Go To Market Strategy: Practical Approaches to Design ...€¦ · • Marketing Strategy involves WHO you will go after and WHAT you will offer them. • Go-to-market (“GTM”)

© Copyright 2011 The Sales Management Association

September 7, 2011

September 7, 2011

Presented by:

Charlie Thompson

Axtria, Inc.

[email protected]

404-388-0950

Go To Market Strategy: Practical Approaches

to Design, Optimization, and Assessment

Copyright © 2011 Axtria, Inc. All Rights Reserved.

Companies don’t compete …their

demand generation channels compete

mailto:[email protected]

Today’s workshop has the following objectives:

• Introduce Go-to-market (GTM) strategy concepts

• Provide a practical GTM design roadmap

• Discuss practices for channel measurement and

management

• Emphasize direct sales organization (but not exclusively)

• Collaborate, share, interact

Slide 2 Copyright © 2011 Axtria, Inc. All Rights Reserved.

Agenda

• What is GTM ?

• What’s the theory ?

• How design GTM strategy ?

• How measure ?

• How manage ?


Designing GTM strategy is a bit like Tetris.

Connecting your firm …

…with your desired customers


Key Definitions

• Marketing Strategy involves WHO you will go after and

WHAT you will offer them.

• Go-to-market (“GTM”) Strategy is the HOW component of

marketing strategy

• GTM encompasses the CHANNELS that a company uses to

connect with its customers and organizational PROCESSES

it develops to guide demand generation & demand

fulfillment

• A Marketing Channel is a set of interdependent

organizations involved in the process of making a product

or service available for use or consumption


Sources: Kellogg on Marketing, Dawn Iacobucci, ed, Lou

Stern, Ann Coughlan pp 247-269

Welcome to Atlanta, let’s talk

about Coca-Cola


Channel case exercise


Warehouse Grocery Convenience Vending Fountain

Characteristics of Each Channel

Agenda

• What is GTM ?



• How measure ?

• How manage ?


Why is ‘theory’ relevant to practitioners ?

• Use as a checklist

• Think holistically … system dynamics **

• Create competitive differentiation …

• ..or competition will satisfy for your

customer

** Check out Steven Spear, MIT system design & management

http://sdm.mit.edu/news/news_articles/spear-high-velocity/spear-high-velocity.html












GTM Building Blocks

Potential Customers

Company Products Services Costs Value Proposition

Service Output Demands

C

h

a

n

n

e

l

Channel

Channel

Chan

nel

Channel


1

3

4

2

Service Outputs Demanded by Customers

from Channels (Checklist I)

• Break Bulk

• Convenience

• Wait / Deliver Time

• Assortment

• Customer Service

• Information

Sources: Louis Bucklin, Theory of Distribution Channel

Structure; Marketing Channels, Lou Stern, Ann Coughlan,

Erin Anderson, Adel El-Ansary


Service Outputs Case Exercise Warehouse Grocery Convenience Vending Fountain

High ==>

LOW ==>

Customer

Service

Information

Degree of Intensity Service

Outputs

Break Bulk

Convenience

Wait /

Delivery

Assortment


‘Freestyle’ has potential to redefine a channel

• "PurePour" technology – adapted from

medical technology to dispense precise

amounts of drugs

• Cartridges – adapted from printer cartridge

business

• RFID – right cartridge, right place, right

amount

• Close loop information -- sensor data about

mixes, consumption patterns, profile

locations, refill, recalls

• Inform new product development

• Anticipate: Facebook app to create

“Charlie’s mix”’ & bar code to use at

machine


Channels add value (and cost) through a

series of generic activities (Checklist II)

Channel Function Example Activities

Physical Possession Storage, delivery

Ownership Inventory carry costs

Promotion Advertising, selling, PR

Negotiation Time, legal costs

Financing Credit, payment terms

Risking Warranty, insurance, repair

Ordering Order processing

Payment Collections, bad debt

Source:; Marketing Channels, Lou Stern, Ann Coughlan,

Erin Anderson, Adel El-Ansary, p. 74


Examples / cases

from your

experience ?

Marketing Flows In Channels

Source:; Marketing Channels, Lou Stern, Ann Coughlan,

Erin Anderson, Adel El-Ansary, p. 12


…. and in practice, channels

are dynamic and price

competitive with

disintermediation, vertical

integration, new entrants, etc.

