Go To Market Strategy: Practical Approaches to Design ...€¦ · • Marketing Strategy involves...
Transcript of Go To Market Strategy: Practical Approaches to Design ...€¦ · • Marketing Strategy involves...
© Copyright 2011 The Sales Management Association
September 7, 2011
September 7, 2011
Presented by:
Charlie Thompson
Axtria, Inc.
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
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 ?
Slide 3 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Designing GTM strategy is a bit like Tetris.
Connecting your firm …
…with your desired customers
Slide 4 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 5 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Sources: Kellogg on Marketing, Dawn Iacobucci, ed, Lou
Stern, Ann Coughlan pp 247-269
Welcome to Atlanta, let’s talk
about Coca-Cola
Slide 6 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Channel case exercise
Slide 7 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Warehouse Grocery Convenience Vending Fountain
Characteristics of Each Channel
Agenda
• What is GTM ?
• What’s the theory ?
• How design GTM strategy ?
• How measure ?
• How manage ?
Slide 8 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 9 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 10 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 11 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 12 Copyright © 2011 Axtria, Inc. All Rights Reserved.
‘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
Slide 13 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 14 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Examples / cases
from your
experience ?
Marketing Flows In Channels
Source:; Marketing Channels, Lou Stern, Ann Coughlan,
Erin Anderson, Adel El-Ansary, p. 12
Slide 15 Copyright © 2011 Axtria, Inc. All Rights Reserved.
…. 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 ?
• What’s the theory ?
• How design GTM strategy ?
• How measure ?
• How manage ?
Slide 16 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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 ?
Slide 17 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 18 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 19 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Customer analysis yields distinct segments
and insights to what essential work
Slide 20 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 21 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 22 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 23 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 24 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 25 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Align channel partners and offerings with
customer segments
Potential Customers
Company
National Distributor (selected skus)
Full Service
Regional Dealers
Slide 26 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 27 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 28 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Workshop Case
• Business-to-business product
• Segmentation Data
• Channel Resources
• Design channels
Slide 29 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Agenda
• What is GTM ?
• What’s the theory ?
• How design GTM strategy ?
• How measure ?
• How manage ?
Slide 30 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 31 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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 …
Slide 32 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Health Insurance
Example
Key performance indicators can be tracked to monitor
channel performance
33
Slide 33 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Agenda
• What is GTM ?
• What’s the theory ?
• How design GTM strategy ?
• How measure ?
• How manage ?
Slide 34 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 35 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Sources of Power
Slide 36 Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Slide 37 Copyright © 2011 Axtria, Inc. All Rights Reserved.
ABOUT AXTRIA
Slide 38 Copyright © 2011 Axtria, Inc. All Rights Reserved.
Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
Copyright © 2011 Axtria, Inc. All Rights Reserved.
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
ecti
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
Copyright © 2011 Axtria, Inc. All Rights Reserved. 42
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.
Copyright © 2011 Axtria, Inc. All Rights Reserved. 44
Charlie Thompson0
Thank You.