Revenue is the lifeblood of any business. The harsh reality is that no matter how innovative your product, how illustrious your investors are, or how astronomical your market valuation is, your business won't survive without the ability to generate income. Sales, the vital engine that drives revenue, is an art often overlooked in the entrepreneurial journey. And in the increasingly competitive marketplace, making those crucial sales is becoming a herculean task.
My name is Wilson Huang, and as the person overseeing the go-to-market (GTM) at ATMOSIScience, I've learned some hard-hitting truths and practical strategies about sales that can make or break a business. I will share the first two GTM motions, combined with the lessons I learned from MIT Sloan in this article.
You've probably heard the saying, "There are no bad products, only bad sales reps." However, in the cutthroat world of business, having a stellar product that has reached product-market fit is only half the battle. The real challenge is selling it. According to
Let's take a look at the marketing industry as an example. In 2011, there were 150 players.
Fast forward to 2020, and that number has skyrocketed by 5,233% to a staggering 8,000. That's 8,000 companies all vying for the attention and wallets of the same customer base.
Interestingly, LinkedIn data shows that a career in sales is the most common path to the CEO role.
This isn't surprising when you consider the three primary responsibilities of an early-stage startup CEO: pitching the mission to potential co-founders, pitching the company to investors, and selling the product to customers. While there's no shortage of resources for pitching to co-founders and investors, practical sales advice is rare. That's why, in this series, I'll share the four most common B2B GTM strategies that any company, regardless of size or industry, can use to boost revenue and establish a repeatable sales motion. Let's uncover the secrets of successful GTM strategies.
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Product-Led-Growth (PLG)
Product-Led Growth (PLG) is a customer-centric go-to-market strategy that uses the product as the primary driver of customer acquisition, conversion, and expansion. It promotes a culture of end-user obsession, data-driven decisions, and continuous experimentation.
When PLG Works Best:
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The product addresses a universal problem, easy to understand and use.
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Users can influence the buying process and have an incentive to invite others.
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Low Customer Acquisition Cost (CAC) due to virality.
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Low marginal cost per user.
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For freemium models, a clear value proposition exists to convert users into paying customers.
PLG Complexity:
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The product's user experience is self-serving, ideally with a freemium or free-trial offer.
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The product delivers value out of the box, facilitating short sales cycles.
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End-users can make an initial purchase with their credit card, creating an opportunity for upselling.
Two Manifestations of PLG:
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The product generates leads via viral or network effects.
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Marketing generates leads, with the product driving them to become Product Qualified Leads(PQL), and potentially even into the customer and expansion stages.
Key Considerations for PLG:
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Prioritize virality, network effects, and community-building.
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Demonstrate clear value and reduce friction.
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Focus on retention and engagement.
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Seamlessly transition from product use and expansion to monetization.
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Paywalls should follow the actual value that the user receives, with pricing scaling as usage increases.
Examples:
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Calendly
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Zoom
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Slack
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Dropbox
2.Channel Sales
Channel Sales is a go-to-market strategy that involves selling through third-party intermediaries, often offering added value through integration and distribution.
Channel Sales Effectiveness:
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Channel Sales can leverage other ecosystems to accelerate growth, compared to a closed go-to-market strategy.
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Partnerships can contribute to high-growth businesses, generating more revenue than paid search. (
Wolfgang Digital ) -
Businesses use partnerships to acquire new customers (57%) and to foster innovation (44%). (
BPI Network ) -
By 2025, nearly a third of global sales is expected to come from ecosystems. (
McKinsey & Company )
Using Partners to Leverage "Other People’s":
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Other People’s Product or Service: Building new solutions by integrating your product with a partner's.
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Other People’s Marketing: Gaining new or wider distribution through a partner's marketing efforts.
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Other People’s Sales: Acquiring customers through a partner doing the selling for you.
Types of Partners/Channels:
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Influencer (Lead Gen)
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Affinity/Affiliate Partners
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Referral Advocates/Influencers
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Agencies
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Marketplaces
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Distributors
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Resellers / Value-added- Resellers
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Retailers
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Agents
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Dealers
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OEM
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Tech Integrations
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Consultants
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Integrators
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Managed Service Providers
Pros/Cons:
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Influencer/lead gen partners can open the top of the funnel and influence brand recognition relatively inexpensively. However, they may reduce lead conversion efficiency and raise customer "ownership" questions.
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Sell-through partners provide access to buyers and can fast-track market entry but require careful management.
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Retention/Growth partners expand solution sets for customers and drive stickiness, but there may be some loss of control over the customer experience.
Strategic Partnerships:
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These are broad, multi-department agreements aligning the strategic efforts of two or more companies with overlapping products or markets.
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These partnerships often cover Lead Gen, Selling, and Retention/Growth, and can lay the groundwork for acquisitions.
Key Takeaways for Channel Sales:
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Approximately 80% of B2B companies leverage partnerships.
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Partners can boost your entire go-to-market engine.
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Start with your area of greatest need.
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Experiment - partners provide a low-cost way to try something new.
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Partnerships require effort-success isn't free.
Examples:
- Toast
- Salesforce
- ATMOSIScience
- Microsoft
- Apple
According to the 2016 State of Partnering Study by Partnerpath, a partner values:
- Mutual trust, respect, and a collaborative relationship
- A dependable and consistent product
- A sound and viable business proposition
- Excellent technical support, both before and after a sale
- Brand visibility and efficient lead generation
- Active and meaningful communication, not just data sharing
Final Thoughts
In conclusion, the go-to-market strategies we've explored - Product-Led Growth and Channel Sales - offer unique advantages and considerations. A business's choice of GTM strategy depends on its unique context: its product, target customer, and market landscape. Both strategies require a strong focus on delivering value to the customer, whether that be through a superior product experience or through strategic partnerships that expand the product's reach and capabilities.
In the next part of this series, we will delve deeper into two other key go-to-market strategies that can help drive business growth. Stay tuned as we continue to unravel the secrets of successful sales motions and the art of winning the marketplace!