In theory, channel

players get paid for

# flows and value of

flows …

Agenda

• What is GTM ?



• How measure ?

• How manage ?


Go-to-market strategy framework

addresses several questions

• What customers ?

– Segments & needs

• What work / activities ?

• How approach market ?

– What roles ?

– What channel partners ?

• What’s the best GTM strategy ?

• How to get it done ?


18

The following framework helps navigate key

design questions for a go-to-market strategy

Customer Universe

Customer Segmentation

Targeting / Reach

Sales Force Sizing

Role Definitions

Go-to-Market Strategy

What Customers? What Work? How Approach Market?

Staff by Whom? Deploy Where? Resource Deployment

Resourcing Options

Workload Capacity

Activities by Segment

Workload by Segment

Tactical Call Plan

• Direct / indirect

• Inside / outside

• Hunter / farmer

• FTE Capacity

• Force multiplier

Channel Segmentation

Effectiveness Profile

Selection / Reach


What customers ? Begin by segmenting and

targeting the customer universe

• Customer Universe

– Secondary data (D&B, list houses, etc.)

• Customer Research

– Expert input

– Secondary data (behavioral, socio-economic, firmographic)

– Primary Market Research

• Qualitative

• Quantitative

• Segment


Customer analysis yields distinct segments

and insights to what essential work


Illustrative Service Factors (scaled to 100 points)

Full

Service

Support

Intensive

Cost

Sensitive

Assurance of supply 9 8 11

Demos / Pilots 12 8 8

Solution/Integration 12 10 16

Installation 14 18 12

Rapid Service 17 31 10

Single point of contact 22 17 5

Lowest Price 14 8 38

Total 100 100 100

% Respondents 55% 13% 32%

In a similar fashion, potential channel

partners can be profiled and segmented


Illustrative

Data collection via RFI / RFP process, web profiling tools, and emarkets such as Ariba Sourcing

With foundation set and pieces defined,

proceed to make connections


GTM strategy begins by matching customer

needs with channel partner offerings ...

Channel

PartnersFull

Service

Support

Intensive

Cost

Sensitive

Direct Reps P P O

National Distributor [ [ P

Regional Dealer P P O

Service Network [ [ [

Web [ [ P

Call Center [ [ P

P = lead O = avoid [ = support

Customer Segments


Web Call Center Broker Platinum/Gold

Brokers

$ L

ife

tim

e V

alu

e

... while analytically, the GTM strategy must

optimize channel cost to serve and customer

opportunity for profit

Channel “cost of

sales” break-points

Illustrative --

Health Insurance

Example

Cost

Cost

Cost

Note: offerings

cumulative, not silo’d


Also, be pragmatic and look at the data

through many lenses Customer density

varies widely. What

is the impact to

channel design ?

Customer density

varies widely. What

is the impact to

channel design ?

Illustrative --

Medical products

example


Align channel partners and offerings with

customer segments

Potential Customers

Company

National Distributor (selected skus)

Full Service

Regional Dealers


Cost Service

Metro Metro

Direct Sales

Web / Call (selected services, skus) 1

3

4

2

Scenario analysis and optimization helps refine

channel design and guide resource decisions


Time Period: Jan'00 to Dec'00

Summary Variable:

Number of calls

Probability of Retention Decile

Potential Saved

Revenue Decile 1 2 3 4 5 6 7 8 9 10

1 3,757 3,290 3,644 3,481 3,606 3,366 1,727 2,504 3,298 5,205 33,878

2 4,780 4,197 4,402 4,226 4,578 3,705 1,493 1,943 2,128 2,427 33,879

3 4,753 4,592 4,811 4,789 5,078 3,386 1,591 1,636 1,673 1,570 33,879

4 5,013 4,941 5,010 5,400 4,932 3,121 1,694 1,325 1,260 1,183 33,879

5 5,353 5,427 5,305 5,445 4,711 3,004 1,692 974 981 986 33,878

6 5,643 5,821 5,402 5,190 4,408 3,302 1,554 881 852 826 33,879

7 3,347 3,692 3,414 3,061 2,755 2,468 1,202 595 597 471 21,602

8 to 10 1,232 1,919 1,891 2,287 3,810 11,527 22,926 24,021 23,090 21,210 113,913

33,878 33,879 33,879 33,879 33,878 33,879 33,879 33,879 33,879 33,878 338,787

Number of calls

1

4

7

10

1 2 3 4 5 6 7 8 to

10

-

5,000

10,000

15,000

20,000

25,000

Number of calls

Probability of Retention

Decile

Potential Saved Revenue Decile

Chart Type

Column

Surface

Chart Rotation

Print Sheet

Print Chart

Margin Potential

Revenue

Potential

# of

prospects

Variables at play:

segment_channel

reach, product,

resource intensity

Illustrative

For more on determining sales force size,

check out recent SMA webinar

www.salesmanagement.org/webinars/Sizing%20the%20Sales%20Force/player.html


http://www.salesmanagement.org/webinars/Sizing the Sales Force/player.html

http://www.salesmanagement.org/webinars/Sizing the Sales Force/player.html

Workshop Case

• Business-to-business product

• Segmentation Data

• Channel Resources

• Design channels


Agenda

• What is GTM ?



• How measure ?

• How manage ?


A classic framework to help measure

channel performance

31

Investment Activity Results

Efficiency

• Calls / AE

• Quotes / Employer

• Quotes / agency

• $ Sales & marketing / quote

• Sales reps

• Telesales

• Direct mail

• Advertising

• Channel Partners

• Clinical Network

Effectiveness

• Quote win rate

• New members / Employer

• New members / $ sales &

marketing

• Rep Calls

• Agency Calls

• Quotes

• New members

• New agencies

• Revenue

• Retention


Health Insurance

Example

Adapted from: Andris Zoltners, Kellogg Graduate School

of Management

Agency channels are efficient, but reduce visibility to

market potential. As a result, many insurers have blind

spots in the effectiveness of demand generation channels

32

Distn. Org

(Indirect)

Distn.

Org

(Direct)

Field Sales

Team

Channel Partners,

Agencies & Brokers

Members / Insureds

Pro

du

ct

Ris

k

Ma

rke

tin

g

Total Market Potential

Market potential sheds light

on channel efficiency and

effectiveness

Few agencies do most

production. Is there

sufficient investment ?

…but poor visibility to agency

wallet share, broker capacity

& mind share, and overall

agency effectiveness

Carriers have strong

visibility to quote, win and

sales results …


Health Insurance

Example

Key performance indicators can be tracked to monitor

channel performance

33


Agenda

• What is GTM ?



• How measure ?

• How manage ?


What “levers” do you have to manage (i.e.,

exert POWER) in the channel ?

Potential Customers

Company Products Services Costs Value Proposition

Service Output Demands

C

h

a

n

n

e

l

Channel

Channel

Cha

nnel

Channel


Sources of Power


Key Takeaways

• Anticipate & deliver customer needs (or your

competition will)

• Match channel capabilities to customer needs

• …align interests throughout channel

• Optimize cost of sales to profit potential

• Measure efficiency & effectiveness

• Manage through appropriate power levers

• Companies don’t compete, their demand

generation channels (and supply chains) compete


ABOUT AXTRIA



39

Proprietary Solutions

Better decisions and profitable growth from more effective processes

Analytical Services

Analytic innovation and cost-effective delivery of routine processes

• Data Management

• Reporting and Data Visualization

• Statistical and Predictive Modeling

• Decision Optimization

Core Competencies

Solutions and services based on multidisciplinary talent and decades of analytics consulting experience

Axtria is an advanced analytics company. Our global service team blends business consulting, analytics, and technology to help clients achieve profitable growth

Customer IQSM

Marketing IQSM

Risk IQSM

Marketing & Sales Pedigree

Analytics

Technology

Industry Knowledge

Channel IQSM

Sales IQSM


Axtria capabilities help clients answer three basic questions: “How much should we spend ?” “How best allocate that spend ?” and “How best to get it done ?”

