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How to achieve Offering Maturity Level 2: Go-to-Market Fit

(This post originally appeared on LinkedIn here)


Go-to-Market Fit (GMF) requires the precise understanding of the Ideal Customer Profile (ICP), including their specific needs, challenges, and how the product or service addresses those needs.


While in B2C the customer is an individual with its individual needs, preferences and demands, in B2B the customer is an organization subject to influences from their own customers, their competition, their environment, and their shareholders. To make things more complicated, significant buying decisions in organizations are not made by individuals, but by groups of people.


As a result, the ICP in B2B must not only specify the ideal customer by static criteria such as the organization’s industry, size, location, legal form, but also by dynamic criteria like growth-orientation, profitability, risk-attitude.


Once the ICP is defined, GMF requires a channel strategy for reaching and engaging with the target market efficiently and effectively. In Level 2 a vendor should focus on one channel in order to quickly learn and optimize the Go-to-market Model for scale. Multiple channels lead to competing priorities and worst case channel conflicts damaging the vendor’s market perception.


For GMF we need a compelling messaging that clearly articulates the value and benefits of the product or service resonating with the target market buyers and setting the offering apart from competitors. If our offering is very innovative or even disruptive, the need for it has not yet been realized by potential customers and we must educate them on the quantum leap business improvement it drives.


GMF requires a pricing model that aligns with customer expectations, provides perceived value, and remains competitive within the market. The ideal pricing model lowers entry barriers by requiring minimum upfront investments and aligning costs with the generation of business outcomes.


Next, we need a comprehensive marketing plan that effectively reaches and engages the target market buyers to generate awareness, drive engagement, and establish our brand image.


To ensure the vendor’s financial performance we must define and execute a sales  and marketing strategy with tactics and methods for acquiring new customers. For this we need a clear understanding of associated costs and conversion rates to control the negative cash-flow resulting from these activities. The longer it takes to compensate customer acquisition costs (CAC) with resulting revenues the bigger the funding required to finance negative cash-flow.


Besides a strategy for acquiring customers we also need one for retaining existing customers and maximizing their lifetime value through upselling, cross-selling, and ongoing engagement. If we lose customers before we are able to compensate for their acquisition costs we will only increase negative cash-flow with every new customer we win!


Last but not least we need mechanisms to collect feedback from customers to refine the go-to-market strategy and enhance the offering. The fewer customers we have the more we are at risk of developing customer-specific offering capabilities that don’t strengthen our wider market appeal so we must have a solid decision making process between sales, marketing, product development, and finance to ensure our offering improvement meets demand of the entire target market segment.

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