Throughout my several decades-long career in the software industry, I have encountered scores of companies that have had great ideas, but never achieved success.
They checked all the boxes: they hired a talented team, built great products, established a global presence — yet they were not nearly as successful as they could be. Why not? The complex mix of strategy, messages, products, and overall execution, known as their go-to-market strategy, just wasn’t right.
[Read: If cocktail bars and strip clubs can adapt their businesses, then so can you]
That is one of the primary reasons that over 90% of startups ultimately fail. Unfortunately, just one flaw with a company’s go-to-market can make success seem like a distant mirage in a desert. Why is it so hard to get your go-to-market right?
There are many critical factors to a successful go-to-market, but I’d like to focus on some of the most common, yet acute, flaws I see. Most of these are based on my experience in the software world, but they apply broadly to almost any business.
Is it the right product?
I have been part of more than one company that had not yet achieved what is known as “product-market fit.”
This means that the solution is not carefully aligned with the needs, pains, and desires of the customer. Often, it takes time to get these aligned, but out of sheer enthusiasm, many founders, companies, boards, and investors hit the gas pedal and blow through their capital before they have answered these critical questions.
In short, everyone is “drinking the Kool Aid,” just not the customer. I recently met a CEO who had hired four sales reps before many critical — and basic — questions were answered about the customer, and well before a product-market fit was established.
I’ll go on record to state that “this may not end well!.”
Make sure you test for product market fit and understand the problem you are solving well before you start to scale your business.
Are you knocking on the wrong door?
Are you targeting the right buyer? Can you easily get to them, and do they have the authority and the budget to acquire your product?
Every additional approval stage you need to go through makes your sales cycle longer, and less likely to succeed.
Is there urgency to buy your product in order to eliminate a painful problem, or is your product in the dreaded “nice to have” category?
I previously worked with a company where I restructured the sales aspect of their go-to-market and moved the sales process up the chain to a more senior buyer.
While this buyer was harder to gain access to and required that we replace some junior sales reps with more senior sales reps, the outcome was much greater — the company’s growth went from flat to filing an IPO with a great exit.
Had we not made this critical change to our go-to-market strategy, the company would never have grown. Even if you feel that you are successful with the products you’re selling today, carefully consider whether you are missing out on a much bigger opportunity.
Your elevator pitch requires 100 floors
A surprisingly common issue I encounter with many companies is a lack of simple product positioning.
Many companies start with talented technical founders — they have vision, they can build products that can do great things…yet, they lack the ability to succinctly explain what they do.
For example, an engineering-driven company will rush to explain features and capabilities: “Our lithium polymer battery now has double-layer capacitors.”
That may sound great to the team that created the product, but a buyer may have a difficult time understanding how that will benefit them.
Conversely, a market-driven company might simply state: “Our battery will power your car all day long.”
Not being able to clearly articulate your business value will redirect potential buyers to your competition.
Simply stated, if you focus on whiz-bang features instead of how it will help your buyer, you are almost guaranteed to kill an opportunity to sell your product.
Furthermore, if your own team hasn’t nailed the pitch, don’t expect channel partners or resellers to do so either.
Your growth will be constrained until you overcome this problem. I see it almost every day in the software world.
To be a market-driven company, it is critical that you tailor your message for your audience and keep it as simple as possible.
Tell me again, how much does it cost???
If you cannot explain your pricing in less than 10 seconds, it is too complex, period.
If you need to run calculations, or if your pricing model is a disincentive to using your product heavily, it’s a lose-lose situation.
Keep it simple and easy to understand. And — if applicable — always look for ways to structure your product licensing to create a long-term relationship.
Why sell a one year license when you can secure a three-year license? Even if you have to add a small discount, the chances of losing the customer to the competition are reduced, and your team can focus on growing the relationship or selling to new customers, not processing a tedious renewal.
Your pipeline is a “pipe dream”
The relationship between marketing and sales is ripe for tension and discontent because of a lack of alignment.
