The phrase go-to-market strategy might sound like a swear word to people in SaaS who don’t fully understand the purpose and the value it will bring to their business 🤬
In this article, I’ll break down the key concepts of a SaaS go-to-market [G2M] strategy from the conversation I had with expert Alex Urquhart on my very first episode of SaaS Chats featured on YouTube.
Whether you’re a SaaS founder or marketer, you’re bound to get some great takeaways from what you’re about to learn.
So keep on reading.
What’s a SaaS Go-To-Market Strategy?
A SaaS go-to-market strategy is the foundation of taking an idea or minimum viable product [MVP] and setting the course for entering a buyer’s market with a well-documented path.
The core pillars of a G2M strategy are:
- Purpose and intention of the product
- Defining your ideal customers and their traits
- Pricing strategy, i.e., subscription service or enterprise service (teams of 50 people)
- Navigating large complex sales processes
- Hiring sales teams
- Payment processing
- Distribution strategy, i.e., high volume, low price
- Total addressable market (the more specific, the better)
The first G2M strategy is based on what the current market is telling you, and then you make educated projections on how to move forward with the growth of your SaaS company.
You’ve got to be smart with limited time and financial resources — and the fact that many SaaS startups go to market while they’re still building.
Watch the full video:
About Alex Urquhart
Alex Urquhart has an extensive background in civil engineering and strategic marketing from working in various startups and tech companies, gaining experience in sales, marketing, and growth.
His consulting business, Market Science, helps startups with their go-to-market strategies.
Alex emphasizes the importance of a targeted go-to-market strategy to effectively reach and engage with the right customers. He also highlights the need for continuous adaptation and listening to the market to stay relevant and successful.
Consequences of not doing a GTM strategy
The fact is that if you don’t have a direction, in the beginning, to distinguish yourself in a specific SaaS category, then you’re bound to make a lot of amateur mistakes that could have easily been prevented with research and strategic testing.
“I’m all for keeping the spectrum wide because you don’t know what you don’t know, and there is a learning process,” says Alex.
However, you have to set a direction because if you don’t do it right off the bat, you’ll find yourself doing everything. Anyone who’s a developer or has worked as a product manager knows that a product must have direction or at least a purpose they’re trying to get out of it.
“There is an infinite number of things a business or startup SaaS company needs to do, but if you don’t have that direction to go to market, that creates overwhelm and uncertainty,” says Alex.
Without defining what your product is for and who your startup will serve… it’s possible to get several customers who use your product differently, all while expecting your SaaS company to do custom development to meet their specific needs.
In this case, it may be better to say “no” more than “yes” to the type of customers you onboard with goals like:
- 12 month’s goal is to get ten customers who are the right fit
- Paying X amount of money
- Retaining all of the customers
- Developing the product to serve them perfectly
Proving your SaaS concept
“A lot of marketers will roll their eyes, but I think adding more budget to something should only be done once you prove it’s working with a good strike rate,” says Alex.
That’s where testing and checking everything comes into play.
If you don’t have a proper budget for proving the demand, then you’ll need to spend time networking, making referrals, and setting up a test group to get user feedback by offering potential customers free subscription access or some other affordable perks.
Another valid point Alex made was that the founder should be able to sell the product first. That’s because if they can’t do it themselves, it causes a major communication and training issue when hiring new sales and marketing people. This lack of proof that people want to buy your SaaS solution will make prospective hires think twice about working for you, especially if they’re very experienced candidates.
A founder should be able to confidently say, “I’ve already sold it, and this is how to find your leads, demo the software, and win the deal.”
Proving your SaaS concept also goes a long way when you’re trying to impress investors for your next funding round.
Main components of a GTM strategy
A G2M strategy is defining your vision for the product and what the customer journey will look like.
Purpose, exit, or keep going with the company.
Without a well-defined go-to-market strategy, companies might struggle to position their product effectively and attract customers.
Unique Value Proposiiton [UVP]
Many founders become blindsided when they find out they aren’t first to market with a specific solution.
What are things no one else in our market does?
Building something to solve a problem without doing a quick Google search. “It’s astounding what products exist already,” says Alex.
Being first to market isn’t always a positive thing, though.
That’s because competitors can quickly learn from your mistakes and approach the market from a better vantage point that meets the customers’ needs and results in more sales and longevity for their company.
Instead, founders and developers should also be asking:
What are potential customers not already getting from a competing product category?
Choosing a target market is crucial in a go-to-market strategy. It involves identifying a specific group of customers that the company wants to focus on and tailoring the product or service to meet their needs.
Without a defined target market, companies may struggle to create effective messaging, differentiate themselves from competitors, and reach their desired customers.
There are actually eight types of market segments, not four like most classical marketers teach.
