Companies utilize a go-to-market strategy with everything from high-touch enterprise sales models to low-touch/no-touch transactional motions. SAP and Oracle are great examples of enterprise motions. Atlassian Jira is an excellent example of a no-touch product.
How do you know which go-to-market strategy model is suitable for you?
The main element to differentiate the model is the amount of perceived value in the solution by the customer. Enterprise products sell for $100K or more in a first transaction and drive equivalent customer value. Transactional products start much lower, at one extreme less than $1K ARR. Of course, you can start with a $10K ARR transactional purchase and gradually grow the account to $1M. That happens, and as the deal size gets more significant for the follow-on business, a transactionally oriented company will add a more enterprise-focused go-to-market motion for upsell and cross-sell. However, the starting price point is the determining factor for the model.
If you know the model, how do you optimally align your entire lead-to-deal process to support it?
Consistency checks, including market sizing, product design, marketing motion, and the selling process, should align with the type of model used. The chart below provides a table of consistency checks you can fill out for your product. While many appear to be common sense, it is surprising how many companies slide into a different strategy across a single tactic without realizing the inconsistency. This slide could be internal or driven by customers. Imagine trying to sell a $1K ARR product that requires a security audit every time.
Here are the four areas of go-to-market strategy and tactics to check for your product.
Go-To-Market Strategy and Market Size
Market size based on the number of target accounts should map to the amount of value delivered by the product. Low-price products require tens of thousands of prospects to drive meaningful revenue. The opposite is true for high-value products. This measure is easy enough, but you would be surprised to find how many low ARR products are sold into small volume markets, yet they have monster growth goals and revenue projections.
Go-To-Market Strategy and
Product Design
Due to the lower price point, transactional products will likely be sold through freemium or trial-based experiences where professional services are not required, limited configurations are available, and you will likely sell the product to a department or individual. Enterprise products look very different, with tightly controlled proof of concepts and the use of professional services to customize a product sold for multiple departments.
Go-To-Market Strategy and
Marketing
Marketing highly transactional products requires public pricing, simple access to trial products, many practitioners in the marketing database to sell to, and simple packaging. Enterprise products restrict pricing access, requiring sales interaction and qualification. Enterprise sales motions are people-intensive and expensive. The sales team is targetting executives, and marketing delivers names into an account that sales builds into an org chart for penetration.
Go-To-Market Strategy and
Selling
Selling transactional products is theoretically simple. Individual contributors or managers can procure the product with a credit card using pre-published EULA and SLA. There are few internal standards or SECOPs review, little political implications for the purchase, and the upsell/cross-sell comes naturally. Enterprise products require CxO purchasing authority, complex negotiations with purchase orders and edits to the EULA, security audits, a complex political landscape to navigate, and an effort to upsell cross-sell.
Conclusion
A product’s price/value point places constraints on the tactics deployed in the GTM model. While there are no hard and fast rules, GTM teams should strive for consistency for GTM success.