What Is a SaaS Go-to-Market Strategy?
A go-to-market (GtM) strategy is how companies — not just SaaS businesses — plan to reach their target consumers and also establish a unique competitive marketplace advantage. Interestingly, it’s not often the companies themselves deciding how to target their ideal customers but the customers themselves who create trends and preferences that SaaS companies must identify, react to, and adapt their plans for (more on that shortly).
GtM strategies are nothing new. SaaS companies have developed and refined countless GtM strategies to reach the customers they need to reach and carve out their unique industry position. For example, two such strategies have historically been sales-led and marketing-led.
In a sales-led GtM strategy, all customer growth is handled by a sales team. This is a very high touch method that has its uses, but as you can imagine, the sales cycle can be long (though it can lead to high lifetime value customers) and the overall customer acquisition cost can quickly get astronomical due to time, administrative costs, and so on. For larger or older SaaS companies in an extremely specific niche, this can be a functioning model. But for younger SaaS companies that don’t have the luxury of time or resources, it’s not the best.
In a marketing-led GtM strategy, the sales team is still involved, but only after the marketing team has delivered them a marketing qualified lead (MQL). Unfortunately, many marketing teams create tactics that steer prospects away from becoming customers or result in MQLs that simply aren’t ready to buy, which frustrates sales and costs the company time and money in doing pretty much nothing. Sure, it’ll help fill up the top of the funnel, but it won’t result in much else.
Consider a Product-Led GtM Strategy Instead
A final GtM strategy that’s worth your consideration is the product-led variation. Whereas sales-led relies on people and marketing-led relies on tactics to sell the platform, a product-led GtM strategy relies on the SaaS platform itself to sell it to customers. Yes, this means giving people free access to the platform ahead of time — or at the very least, a free trial. How is this beneficial to a young SaaS company that needs revenue?
First, it allows your prospects and users to self-educate. You don’t need sales, account reps, or other trainers to do it for you and cost you money at the same time. Your time needs to be spent building the platform, identifying new areas to grow, marketing the product, and improving customer experiences.
Second (and closely connected to the first) is the fact that product-led lowers your CAC. Less staff involved means less overhead because the product you’ve already built is doing the work for you. Additionally, by allowing people into the platform, you’ve become a wide-open funnel that’s constantly taking in new leads — all on its own.
Customers in the platform that want to take the next step logically determine that if they want the software, they must upgrade and start paying (no sales team needed for that). And by building your product to allow customers to onboard themselves, you’re creating a better user experience with fewer support requests.
So, Why Go in Debt Just to Give Your Platform Away?
Just because you’re following a product-led GtM strategy doesn’t mean that marketing and sales should cease. Customer acquisition will simply be managed primarily by the product, which marketing and sales will help to support. On the marketing side, consider investing resources toward drawing people to the platform to convert on the free trial or free level of access. On the sales side consider selling business-specific features to B2B clients, developing partnerships, attending trade shows (surprisingly a great SaaS lead generator), and more.
And venture debt financing can serve as the foundation for all these efforts, helping you to fund marketing initiatives and staff more experienced sales professionals who can focus on higher-order customer acquisition. But these are just a few examples. We’d love to discuss how debt can help you prioritize certain tasks over others, synergistically creating a growth engine that delivers more leads, more revenue, and ultimately greater success. Fill out the form below, and we’ll be in touch right away!