- Geographic segmentation
- Demographic segmentation
- Psychographic segmentation
- Behavioral segmentation
- Benefit segmentation
- Firmographic segmentation
- Life stage segmentation
- Technographic segmentation
The first four focus on where people live, who they are, and how they feel, think, and act.
Almost everyone is looking for a benefit from their transactions, whether they’ve invested their time, money, or both. And so, depending on what benefits are promised or they’re expecting, you’ll be able to group and market to the audiences more precisely in marketing or ad campaigns.
Firmographic data allows for strategic targeting based on a business or organization’s shared or different characteristics. For example, this research can easily be done with LinkedIn’s hundreds of search filters to narrow down the target market within Sales Navigator.
Life stages are often overlooked and can affect all the other seven segmentation considerations.
And finally, technographic data can give you insight into what types of devices, software, hardware, and applications someone is using in their tech stack.
Picking your Niche
It’s important to strive to be the best in your market by being as niche as you can while still having a large enough total addressable market [TAM].
If you’re trying to be the best CRM in the world, you’ll be in a long uphill battle.
However, striving to be the best marketing graphic design tool in LA for people aged between 25 and 40 will make it much easier to own the niche because there are very few competitors in this case.
“The more niche you can be, the easier it is to own that niche and tailor the value to your target audience,” says Alex.
Another example is that instead of focusing on a wide audience of marketers in the US, you can target:
- Marketers in California who are part of a startup
- Marketers who are in a certain place in their career
These customers will more likely become long-term loyal customers because you meet their very specific needs.
Personas are what make up your ideal customer profiles with information from the target market you’ve chosen. It’s typically created like a dating or social media profile.
What many don’t know is that there are actually four different types of personas.
Contrary to popular belief, most people don’t buy with emotion and justify with logic — it can be either one.
The first persona thinks competitively and wants quick answers that can be justified logically. If you can show why your software is better than that of your competitors, they’ll become raving fans and regular users.
The second persona makes quick decisions on an emotional basis because they want you to make them feel why they should purchase a subscription now. That means your marketing would be geared toward the feeling they will have after getting results from your product or service.
The third persona wants to feel like they can relate to your company in a personalized/humanized way and believe in what you stand for because it’s a reflection of themselves. They put more thought into their buying decisions after slowly sorting out their emotions.
The fourth persona makes completely logical decisions and is the most difficult person to convert into a paying user. They research everything, including your website, social media, YouTube channel, reviews, and any free trials you’ve got before finally clicking that buy button. This person enjoys the educational content the most when they’re being marketed and advertised to.
With this new knowledge, you can fine-tune your go-to-market strategy based on the type of SaaS product or service you’re selling.
Gathering data from ideal customers about what they think the value of your product is and what they’d be willing to pay through surveys is beneficial.
Many times, customer expectations on pricing are based on competitors (value has to match or exceed the price). And so you’ll need to justify why your SaaS product or service is worth 3X the price.
Also, choosing to pay a certain price will depend on if it’s for business, personal, or casual use. In other words, will I be able to increase my profits by using this software tool or not?
You could probably sell Canva subscriptions for $1,000 per month, but the overall market doesn’t value it at that price.
Remember, something is missing if they aren’t paying and just sticking with a free trial.
Discounting shouldn’t be done long term since customers will talk to each other.
If you’re planning on offering lifetime deals through sites like AppSumo, it’s recommended to set a limit from the beginning with “first customers,” and after that, give a reason why it’s going to full price.
Ultimately, people stay long-term because they are getting value from your service even though they’re buying a half-completed product in the early stages.
Even with a discounted price, people will still cancel their subscriptions or ask for a refund if your product isn’t useful to them anymore.
Actually, the higher your price, the more perceived value you’ll have (if you can be convincing enough) with offer/value stacking. By doing this tactic, you’ll become less of a commodity that’s strictly compared on the basis of pricing.
The core of a distribution strategy answers, how are we gonna go to market with it? Keep in mind, though, that this is not a replacement for a proper marketing strategy with a plan to implement it.
Should we do paid ads? Organic YouTube channel? Write articles and blogs?— all of the above?
Another consideration is whether you need a sales team or not.
B2B will have a much different inbound and outbound strategy than B2C product-based software.
Or you might distribute your SaaS on sites like AppSumo, and Product Hunt that can provide you with quick feedback and exposure while measuring interest with upvotes and clicks. They also offer marketing and advertising options to reach your ideal audience, too.
Onboarding new users can have an automated process too.
That way, you can be more efficient with your internal resources, prioritize your team’s time, and improve the customer experience by following a well-laid-out customer journey.