It is easy to talk about leads and pipeline and sound like you have full command of the sales funnel.
Yet it’s shockingly common that I receive a blank stare when I ask, “What is your conversion rate?”
Sometimes, companies aren’t able to calculate conversion rates due to system or data limitations, but more often, they just don’t take the time to do so.
I recommend that companies spend time focusing on fewer, yet more relevant metrics.
You don’t need a dashboard with 20 different metrics, you just need to agree upon a small number of critical measurements and desired goals.
For example: Your conversion rate is a critical metric — you are measuring your marketing and sales success rate, and the ROI of every dollar you spend.
Take a step back from building your pipeline and sales funnel and make sure you have an agreed-upon answer to these fundamental questions: “What is a qualified marketing lead?” and “how long will it take for an average sale to close (your sales cycle)?” and “what is our current and desired conversion rate?” and last, “what is an acceptable cost to acquire a customer?”
Until you do so, avoid reporting the number of leads delivered to sales, as the data is not useful or accurate, and you definitely shouldn’t be wasting hard-earned venture capital on marketing programs you aren’t accurately measuring.
Get accurate answers to these questions fast and make sure you have alignment between sales, marketing, and executives at your company around these answers.
I always strive to look at a rolling pipeline and aim for at least 4x what you need.
Of course, this depends on the key questions posed above; if you have low conversion, 4x may be insufficient.
Ultimately, you must know your performance metrics and use them to properly fuel your go-to-market.
They do it “this way,” we do it “that way”
Very few companies have a globally consistent go-to-market.
Often this happens for completely benign reasons. I was helping a company understand why conversion was inconsistent and they told me that, “In the UK, buyers want a product demo, not a presentation.”
The same sales team informed me that they “only use presentations in the US and avoid showing products altogether.”
Make sure you have a consistent approach to your go to market and overall sales cycle.
Otherwise, coaching and measurement will be very difficult. This takes constant effort — sales process and messaging will drift if you do not actively manage a consistent sales enablement and coaching process.
Embrace a single, consistent sales methodology so your team is aligned both in terms of the language they use and their process.
It doesn’t matter if it is based on, The Sandler Sales method, Selling Through Curiosity, or Spin Selling.
If your team does it “their way,” instead of achieving global consistency, you will never be able to accurately measure and understand what is working and replicate success.
You need a game plan to tie it all together
When the quarterback on a football team calls out a play, all 11 people on the field know exactly what to do.
If your marketing and sales team are on the field, yet lack a common playbook, how will they know what to do?
Very few marketing teams are aligned with sales teams. They need to work together to create simple, repeatable sales plays to become aligned as one to execute a simple process, from lead to qualifying, closing, and onboarding the customer.
Why is it just so damn hard to achieve success with your go-to-market? As I have detailed above, there are many complex variables that must be optimized for an effective go-to-market.
Often, there is no single person who owns a company’s go-to-market. Instead, there is a separate sales perspective, marketing perspective, and a product perspective. This forces the need for constant adjustment and realignment and tends to create tension.
I recommend finding an executive with broad experience who can oversee and continuously optimize your go to market.
Sometimes this is referred to as a “GM,” but ideally, someone who has experience in marketing, product management, sales, enablement, and partnerships.
Sometimes this can be done by the CEO, but time and bandwidth are often limiting factors. Unless you have one senior executive who oversees the overall go-to-market, and owns the metrics and is fully accountable, you are likely to fail.
Whether your approach requires many functional leaders to work together, or if you have a single “go to market owner,” you will need to invest a lot of time on introspection.
You must take time to step out of the day-to-day execution at your company (leave the office) and convene as a team to focus on the overall go to market.
As I like to say, you need to work ON instead of IN the business at least once a quarter.
I have helped many companies go from zero to over a million active customers, and from no growth to hyper-growth and experience great exits. I hope my experiences shared in this article have been thought-provoking for you.
Published May 4, 2020 — 08:30 UTC
