A Data-Driven Approach to GTM Expansion
A Data-Driven Approach to GTM Expansion
Three Steps to Refine Your Go-to-Market for New Markets
DEAR STAGE 2: We have achieved early stages of Product Market Fit in our initial market with revenue steadily increasing over the past 3 years and have been working to expand our TAM and move into a new segment. How do I use data to effectively drive market expansion? ~EXPANDING TAM
DEAR EXPANDING TAM: Successfully expanding beyond your initial ICP can come in many forms - entering a new geo, moving up market, tackling a new industry, etc…, but these changes can be daunting in the early days and your initial GTM strategy may not work. I asked Javed Maqsood, Stage 2 LP and GTM consultant who partners with software companies on this exact opportunity, to share his framework for market expansion.
We see a lot of startups moving into a new market or segment and struggling to adjust their previously successful GTM motion - the complexity of taking a winning formula and adapting it for a new segment needs to be carefully planned. Javed recommends taking a data-first approach to analyzing your current market and leveraging those success signals to build “GTM V2”. Read on to learn how…
Step #1: Analyze and Learn from Your Existing Go-To-Market (GTM) Strategy
You’ve already been successful in establishing initial traction in your core market, starting with a clear vision and moving through crucial stages like early research, MVP, and securing your first contracts. Now, it’s time to evaluate what made your initial strategy successful. Here’s how Javed recommends you approach this:
Identify Your Winning Formula: Ask yourself, “What made our GTM strategy successful?”
Assess Key Areas:
Product: What features or aspects drove the most value?
Marketing: What tactics worked best for customer acquisition?
Sales: How did your sales process contribute to success?
Post-Sales: What support or follow-up strategies enhanced customer satisfaction and retention?
Conduct a thoughtful assessment of these areas to pinpoint the elements that contributed to your success and how they can be adapted for your new target segment.
Identify and Refine Your Growth Catalysts from Your Existing GTM
Look across all of the signals you can measure for activation, adoption and ongoing usage across the business. Javed shares a few examples to get you started:
Top 5 product features used in the first 30 days
Top 5 product features that we consider is important for stickiness in the first 30 days
Which of the features can we use towards product market fit
Pricing - adoption
Onboarding Time to live
CSAT
Value creation cycle
Potential for upsell
Select KPIs for Your Overall Business - narrow those metrics down to the few most critical/impactful KPIs. For example:
Top 5 product features used
Value creation cycle length
Potential for upsell
Identify the Leading Indicator of PMF for Your Product - is there one KPI that most closely correlates with retention? We’ve written extensively on this topic in the past. If you want a deep dive on leading indicators of retention, check out this post.
Now that you have a short list of metrics, it’s time to review your KPIs objectively. How are you performing today and what would an ideal or target ‘score’ be for these KPIs? The objective is to continue to improve your performance on KPIs as you progress through growth and scale.
Step #2: Identify & Refine Growth Catalysts
By inspecting your entire business in Step #1, you should have identified a few KPIs that can help you evaluate growth potential in a new segment, based on learnings from your initial customer traction and early wins. The goal is to identify no more than 3 growth catalysts that, based on data and signals from the field, you can use in building your GTM V2.
Let’s use “Top 5 product features used” as an example of a growth catalyst.
When you assess your healthiest customers, you might see that they are consistently using 5+ features. And there is a stark drop off in retention if a customer is using less than 3 features. You might further explore the top 5 most used features in your product.
The question you could ask yourself: how would these features be utilized in an ideal use-case for a potential customer in [new segment/market[?
You could also flip this on its head. Knowing you are striving for concurrent feature usage can hypothesize plays, in your product and for your team to run, focused on customer adoption to drive feature usage from 1 to 2 to 5+ over time.
Step #3: Develop and implement GTM V2 for the new market/segment
One of the most critical pieces of developing your GTM V2 is getting crystal clear on your Ideal Customer Profile. As you expand into new segments—whether moving upmarket, entering a new region, or exploring a new industry—it’s important to define who your target customers are, and why they are a fit (or not).
Javed advises starting with a narrowly defined segment that has the strongest alignment with your existing successful use case(s). Once you’ve selected this segment, use your insights from GTM V1 and the growth catalysts identified in Step #2 to experiment with a mini-GTM V2. This might involve:
Product-Led or Sales-Led Approach
Targeted Marketing Outreach Using the Right Channels
Refined Sales Pitch
Updated Customer Journey and GTM Plays Supporting Your Growth Catalysts
Once you’ve launched your mini-GTM, it’s time to run through the essential iteration cycle: Try, Fail, Swap, and Succeed. This iterative process will help you refine and solidify your GTM V2.
With your GTM focus clear, shift to execution:
Re-align Your Revenue Plan: Adjust your revenue strategy to match your new GTM approach.
Build Playbooks: Create detailed playbooks for both company-wide and business unit-specific strategies.
Develop an Execution Roadmap: Outline milestones, timelines, and checkpoints to guide your implementation.
Allocate Resources: Decide whether to hire new talent or re-purpose existing resources.
Adjust Processes and Tools: Update your processes, tools, and pricing as needed.
Address these key areas, and you’ll be well-prepared to execute your GTM strategy and expand your TAM.
Until next week!