Determining the Right Go to Market Strategy for you Product
There are many ways to get a product to market. Rent, buy, distributors, as a service, channel partners, etc.
How do you determine the right one for your product? These are the factors that are most influential to making the right choice:
As a first step, create a model for each of these factors.
Customer Acquisition Cost (CAC) can be modeled by first mapping the customer journey and then estimating the conversion rate and cost for converting a lead from one place in the journey to the next. Add up all the cost, and you have the CAC.? See our Go-To-Market Strategy tool . All things being equal (and they rarely are), the lower the CAC the better.
Capital Requirements: Some GTM strategies will require more capital than others.? Before choosing a GTM strategy, make sure you have, or can raise, the necessary capital.
Adoption Rate is how fast sales are going to grow. Some GTM strategies will grow faster than others, although there is generally a negative correlation with adoption rate and CAC.
Market Penetration: Some GTM strategies will limit the market penetration. For example giving a channel partner exclusivity could have a significant impact on how much of the market can/will buy your product.
Because each of these factors influence each other, there is no perfect GTM strategy. For example, lower CAC will likely reduce Market Penetration and/or increase Capital Requirements. Ultimately one will have to weigh the importance of each and make a choice based on this weighting.