Sales-Led GTM

What is a Go-To-Market strategy?

A go-to-market strategy (abbreviated as GTM strategy) is a well-thought and extensive business plan that is used in the following situations:

• Bringing a new product into an existing market
• Bringing an existing product into a new market
• Testing the market for the growth of a new product line

The main aim of implementing a GTM strategy is to mitigate the risks and optimize potential success associated with the introduction of a new product line. Some of the components of a typical GTM strategy include target audience or buyer persona, content marketing strategy, buyer journey, company roadmap, sales strategy, and supply chain & logistics strategy.

Designing a GTM strategy is important for both well-established businesses as well as brand new business ventures or startups. Some common benefits of implementing an effective go-to-market plan include the following:

• Obtaining a thorough understanding of the target market, existing market conditions, and the potential position of the new product line to gain a competitive advantage. Analyzing and fixing issues associated with product positioning and messaging before launching into the marketplace.
• Lower marketing costs by determining promotional ventures with the highest value proposition.
• Helps in the establishment of supply chain and logistics channels before the product launch

There are three main types of GTM business models:

• Sales-led go-to-market strategy: In this GTM strategy, the sales team establishes the communication line with the customers and is responsible for the customer relationship.
• Product-led go-to-market strategy: This GTM strategy makes use of the product to capture and retain new customers.
• Marketing-led go-to-market strategy: In this GTM strategy, the marketing team of a company is responsible to create marketing campaigns to differentiate its product from other competing products.

What is a Sales-led GTM strategy?

A Sales-led go-to-market strategy depends on the sales department of an organization to drive the growth of sales and revenue. The marketing team of the company will work hand-in-hand with the sales team to collect the list of potential customers, and the sales team will get in touch with these prospective clients with the aim of converting them into new customers.

In this type of GTM strategy, even though the marketing team works to build a strong presence on social media and a solid brand reputation, the sales team has a superior level of authority when it comes to an overall business strategy.

Some important metrics and KPIs to monitor the success of sales-led GTM strategy include:

• Sales qualified leads (SQL), and Marketing qualified leads (MQL)
• Quality of potential leads
• Customer Acquisition Cost (CAC) vs. Customer Lifetime Value (CLV)
• Conversion rate of potential customers into customers

Disadvantages of a Sales-led GTM strategy:

1. The Sales-led GTM strategy does not take other components of business growth, such as customer experience or customer success.
2. Both the sales team and the marketing team are responsible for the success of the sales-led GTM strategy. If one of the teams isn’t working efficiently, the entire sales process is at risk. Some of the potential problems include the following:

a. The quality of potential leads deteriorates

b. The sales funnel might start spilling

c. The conversion rate of potential leads into customers also decreases

3. It is comparatively difficult to get the sales team, marketing team, and customer support team on the same page to ensure a successful Sales-led GTM strategy.
4. Sometimes, salespeople tend to over-promise certain aspects of the product to the potential customers to close the deal without informing the product team, marketing team, or customer support team. If the customer success teams are not able to live up to the commitment, the rate of customer retention for the product might decrease.
5. Another challenge with the sales-led GTM strategy is the scaling of the business. A sales rep can only make a certain fixed number of sales per day (via phone calls, door-to-door sales, etc.). You need to hire more sales reps if you want to complete more sales.

When to pick a Sales-led GTM strategy vs. Marketing-led GTM?

1. If your company emphasizes B2B sales and has an elaborate & complex product or service, the sales cycle tends to become very long because the clients require hands-on guidance and instructions for the products. In the sales-led GTM approach, where you allocate a specific sales rep to a potential lead, the customers can raise all their queries and learn about the proper working of the product. On the other hand, if you are introducing a simple product into the marketplace, you can implement the marketing-led GTM strategy to drive sales and revenue.

2. A company can also opt for a sales-led GTM strategy if it is trying to target a very niche market. If your target customer base is small, direct contact with your potential customers (via sales rep) is not that big a task. However, if your company is targeting a broad market, it is recommended to opt for a marketing-led GTM strategy.

3. Finally, if your company is launching a new product into the market, it is recommended to go for the sales-led go-to-market strategy. This is because if your product or service is completely new, your target customer base needs to be trained or guided to learn the functioning of the product. On the other hand, if the product being launched is not new, you can simply go for a marketing-led go-to-market strategy.

Examples of SaaS Enterprises doing Sales led GTM right:

Some case studies of well-known SaaS companies that have successfully implemented sales-led GTM strategies include Microsoft and Salesforce. Both these companies have long sales cycles, and the potential customers may need to communicate multiple times with the sales team members for guidance before purchasing the product or service.

However, it is also important to note that these companies are not completely dependent on the sales-led GTM model. Rather they use a hybrid GTM model by combining a sales-led GTM strategy with product-led or marketing-led GTM strategies.