Over the years, several go-to-market (GTM) strategies have emerged and evolved for B2B technology companies, each with its strengths and weaknesses. In this article, we'll explore the evolution from traditional sales-led approaches to more modern marketing-led and product-led.
Remember the good old days when companies would prioritize building personal relationships with customers to close deals and drive revenue growth? While this approach worked for a while and still does for some, it's becoming less effective as customers self-serve information more and more, and competition increases.
That's where marketing-led approaches come into play. By creating engaging and informative content that speaks to the needs and interests of their target audience, companies can build brand awareness and generate leads that are more likely to convert into customers.
The newest addition to the GTM strategy family is product-led growth (PLG). It focuses on delivering an exceptional product experience that encourages customers to become advocates for the brand. PLG is perfect for software and technology companies prioritizing user experience and product functionality.
Personally, I love PLG because it allows customers to try before they buy. Doing this builds trust and loyalty, making it more likely they become long-term customers. But regardless of your current GTM strategy, you can employ multiple strategies simultaneously or shift from one to another over time.
For example, a company may start with a sales-led approach to drive early revenue and build customer relationships, then adjust to marketing-led or product-led to drive long-term growth and customer loyalty.
Here is a summary of these three GTM strategies:
For many years, sales-led go-to-market strategies were the dominant approach for driving growth and success in business. In a sales-led approach, businesses prioritize direct selling and relationship-building with customers, relying on sales teams and distribution channels to drive revenue growth.
This approach is common in B2B industries where building personal customer relationships is essential to closing deals and generating revenue. However, in recent years, sales-led strategies have become less effective for many companies as customers have become empowered to research and buy before talking to sales, and as competition has increased.
This approach uses sales tactics to generate interest in the product or service, which include cold calling, direct mail, and personalized sales pitches, and is best for products or services with a proven track record and clear value proposition.
- Can be effective for high-ticket, complex, or customizable products or services
- Helps to build relationships and trust with customers through personal interactions
- Can be adaptable to different customer needs and buying preferences
- Can be expensive and time-consuming to execute, especially for large or global markets
- Can be challenging to scale or replicate across different sales channels or territories
- May not be effective for products or services with shorter sales cycles or simpler purchasing processes
Examples of businesses that are sales-led:
IBM's sales strategy focuses on building relationships with key decision-makers and influencers in target industries. By leveraging its extensive network of sales reps and partners, IBM can effectively communicate the value of its products and services to potential customers and drive sales.
Oracle's sales strategy centers on targeted account-based marketing and personalized sales pitches to win over large enterprise customers. By tailoring its messaging and offerings to specific customer needs, Oracle can demonstrate its value proposition and close more deals.
Salesforce, ServiceNow, and Oracle are among the most popular - and successful - examples of sales-led companies.
In response to the decline of sales-led go-to-market strategies, many companies have shifted towards being marketing-led. In a marketing-led approach, companies prioritize creating demand through marketing and advertising initiatives, such as social media campaigns, content marketing, and email marketing.
This approach is particularly effective in industries where customers have access to vast amounts of information and are more likely to research products and services before making a purchase decision. By creating engaging and informative content that speaks to the needs and interests of their target audience, companies can build brand awareness and generate leads that are more likely to convert into customers.
- Can generate leads and build brand awareness at scale through digital channels and content marketing
- Can be cost-effective and efficient, especially for companies with limited resources or budgets
- Can provide valuable data and insights about customer behavior and preferences
- May struggle to build strong relationships with customers compared to sales-led or product-led approaches
- May require a longer time to see a return on investment (ROI) compared to sales-led or product-led approaches
- May face challenges in standing out among the noise of competitors and oversaturated digital marketing channels
Examples of businesses that are marketing-led:
HubSpot is an inbound marketing and sales platform that provides various tools and services to help businesses attract, engage, and delight customers. They are known for their commitment to creating valuable content, such as blog posts, e-books, and webinars, that resonate with their audience and drive leads.
Ahrefs is a marketing and SEO toolset that helps businesses optimize their online presence and improve search engine rankings. They have built a reputation for creating in-depth blog posts, guides, and tutorials that provide value to their target audience, establish them as a thought leader in the industry, and ultimately drive leads and sales.
HubSpot's thought leadership content + good SEO = 5.7M in monthly organic search traffic.
More recently, product-led go-to-market strategies have emerged as a new approach for driving growth and success in business. Product-led companies prioritize delivering an exceptional product experience that encourages customers to become advocates and evangelists for the brand.
This approach is particularly effective in industries where customers value user experience and product functionality, such as software and technology. By creating an easy-to-use, intuitive product that solves a real problem for its target audience, companies can build a loyal customer base that drives growth through word-of-mouth marketing and referrals.
This go-to-market strategy focuses on building a great product that sells itself and often involves investing heavily in product development, user experience, and customer support.
- Can leverage the product itself as a marketing and sales tool through free trials, freemium models, or product demos
- Can generate word-of-mouth marketing and customer referrals through an exceptional product experience
- Can foster strong customer loyalty and retention through a focus on product innovation and user experience
- May require significant investment in product development and user experience design
- May struggle to gain traction in competitive or saturated markets without strong product differentiation or innovation
- May face challenges in reaching and engaging new customers beyond the initial product experience
Examples of businesses that are product-led:
Slack's product-led growth strategy centers on creating an intuitive, user-friendly product that drives adoption and virality. By offering a free version of the product that users can try out, Slack can attract new customers and grow its user base without significant marketing or sales efforts.
Zoom's product-led growth strategy focuses on building a high-quality, reliable video conferencing product that’s easy to use and delivers a great user experience. By offering a free version of the product and promoting it through word-of-mouth, adoption and growth are achieved without significant marketing or sales efforts.
According to Gartner, by 2025, 75% of SaaS providers will apply product-led growth techniques to drive existing customer growth and expansion.
Other GTM Strategies
While sales-, marketing-, and product-led are among the most common and widely recognized approaches, it's worth noting that there are other strategies that B2B technology companies may use depending on their specific goals and circumstances.
For example, some businesses may use a customer-led approach that focuses on understanding the needs and preferences of customers and tailoring products and services accordingly. Others may adopt a channel-led approach that prioritizes partnerships and distribution channels to reach new customers and expand market reach.
As the world of business continues to evolve, so must go-to-market strategies. Sales-led approaches, which were once dominant, have become less effective, and companies have shifted towards marketing-led and product-led to drive growth and success.
Of course, each approach has its strengths and weaknesses. Ultimately, the best go-to-market strategy or combination for a given business will depend on many factors, including the company's goals, target market, competitive landscape, and available resources.