In this edition of Outside In, we cover a topic of interest for B2B Companies – How to develop a structured GTM Approach. And this GTM series piece does not come from my own experience but from (Ex) Atlassian Product Manager Caroline Clark. Noted below are some of the best practices they adopted for shaping their GTM (Atlassian is a Software Product company for Software Developers, Project Managers and Software Development Teams) – focused on the B2B ‘Customer’ – and is meant to be an open source deck for everyone. It is a good read indeed…
The Basics
First things first, the product has to be great. It’s miserable trying to sell or market a product that isn’t useful. (Product) GTM Strategy is like building Legos that form a whole. Companies will need to figure out quite a few internal questions in order to get quality answers
The 3 Main Variables of GTM Strategy
1. Who is the ideal/target customer?
2. How are we going to reach them?
3. How are we going to scale?
1) Who is the ideal/target customer? – Build a Buyer Persona
All sales start with a ‘buyer’ – whether it is bottoms up or high touch sale. To know the buyer better, it is important to develop buyer ‘personas’ as they can help figure out who (and what) matters – and help prioritize time (and efforts) accordingly. For example, it would be Infrastructure professionals for Snowflake, Designers for Figma and Developers for Atlassian
The key questions to ask about this buyer persona and know them better are:
Job title – What is their title?
Stage of company – How mature is their company?
Daily activities – What do they do? What do they care about?
Pain points – What is hard about their job?
Willingness to pay (WTP) – Do they want to spend money?
Things to watch out for – How influential is this role?
Carve Out Buyer Personas (Illustrative):
The method to achieve this would be a mix of Primary (Customer Interviews, Panels) and Secondary (Competition) Research – and a mix of Qualitative and Quantitative (Surveys, Lead Data).
2. How are we going to reach them? – Map the Acquisition Channels
In an ideal world, companies only rely on a flywheel model of growth – in other words, organic wheels with “low touch sales models.” But almost all companies, including Atlassian, have multiple acquisition channels as the company matures
Example of Acquisition Channels by Front (A Customer Communication Software Company)
3. How are we going to scale? – Chart out Pricing, Payments, LTV/CAC, Market Size
Scale can mean a lot of things, but in a GTM context, it’s thinking about efficiency with each net new customer
Efficiency can be driven by a lot of things. It’s an output of payment models (and by extension, pricing), costs of acquiring customers (which acquisition feeds into)
In fancier terms, this is the “lifetime value” (LTV) and “customer acquisition costs” (CAC)
a) Check the Strategy Analysis of the top 50 companies in the 2020 Forbes Cloud 100 –
b) The core elements of Pricing are –
c) Determining the Pricing Level –
Additional Reading:
Westendrop Pricing: https://en.wikipedia.org/wiki/Van_Westendorp%27s_Price_Sensitivity_Meter
Gabor-Granger Pricing: https://en.wikipedia.org/wiki/Gabor%E2%80%93Granger_method
d) Tracking CAC, LTV and their Ratio
e) Mapping the Market Size
Once a company determines their payment model, pricing and target customers – it can calculate the total (addressable) market size: Take Price per Year x Total Target Companies
In Summary – The Atlassian GTM Strategy –
1. Invest in the Product, and build something Customers love
2. Define the ideal Buyer Persona and Ideal Customer Persona (ICP)
3. Come up with a Customer Acquisition Strategy & design a (Growth) Flywheel
4. Determine the Payment Model
5. Drive towards Efficiency
For additional reading on the Atlassian $20 Bn Flywheel, check this rich piece:
In Conclusion
Final thoughts on the 2 most important variables in the GTM Approach –
1) On Buyer Personas: Without this information, outbound or paid acquisition cannot be successful. – Mathilde Collin, Front
2) Good pricing is not (only) about the price. It’s about getting in each customer’s shoes and knowing exactly how they derive value from your product. – Ian Clark, Pricing Consultant @ YC, Signal Fire, & Alpine Investors
References and Sources
1) GTM Nirvana – Presentation by Caroline Clark (@carolinedclark)
2) Atlassian Flywheel: https://www.intercom.com/blog/podcasts/scale-how-atlassian-built-a-20-billion-dollar-company-with-no-sales-team/
3) Westendrop Pricing: https://en.wikipedia.org/wiki/Van_Westendorp%27s_Price_Sensitivity_Meter
4) Gabor-Granger Pricing: https://en.wikipedia.org/wiki/Gabor%E2%80%93Granger_method