Companies need to evaluate their go to market plans every year. Whether it is SMEs or Family businesses wanting to reach new markets, expand reach and grow revenues, or large companies trying to align according to changes in products and markets, everyone needs to re evaluate their go to market plan at least once a year. This basically involves choosing the target markets or even exploring new markets, aligning with customers, and developing the plan on reaching out to customers.
Choosing target markets
Companies need to start off by listing all the possible markets that have potential. Most marketing strategies talk a lot about promotion, product features, benefits, pricing and stuff like digital, social and analytics. Rarely do they try and understand the domain and the core offering of their company to dig deep and explore all the other possibilities in terms of applications of their product or service. A thorough analysis of the value of the product to the various markets should be the place to start from. Prepare a criteria set by which these markets can be evaluated and selected. It could be market size, growth rate, strategic fit, competitiveness, ability to be a leader in the market, how difficult is it to penetrate, profitability etc. Evaluate whether to go into blue ocean markets or closer extension markets. New markets are typically long term, high risk, high learning. Market extensions give short term results, and are less of a risk. The evaluation should not be an armchair exercise. Often such plans get done in the conference rooms. The company’s own sales teams are not consulted, leave alone channel partners and customers. Sales reps and channel partners are easiest to contact for ground feedback. Touch base with your own customers to validate. Sometimes it makes sense to also touch base with non customers in new markets to gain insights.
The next step would be to prioritize markets for penetration. Which are the beach head markets, medium term play and long term markets. How certain are the opportunities here, will there be quick wins for sales, or is it too far away across the horizon? What are the channel building requirements? Is the marketing team ready with appropriate messaging? Or does this have to be a totally new positioning and done from scratch? Finally, we must make sure that there is a strategic fit with the business goals of the company.
Understanding the customer
At most companies, we find that efforts have not really been made to understand the customer. Growing revenues does not really mean that everything about the customer’s needs are known. At a design services firm, the team has been providing products and solutions for more than two decades, but do not yet know which of their customers prefer products, which ones want total outsourced solutions, who needs training etc. Despite the fact that this is a complex high touch solution with high customization, the approach is very transactional. There has been no effort to align with the goals and work plans of the customer. They have not yet invested time and effort in mapping and aligning themselves with strategic accounts. The marketing team has not yet figured out the type of experience that the customer wants. They have not had frank discussions with customers on strengths and weaknesses, expectations. The angle has to be how to make the customer succeed. At another company which supplies products to the hospitality sector, all sales are done by high cost sales reps. They really had not gone into depth on the types of customers they serve, and segmented them. Project sales, sales from capex, replacement sales could be through different channels for geographically distributed customers. 5 star customers might prefer high touch experience – meet reps with a knowledge of global brands and positioning among leading hotel chains, while value oriented buyers may prefer to buy through low cost distribution channels and do not look forward to such ethereal discussions. Knowing these customer preferences goes a long way in designing an appropriate strategy.
At larger companies understanding the customer can be taken to a very different level. Marketing needs to realize that customer decision making is not usually rational and there is politics involved. Hence they need to be able to identify the politics within the organization and the people involved and hypothesize on causes of wins and losses, determine sales turning points, and analyze them, so that the company can be better prepared in future. Getting customer advice and recommendations regardless of a win or a loss is also very useful. These are true customer insights which can be used to device strategy as well as do a true marketing tools audit that will identify gaps in marketing assets at every level of the sales cycle.
Looking for new Markets
Market creating is creating blue ocean spaces, not competing in the same red ocean. It does not mean creating a niche market, by differentiation or through low cost strategy. Nor is it entirely about technology innovation like the segway – which incidentally was a great innovation, but failed to find sufficient buyers, since buyers doubted that it could be ridden everywhere – like large indoor spaces, campuses, outdoors etc. Whereas if technology address a need, adds value, makes things simpler, more productive, then people simply fall in love with it. One example is sales force. It simplified CRM and made it adaptable. Similarly, whatsapp, an OTA that is threatening to bypass carriers, is allowing people to communicate with text, videos, calls and keeping things simple. It has created a whole new market of users and groups.
We can also create new markets by speaking to non customers rather than existing customers. Sony for example, really studied users of ebooks and launched an ebook reader that was much better in every way compared to competition. But Amazon also understood non-users of ebooks and figured that content is what attracts them; they launched kindle and it came with access to a number of titles. This opened up a whole new market. This is new market creation.
Design a channel strategy
After segmenting, targeting, understanding customers, positioning ourselves, exploring new markets to enter, comes the task of reaching out to these markets. Channels are routes to reach customers, Customers can be reached directly through a sales force or indirectly through distributors, volume resellers, value added resellers, service and support partners, solution partners, partner retailers etc. They can also be reached through direct to customer channels like website, e-marketplace, extranets, Tele channels etc. Choosing channels has not only market reach and cost implications, but can affect success. Direct sales channels are high touch and are high cost, but can deal with complexity, and enable a high degree of control. As we move down the spectrum towards, VARs, distributors, tele-channels, website, the reach increases, cost decreases, but we tend to lose control and need to keep the offering simple.
Often channels are chosen randomly. With the companies I have worked with, direct sales has been their first and only choice. Little time has been spent in evaluating a variety of other options available. It is useful if this is done methodically rather than just hitting upon an idea. It is an exciting exercise that the marketing department needs to perform every year in close association with sales, channels, knowledge of customers and competition. Processes, policies, metrics also need to be thought of and put in place to make results count and build scalability.