A go-to-market (GTM) strategy is your plan for taking a product to market: who you’ll sell to, what you’ll say, what you’ll charge, where you’ll reach buyers and how you’ll know it’s working. You need one before you launch a product, enter a new market or add a new product line.
A good GTM strategy keeps everyone working from one plan. It tests whether the market wants what you’re selling before you spend big. And it puts a small budget where it counts.
The steps:
- Study your market: find your target market and group your customers
- Test product-market fit
- Set your price
- Choose your sales channels
- Run your launch plan
- Measure the results
The numbers to track:
- Customer acquisition cost (CAC)
- Customer lifetime value (LTV)
- Monthly recurring revenue (MRR)
- Churn rate
- Net Promoter Score (NPS)
To put yours on one page, the free Go-to-Market Strategy Planner takes you through the six parts of a launch and turns your answers into a pre-launch, launch and post-launch checklist.
How Do You Study Your Market?
A strong GTM strategy starts with knowing your market.
Find Your Target Market
Your target market is the backbone of the plan. To find your best customers:
- Look at your current customers. Start with who’s already buying. What do your best customers have in common? Use surveys and sales data to find out.
- Read up on your industry. What’s changing, and where are the openings? This points you to the most promising groups.
- Write buyer personas. Short profiles of your ideal customers: who they are, what they care about and what keeps them up at night.
- Find the shared problem. Which problem do your customers have in common? Focus on the core problem your product solves.
- Study the competition. Where are the gaps? That’s where you can stand out.
Don’t try to please everyone. Focus on a specific market. 7 Steps for Target Audience Analysis goes deeper.
Group Your Customers
Once you know who you’re after, split them into groups, so you can tailor your approach:
- By behavior. What do they buy, and when? This helps you predict what they’ll do next.
- By company type. For B2B, group them by industry, size or revenue.
- By mindset. Group them by values and lifestyle, so your message lands.
- By buying stage. Are they just looking or ready to buy? Tailor the message to each stage.
- By location. Where people live can change how they buy.
Know your market, group your customers, then build the rest of the strategy around them.
What Are the Main Parts of a GTM Strategy?
Three parts make or break a launch: product-market fit, pricing and channels.
Product-Market Fit
Product-market fit (PMF) means your product meets a real need for a clear group of customers. To get there:
- Know your audience inside out
- Build a basic version of your product (a minimum viable product, or MVP)
- Get feedback from early users
- Change the product based on what you learn
One way to measure it comes from growth marketer Sean Ellis. Ask users how they’d feel if they could no longer use your product, and count the share who say “very disappointed.” After benchmarking nearly a hundred startups with this survey, Ellis found that companies with strong traction almost always passed 40%, as Superhuman founder Rahul Vohra explains in First Round Review.
Superhuman, the email app, ran that survey while it was still pre-launch. In the summer of 2017, only 22% of its users said they’d be very disappointed. The team narrowed its focus to the kinds of users who loved the product, which put the score at 33% for that group. Then it built more of what those users valued and fixed what held others back. Within three quarters, the score was 58%, Vohra writes.
How to Test Product-Market Fit Before Launch covers cheaper tests you can run first.
Pricing
Pricing isn’t just a number. It’s part of the strategy:
- Price on value, not only on your costs
- Know where you sit against competitors
- Consider different models: subscription, freemium or one-off
- Test prices to find what works
Your price should fit your brand and your target market.
Sales Channels
The ways you sell can make or break the plan. The main options:
- Direct sales: good for complex products that need explaining
- E-commerce: good for reaching many people quickly
- Partnerships: use other companies’ networks to grow
- Marketplaces: sell where your customers already shop
Pick channels that fit your product, your buyers and what your team can handle. A B2B software company might lead with direct sales, while a consumer product might do well online.
Don’t try to be everywhere. It’s better to do well in a few channels than okay in many, and to drop the ones that don’t pay. Dropbox is a well-known example. Founder Drew Houston’s 2010 “Startup Lessons Learned” slides say paid search, affiliates and display ads didn’t pay for themselves, so the team put its effort into word of mouth. A referral program that rewarded both the person inviting and the person joining permanently raised sign-ups by 60%, the slides say. Dropbox went from 100,000 registered users in September 2008 to 4 million in January 2010, mostly from word of mouth and sharing features like referrals and shared folders.
5 Steps To Choose Marketing Channels walks through picking yours.
How Do You Put a GTM Strategy Into Action?
Here’s how to turn the strategy into a launch: the steps, who does what, and how to handle common problems.