Cu

sto

mer

An

alyt

ics

Decision Optimization

Data Management

Reporting and Data Visualization

Statistical and Predictive Modeling

Mar

keti

ng

Effe

ctiv

enes

s

Go

-to

-Mar

ket

Stra

tegy

Sale

s Fo

rce

Effe

ctiv

enes

s

Pri

cin

g A

nal

ytic

s

Fore

cast

ing

Cal

l Cen

ter

An

alyt

ics

Dis

trib

uti

on

Eff

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ven

ess

40 Copyright © 2011 Axtria, Inc. All Rights Reserved.

Copyright © 2011 Axtria, Inc. All Rights Reserved. 41

• Staff augmentation

• Data Strategy

• Data Provisioning

Decision Optimization

Data Management

Reporting and Data Visualization

Statistical and Predictive Modeling

Services Area

• Data Management and QC

• Exception reporting and management

• Commercial Reporting Framework

• KPI & Reporting Design

• Report Automation, Reporting Factories

• Dashboards & Drill downs

• Modeling Strategy

• Model Design, Testing and Validation

• Model Implementation and execution

• Periodic error attribution and refinement

Axtria capabilities encompass the full delivery stack, thus helping clients accelerate the journey from data-to-insight-to-decision

• Marketing & Sales Strategy

• Model Design, Testing and Validation

• Model Implementation and execution

• Scenario Planning & Executive Decision Support

Axtria


Several proprietary solutions address key leverage points in marketing, sales and distribution

Customer IQSM

Channel IQSM

Marketing IQSM

Sales IQSM

• Leverage channel partners to realize profitable growth opportunities

• Drive sales force efficiency & effectiveness for your sales organization

• Maximize customer profitability using customer lifetime value to guide acquisition, retention and growth strategies

• Increase ROI via marketing mix optimization and by targeting the right customers with the right marketing efforts across channels

Marketing & distribution involves a complex mix of stakeholders…

…we offer a set of solutions that drive growth by addressing key leverage points throughout the direct & indirect marketing and distribution model

Distn. Org

(Indirect)

Distn. Org

(Direct)

Field Sales Team

Channel Partners, retailers, outlets

Customers

Pro

du

ct

Ris

k

Mar

keti

ng

Total Market Potential

• Business planning & marketing mix optimization

• Line of business enablement

• Customer segmentation, valuation, targeting

• Sales Planning and Operations – Size, alignment, call/account plans, goals, incentive comp

• Information product R&D

• ROI analysis (sales, marketing program, etc.)

• Web analytics

– SEO, reco-engine, AdWord budget optimization

• Business process design & execution

• Business process outsourcing

• Campaign management

• CRM enablement and support

• Business intelligence & reporting (what happened & why ?)

– KPI Dashboards

• Data management

– Customer data management

– Data integration

Where can Axtria help ?

43 Copyright © 2011 Axtria, Inc. All Rights Reserved.

Labor intensive

work

High value add

Charlie Thompson

Principal, Axtria

• Charlie has 25 years experience in health care, financial services, and management consulting. He has a blend of marketing, financial and operating experience, especially in the development of technology and information intellectual property to find, win, keep and grow profitable customers.

• As a founding Principal with Axtria, Charlie is building a world-class portfolio of people, processes and tools to help clients bridge the gap between data and insight. Most recently, Charlie was Principal with marketRx, a technology and consulting company focused on the life sciences industry. Venture-backed by Sequoia Capital, marketRx grew to 500 professionals, earned spot #195 on Inc.500 and Entrepreneur Magazine’s “Hot 100”. In 2007, the firm was acquired by Cognizant Technologies at significant shareholder returns.

• Prior to marketRx, Charlie was a management consultant with TowersPerrin, ZS Associates, and NDCHealth helping Fortune 1000 firms accelerate profitable growth. As part of Fortis’ insurance organization (Assurant), he launched a new department to support direct marketing operations (15,000 campaign executions, 521 clients, 1.65 billion consumer contacts over 5 years) through consumer analysis, research and predictive modeling.

• Charlie attended Princeton University earning a degree in History. Further, he graduated from the J.L. Kellogg Graduate School of Management at Northwestern University with majors in Finance and Marketing, and was selected Top Marketing Student by faculty. He is holder of patent # 7,050,566, for the application of predictive models in customer call centers.


Charlie Thompson0

Thank You.

Documents

Go To Market Strategy: Practical Approaches to Design ...€¦ · • Marketing Strategy involves WHO you will go after and WHAT you will offer them. • Go-to-market (“GTM”)