should be an ongoing process, constantly informed by a deeper and deeper understanding of customer needs and how your product can meet them.
If you are part of a startup or a relatively new company that needs to accelerate revenue growth, consider how this approach might apply to you. Start by identifying a small number of very specific customers — either company (if you are a B2B player) or desired consumer segments (e.g., urban professionals with specific characteristics). Then put yourself in the shoes of these customers by thinking about their issues and by talking to them not about your product but about their challenges and pain points. (Startup expert Steve Blank, for example, suggests that you talk to dozens of potential users as part of a “customer development” process.)
Once you’ve taken these steps, you can begin to experiment with a go-to-market approach with the expectation that you’ll continue to refine and change it based on experience and further insights.
Figuring out an approach for going to market is one of the toughest things for a startup to do. But without understanding the customer’s issues, it’s almost impossible to get right.
What are the major components of a go-to-market strategy?
Some answer “what is your go-to-market?” by talking only about their marketing but go-to-market is a strategy that extends across the organisation.
To get a feel for the major parts of a GTM strategy, I’ve summarised the GTM plan of a serial entrepreneur, Stefan Groschupf, taken from this great blog post.
I’ve slightly shifted around the order as point 1 should, in theory, be after point 2 but it makes first-timer logical sense this way.
Craft a value matrix and messaging around the pain point
This is a good way to understand what the pain point is and how to set up messaging to address the pain point.
Identify the buying personas involved in the journey
At DMO we realised, by analysing sign-ups, that the person who first signs up or enquires about the product is often a manager and not an end-user as we imagined. Yeah, this was a surprise.
Also, we found that the gatekeeper we needed to clear is often someone in charge of data security, so we created additional detailed docs explaining how we secure data.
There are a number of people involved in the stages of making a purchase including:
- The initiator who first comes across your product.
- The user.
- The influencer.
- The decision-maker.
- The buyer who approves the budget.
- Final approver.
- Gatekeeper – such as the IT dept in charge of data security of vendors
Understanding these people and what each one needs during the process helps create the right content and processes you’ll need to make the sale.
Understand your buyer’s journey
In short, figure out your top of the funnel, middle of the funnel and bottom of the funnel so you know what docs are needed at each stage.
DMO’s top of the funnel is the blog and integration listings which leads to the home page containing videos and testimonials to get attention.
DMO’s middle of the funnel is live chat and demos to answer key questions.
DMO bottom of the funnel is the trial, educational emails, one to one product walk-throughs and pricing quotes to get to a sale.
Choose a marketing strategy
This is where you figure out your inbound and outbound strategies.
For DMO, it’s primarily about content.
We started with email and then realised we did not have the messaging and target market nailed so went to content until we knew more.
You might use only one or a mix of self-service where they enter credit card and buy, inside sales, heavy-duty field sales or a channel model.
At DMO we started as a self-service product and then added inside sales because larger companies need to build layers of trust in you and the product, especially if they are in the finance sector.
If you need some inspiration or don’t have a template to start gathering the information together to create a Go-To-Market plan, download this free word file.
If you want a second opinion about the need to use a Go-To-Market Plan I’ll give you 15 minutes of my time for free to conduct a quick Q&A session.
Make a booking in my online calendar here.
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If you’re looking to enhance your customer-centric capability, we have some exclusive offers for products that the likes of Amazon, and Zappos. I wrote a blog on this subject which you can read here.
You are going to need to create more and better content that your customers want. The more value you offer them, the more they’ll feel like they have found a home. On the content marketing side, I use and recommend Semrush.
Once you have created some content, the easiest way to use that content is to have an App that curates and posts that material at different times, i.e. set it up once then let it run. I use and recommend Missinglettr.
Email Marketing will grow your business faster than any other marketing medium! I use and recommend GetResponse.
Wishing you all a Merry Christmas and a Happy, Healthy and Prosperous 2020!
James (Jim) Spurway
“When you change the way you look at things, the things you look at change”