Launch Steps
- Set clear objectives. Start with specific, measurable goals, such as a number of paying customers by a set date.
- Make a timeline. Map out the launch phases. Tools like Asana or Wrike keep everyone in sync.
- Prepare your marketing. Make sure everything looks and sounds the same on every channel.
- Train your sales team. Give them what they need to explain the product, the price and how it compares.
- Soft launch first. Launch to a small group, learn from it, then fine-tune before the full launch.
For everything to check before launch day, see the Product Launch Checklist.
Team Roles
A launch takes teamwork. Here’s who does what:
- GTM lead: sets the timeline, coordinates the work and measures success.
- Product marketing: writes the product’s message and turns features into benefits.
- Sales: talks to potential customers and reports back on what’s working.
- Customer success: makes sure new customers get a smooth start.
- Product: adjusts the product based on early feedback and data.
In a small startup, one or two people hold most of these roles. Write down who owns each one anyway.
Handling Common Problems
Even good plans hit snags. Four common ones, and how to deal with them:
- Teams pulling in different directions. Hold regular cross-team check-ins, track the key numbers on one shared dashboard, and keep communication open so problems get solved quickly.
- Trouble proving return on investment (ROI). Build a simple ROI calculator or case study, talk about results with customers well before renewals, and collect customer success stories early.
- Sales that are hard to forecast. Use data from past launches, track leads and deals in a CRM, and update forecasts as real numbers come in.
- Leaning on a few star salespeople. Write a sales playbook everyone uses, have your top performers share what works, and keep training the whole team.
How Do You Measure Whether It’s Working?
Track a few numbers to see whether the strategy is working and whether the spending is paying off.
Customer Acquisition Cost (CAC)
What you spend to win each new customer:
CAC = total marketing and sales costs ÷ number of new customers
Lower is better. It means you’re winning customers more efficiently.
Customer Lifetime Value (LTV)
How much revenue you expect from a customer over the whole relationship:
LTV = average purchase value × purchases per year × years as a customer
You want your LTV well above your CAC.
Monthly Recurring Revenue (MRR)
For a subscription business:
MRR = number of paying customers × average monthly revenue per customer
Churn Rate
The share of customers you lose. If you start the year with 500 customers and lose 20, your annual churn is 20 ÷ 500 = 4%. Lower churn means customers are staying.
Net Promoter Score (NPS)
How likely your customers are to recommend you. Ask, “How likely are you to recommend us to a friend or colleague?” and score the answers from 0 to 10. Bain & Company’s Net Promoter System site calculates the score as the percentage of promoters (who answer 9 or 10) minus the percentage of detractors (who answer 0 to 6).
Return on Investment (ROI)
To see whether your GTM spending is worth it:
ROI = (revenue − investment) ÷ investment × 100%
For marketing and sales, a quick version uses the numbers above:
ROI = (LTV − CAC) ÷ CAC × 100%
It weighs what customers are worth against what they cost to win.
Pick the metrics that match your goals, set a target for each one, and check them often.
The Short Version
A good GTM strategy has seven parts:
- Market understanding. Know what your customers need and how they buy.
- A clear value proposition. Why should customers choose you over the alternatives?
- Customer profiles. Buyer personas that guide your marketing and sales.
- Pricing. Prices that match your product’s value and what the market expects.
- Sales and marketing working together. One message, and a smooth path from first contact to sale.
- Channels. The few best ways to reach your buyers.
- Metrics. A handful of numbers that show whether it’s working.
There’s no one-size-fits-all GTM strategy. Launch, measure, and keep adjusting yours based on what customers do.
FAQs
What is a go-to-market strategy?
A go-to-market (GTM) strategy is a plan for launching a product or entering a new market. It gets your product to the right people, with the right message, through the right channels, at the right time. Most cover five things: the target market, the value proposition, the channels, the price, and how sales and marketing will work together.
How is a go-to-market strategy different from a marketing plan?
A GTM strategy is about one launch: a product, a market or both. It sets who you’ll sell to, the price, the channels and the launch plan. A marketing plan is broader and ongoing: it covers how you’ll promote the whole business over the year. Write the GTM strategy first, then let the marketing plan carry it forward.
What’s an example of a go-to-market strategy that worked?
Dropbox is a well-known one. Paid search and affiliate ads didn’t pay for themselves, so it focused on word of mouth and a referral program that rewarded both sides. It grew from 100,000 registered users in September 2008 to 4 million in January 2010, according to founder Drew Houston. Superhuman is another: it used a short survey to measure product-market fit before launch, and raised its score from 22% to 58%.