According to Hubspot, you can automate customer onboarding by:
- Defining the goal of automated onboarding
- Choosing what kind of automation you’d like to use
- Collaborating and aligning with the right departments
- Putting the customer experience first
- Reduce friction when adopting the new onboarding process
- Continually improve from customer interactions and positive or negative feedback
Repetitive training can be recorded and documented to save time and frustration.
This can come in handy for three scenarios:
- You’re a growing company with new staff being hired every month
- Employees want to read and learn from hundreds of helpful articles
- You’d like to simplify the learning curve because you don’t want to scare away your customers
Customer retention requires a lot of attention from the founders initially.
Be prepared to be a high-touch support person with the expectation that, over time, you can remove yourself since you can’t spend 10 hours on one person.
Many customers come to expect white-glove implementation services, which you can charge a premium for or use as a value add depending on the costs.
Hire a customer support person ASAP if profit margins allow it.
Every SaaS company dreams of product-led growth where a customer pays and doesn’t ask for support. It took Canva decades of learning to get to that point.
While improving customer retention rates, you should ask them:
- Why did someone try?
- Why did they buy it?
- What was their rejection?
- Why did they leave?
Having this information allows you to tweak pricing and create a better value proposition that supports your user’s desires.
Then, revisit the customer retention topic every couple of months because it’s an ongoing process.
Who knows, you might even be able to get returning users in the future because you know what the problems were, and you can brainstorm how to resolve them.
hiring a GTM strategist
If you’re trying to do this on your own…
- You could use the back of a notepad or Figma,
- Do all of the research yourself, and
- Attempt to craft an expertly written GTM strategy
Or you can ask for a 1-hour recommendation report from someone like Alex Urquhart to save you time instead of ducktaping things together.
There is a GTM textbook strategy — for framework and fundamentals.
You can learn from how to create a go-to-market strategy from marketing sites like Hubspot and SEMrush and apply the content in an actionable way, but time is money.
A bulk of the research can come from Product Hunt or similar software sites, social groups, and paid ads that garnered a lot of attention.
While performing cost-effective data collection is important, you should have an experienced professional advisor analyze your findings.
Try talking with people who’ve done what you did before in your market, and don’t be afraid of them poking holes in the original strategy.
If you’re an established SaaS company looking to launch in new countries or markets, this is where a professional strategist can help the most. This can help break down how you’re really gonna make it happen in a detailed manner and prevent oversight in a professional presentation deck.
Measuring the success of GTM strategy
First, you’ll want to set your GTM objectives and what success means for you.
The next step is to choose which metrics can prove that the success you’ve achieved actually happened. Typically the most important metrics include:
1. Monthly Recurring Revenue [MRR]
Calculated by how much money was generated before expenses and taxes. This is the ultimate success indicator for GTM strategies.
2. # of new customers and win rate
Run the numbers to see how many people actually started using your SaaS product or service. Then, determine how you’ve won them — or was it a luck streak?
3. Churn rate and trends
Churn rate determines what % of users are cancelling their subscriptions or accounts. It’s important to track this over time to prevent any chronic downward trends.
4. # of Demo Bookings
Figure out how many demos were booked and what the show up rate was so that you can figure out how to get more people to attend.
5. # of Qualified Leads
There’s a difference between marketing qualified leads (MQL) and sales qualified leads (SQL)
MQLs show interest and have downloaded content from the marketing team’s efforts.
The sales team will need to determine how many of the leads have made it to the sales funnel (like filling out a “book a demo” form) and meet the requirements of a valid potential user.
6. Customer Acquisition Cost (CAC)
Knowing the cost to acquire a customer relative to ad and marketing spend is critical. That way, you can do more of what’s working and cut the budget in areas its not as effective.
7. # and Type of Support Tickets
Review how much users are putting a demand on your support team, and what the categories of requests are. Then, figure out ways to streamline the process more potentially with AI or other specific processes.
8. Website Traffic
How well is your website in converting traffic into paying customers? Websites that are purely informational can be a waste of internet real estate.
9. Net Promoter Score
This score grades you on whether or not you have loyal customers and product recommendations.
10. Sentiment Analysis
- Are people interested in your product?
- Is there excitement to talk about and share your product with their friends or colleagues?
- What percentage of registered users are willing to pay for your software?
Once you have a wholistic view with all the facts in front of you…
Reverse engineer the steps of the customer journey to see if anything is broken or could be enhanced from the data you’ve collected and analyzed.
It’s common for SaaS founders to skip or half-ass their go-to-market strategies.
There could be serious repercussions to the speed at which they grow and the longevity and profitability of their company.
While some of the GTM process is trial and error…
Make sure you seek expert advice to analyze the market and make an action plan on how to approach becoming the leader of your industry by winning customer share.
Without proper research and assessment, you’ll end up wasting a lot more time and money in the end.