Developing Your Go-to Market Strategy
Every CEO would smile ear to ear if they could grow their business faster than the industry. A well designed go-to-market strategy is imperative to achieving this level of growth and it requires more than sales, operational and/or recruiting experience. Consistently beating the industry requires management acumen and marketing expertise. In fact, organizations with little or no management and marketing experience are prone to commit mistakes when designing their go-to-market strategy. In some cases they flat out neglect this step altogether.
In this post, developing your go-to marketing strategy, I’m going to share with you what a go-to-market strategy is, why you need one and the key elements to consider when designing your go-to-market strategy.
What is Go-To-Market Strategy?
A go-to-market strategy defines how the company will operationalize their offerings to penetrate their market and achieve revenue and profitability goals. Your go-to-market strategy is not a one-time event and it’s not a new product launch or a marketing campaign. It encompasses everything from concept to deployment and execution and continuous iteration. Designing a sound go-to-market strategy requires staffing leaders to point their resources at the right markets through the best channels. When establishing your go-to-market strategy you should consider the following components.
Total Addressable Market
In order to determine your coverage and resources needed to penetrate your market you first need to understand what your total addressable market is. If you don’t understand your total addressable market you will miss revenue opportunities.
Identify Your Ideal Target Customer Profile
In order to maximize market penetration you will first need to define your target market. Start by identifying and defining your ideal target customer profile including their demographics. Part of this process also includes identifying who your target buyers will be such the Human Resources Manager or the CIO.
Geoffrey Moore, who is a management consultant and well known throughout Silicon Valley for his work in marketing high-tech products and authoring his classic boopk, Crossing The Chasm, pointed out that “Companies that try to be all things to all people have significantly higher costs, never really establish a strong customer base from which to grow and often disappear before achieving profitable growth.”
I suggest we take his advice, identify your ideal target customer profile.
Value Proposition & Differentiation
Running an IT staffing business means you’re in the services industry. The industry of course is saturated with suppliers which makes it a commodity. You have to decide, are you going to compete and differentiate on price or customer experience? In my experience, most staffing owners neglect this decision all together which is partly the reason for why you have sales reps working for the same company who have a huge disparity in their average gross profit margins.
Once you determine how you’re going to compete and differentiate you can build your value proposition. Read this blog to learn more about value propositions and how to build them.
Have you selected the best, most effective sales channel for your market? Most staffing companies deploy a direct sales team but that doesn’t mean it is the only sales channel or the most effective sales channel. What other sales channels might you consider?
Determining which sales channels will give you the biggest bang for the buck is a strategic decision that should be made by the CEO and/or Sales VP. Failing to explore and consider alternative sales channels for acquiring customers at a quicker rate and/or cheaper cost would be a big oversight for any business owner. Top performing organizations understand which sales channels their customers prefer and respond and adapt accordingly. Why continue to use traditional channels when new, innovative channels are available and the customer prefers them over traditional means?
Scale and Bandwidth
This refers to understanding how big of a sales and recruiting team you will need to eventually scale to the size necessary to achieve your market share goals. You can figure this out by reverse engineering the numbers based on your total addressable market and your revenue and profitability goals. There are however a few common pitfalls that you should be aware of. They include:
- Not deploying enough resources across your market will lead to under penetration. Very common in the staffing industry (think branch offices in major cities with only 2 sales reps)
- Failing to direct your resources at the right market segment within your market (failure to identify the highest growth potential where penetration rates are low)
- Failure to balance scale and bandwidth with growth rate goals. If your goal is to grow your market by 10% you need to map out how much growth will come from the existing sales team with deeper penetration of the market vs. new sales reps generating net new revenue growth
- You will need to determine the mechanism for you how will you achieve this uplift in revenue. Are you going to increase deal size or improve win rates or do you have another plan? Your strategy should detail the specifics beyond simply increasing sales rep head count and/or closing more job orders.
What Do I Do Next?
After reading this you may be thinking you need to update your go-to-market strategy. Below are five key indicators that your peers in the IT staffing industry use to determine if and when they need to change their go-to-market strategy.
- The IT staffing industry including your top local competitors are growing faster than you are
- Your market penetration rate is low and slow (great for BBQ, not good for growing your business)
- Your market(s) has matured (think VMS account saturating your market) and you need to enter new markets
- Your current customers are not buying more of your services
- High customer churn: Your customers fail or struggle to see the differentiation in your offering over your competitors
As I mentioned at the onset, your go-to-market strategy is not a one-time event but a process that evolves as your business grows and markets change. The fastest growing IT staffing companies including their CEO’s are aware of the potential pitfalls which is why they have adopted an agile go-to-market strategy. It is their willingness and courage to constantly iterate on their strategy that allows them to outpace the industry. Do you have the courage and are you committed?