Setting Realistic Go-to-Market (GTM) Revenue Targets for Year One

Go-to-market (GTM) strategies are a blend of aspiration and reality. Balancing these ideas challenges businesses to create a road map for success—a guide to how they’ll generate interest in their products and services and what support they’ll need to achieve this. 

With a well-defined GTM strategy that accounts for all stakeholders and builds a scalable plan, your revenue targets can be more accurate and realistic. Read on to find out how.

What Is a Go-to-Market Strategy?

Although any company can benefit from a solid GTM strategy, only some businesses truly take advantage of them. A Product Marketing Alliance report found that 61.9 percent of companies create a GTM plan, but only 33.3 percent use a systematic approach.

At their core, GTM initiatives create a framework for understanding how and why a product will debut, making them a pillar of any product launch. Here are the steps involved in creating a solid GTM strategy:

• Identifying your target audience
• Specifying how the product or service meets a need in the market
• Setting budgets
• Outlining how sales and marketing will create awareness, interest, and conversions
• Ensuring alignment across the enterprise
• Defining customer and product journeys

Once you follow these steps and define your marketing and sales goals, the go-to-market plan should tell the story about your brand, customers, and industry. It also works as a predictive tool for performance based on:

• Existing data you have relating to GTM
• Internal knowledge on the market and audience
• Historical examples from product launches
  
  

Go-to-Market Strategy Benefits

Too often, companies gear up for product launches with lofty ideas and hopes that turn out to be skewed expectations. A go-to-market strategy grounds your product launch in reality. You can realize the following benefits by building a plan based on objective data and substantiated assumptions.

Everyone Is on the Same Page

When you create and follow a go-to-market plan, you ensure alignment among all stakeholders. Failure to create this alignment can cause friction and stunt success. Each role has something to contribute, and the people in those roles need clear paths to follow.

Also, a universal strategy reflecting the input of all stakeholders gives everyone the same view of the product lifecycle. No one has to guess about how to get the product to market—it’s all there in your document.

You Validate Product-Market Fit 

A GTM plan involves crafting the ideal customer profile and identifying a specific need your product meets. Mapping this out will save you from making critical errors or overlooking factors that can impact meeting revenue goals.

You Address and Manage Revenue Expectations 

Everyone wants to aim high with revenue goals during a new product or service’s first year. But you can’t guarantee that sales will accelerate quickly for anything new or disruptive, and GTM revenue goals shouldn’t be numbers pulled from thin air. 

Often, finance hands down revenue goals based on the available data. However, these goals frequently don’t consider how your go-to-market model will acquire, retain, and grow customer revenue.

Instead, you want to address and manage revenue expectations by:

• Understanding the number of leads sales needs to meet conversion requirements
• Defining key performance indicators (KPIs)
• Using a bottom-up approach that accounts for the time, activities, resources, and investments necessary

Your go-to-market strategy must include a realistic revenue goal. Many factors influence the ability to meet the goal. With a practical perspective, you can be specific about what you need to reach it.

Creating a Go-to-Market Plan

Every product you launch will have a unique GTM strategy, but following these foundational steps each time will empower your team to set a plan for success:

• Flesh out buyer personas and envision a customer journey: Before you enter the market, you must know your audience well. Even if a new launch’s target customers are the same as current ones, their motivations and needs will differ based on the product or service.
• Define the product’s value proposition: This definition should be concise and benefit-driven, answering the question, “What problem does this solve?”
• Connect marketing to sales: Your GTM plan will include sales goals. To reach these goals, you’ll need to achieve sales and marketing alignment. Calculate the marketing activities that should provide the number of leads sales needs to close to generate the expected revenue.
• Craft a channel strategy: Identify the channels in which you’ll sell the product or service. Considerations should include distribution, promotion, and tactics.
• Consider competition and demand: Look at what businesses offer products or services similar to the one you’re launching. If you identify their market shares and gaps, you can capitalize on that information to strengthen your own launch—plus, you’ll get a better idea of the existing demand for what you’re selling.

How to Establish Reasonable Revenue Targets for Your GTM Strategy

You can’t predict the future, but a revenue target that includes the above considerations is much more than a guess.

Often, revenue projections are vague or based solely on historical performance. Developing a solid GTM strategy brings clarity and transparency to the projection process. If you’ve designed a strategy that is data-rich and well-researched and uses bottom-up approaches, you can feel more confident in the target. The more insights you gain, the closer to reality the numbers will be.

A few other things factor into this goal. First is the difference between an industry-disrupting product going to market versus something completely new. A disruptive product seeks to pull customers away from competitors, and there’s more existing data to reference when making an educated estimate. A new product doesn’t have the benefit of these points of comparison. However, you can still incorporate data and knowledge about the product fit.

A bottom-up approach to setting GTM revenue goals considers how much budget you need to gain customers. You can estimate the customer acquisition cost and measure that number against what you can invest. Other considerations that GTM teams should discuss include:

• The product or service price point
• The length of the buying cycle (the longer the cycle, the slower you’ll be to realize revenue)
• Current and future investment in promotion, marketing, and sales
• How prospects move into the sales funnel with expected marketing qualified leads (MQLs), sales qualified leads (SQLs), opportunities, and conversions
• The amount of leads a sales team can handle (smaller teams can’t manage vast numbers of prospects)
• Ramp-up periods for marketing and sales

You should also devise a few scenarios to get your GTM strategy agile. What if you add more budget here? Or increase the number of sellers? You don’t want the what-ifs to spiral, but adjusting leading factors gives you a path to realistic revenue targets.

Give Your Product Launch Its Best Change to Reach GTM Revenue Targets

Product launches are complex projects with many elements to consider and voices to listen to. Not hitting revenue targets has become the norm rather than the exception. It doesn’t have to be that way!

If you’re looking for more guidance for your next product launch, check out our Product Launch Marketing Plan blueprint. This template maps out each step of a launch to help you develop a more confident go-to-market strategy and identify the right revenue target.