Core Strategies: Strategic Insights For Growth

The Routes to Market (RTM) Channel Advantage Workshop is not separate and distinct from your go-to-market (GTM) strategies -- it is integral to them. The RTM methodology combines both qualitative and quantitative tools to provide a strong foundation for more effective GTM plans. GTM outcomes can include a joint business plan with executable action items looking 30, 60 and 90 days out. RTM is about leverage. By utilizing the RTM methodology and toolset, partners going to market jointly can cover more opportunities faster, and generate more leads with greater profitability.

The RTM workshop progress through a set of components and exercises that have been used and tested with over 400 companies in the Americas and EMEA. Across the board, participants have said that the RTM has brought them incremental revenue and profits though sound planning and execution.

Here's just one example of the feedback we've received from Larry Cornell, Managing Director of MTS Delft, a Solution Provider and HP partner:

"I would like to thank you for the best seminar and workshop we have ever attended. You are true professionals. You have accomplished in one day, what we have been working on for years. We now have a clear vision of where we are going and what it will take to get there. In addition, you have put together a new team with a common goal. We now look at HP, Arrow, our Distributor, as colleagues, friends and team members. We look forward to working with our new friends to carry out the tasks set forth in the workshop."

Below are the steps we use to help you help your partners.

I. OBJECTIVES

The RTM workshop starts by defining both individual and joint business objectives for all participating companies. These span from tactical objectives like year-one, year-two revenue to strategic objectives like market share, growth or segment penetration.

II. MARKETPLACE

Once objectives are specified, the opportunity must then be understood. Opportunity comprises your installed customer base and all prospects - i.e. TOTAL opportunity and addressable opportunity.

RTM workshops require the fundamental elements of market management as its initial inputs. This means understanding who your customers are, and segmenting them appropriately. These segments should be prioritized so that we can target those segments that are: a) most attractive based on revenue potential, growth and profitability and b) most exploitable based on the strengths of your offering/s, market share, and skills and capabilities of internal and external resources. Current and future exploitability should be considered by gauging where your competitors will be in the next three years.

III. SOLUTION STACK

A solution is everything that a customer buys to solve a business problem. The offering (hardware, software, and services) consists of the elements that each company contributes to a solution stack. It is critical that solutions are channel ready so that we can exploit our channels of choice to take these offerings to market. We must also ensure that we jointly approach the market with offerings that are integral to a solution that solves a customer problem.

IV. DECISION MAKING PROCESS

We must understand what are the compelling reasons that a customer buys our products and the total solution; who in the customer's organization makes the decision and who are the internal and external influencers. We must also assess the current GTM models that each company has invested in (i.e. their sales force, business partners, telesales, web reach, etc).

V. SWOT

What are the strengths and weaknesses of your offering and the opportunities and threats posed by the marketplace? The idea is to align your strengths to the opportunities, and create action items that help covert weaknesses into strengths.

VI. BUYER BEHAVIOR

How does a customer buy your solution and what is their decision making process? Customers buy products or services in the IT industry in one of three ways

One of a kind - where a solution is specifically designed for a customer environment according to their requirements.
Mass customized - where we add and delete services and customize our offering to meet customer needs. We may sell the same services in varying configurations to meet the needs of different customer sets. The key is that they are repeatable, replicable solutions that are created to go to market more efficiently.
Off the rack - where all customers buy exactly the same products or services and there is no individual customization.

Note: customer-buying behavior is dynamic. A customer, for example, can demonstrate one or more of these buying behaviors while purchasing different products/offerings.

VII. LIFE CYCLE

Where is your offering in terms of its life cycle and in relation to the state of the marketplace? There are four discrete phases in the life cycle of products.
Introduction phase - at this point the products/offerings may not even have been fully tested. Customers in this phase tend to be on the leading edge and are technology focused. (Key driver: technology products)
Solution/Growth phase - your offering needs to be packaged into an overall solution that the customer is seeking. We still need to create demand for the product and build references. Customers in this phase tend to be seeking competitive edge and are willing to take risks. (Key driver: business to business marketing)
Distribution/Maturity phase - the product is now well accepted. There is demand, and your challenge is to provide adequate resources and engage the channels of distribution appropriate to our customers. (Key driver: Channel and capacity)
Commodity phase - end users are buying your product/offering. We are selling in large volume but are lowering our margins significantly. Obsolescence could be just around the corner. (Key driver: end user marketing)
Note: All products do not go through all four stages of the life cycle. If the market is in a different phase from that of our offering, we need to outpace the marketplace and our competition in order to become a market leader.

VIII. QUALITATIVE RTM TOOL - RESOURCE EVALUATION

After we have defined the objectives, understood the target segments, defined your offering and solution stack, identified the life cycle phase and evaluated your strengths and weaknesses - the RTM workshop is ready to engage the Resource Evaluation Matrix. The goal of the resource evaluation tool is to match resources and activities to the key stages of the sales cycle in order to map the optimal route.

Routes to Market recognizes five stages in the sales cycle:

Demand Generation - create awareness and interest through advertising, direct mail, electronic channels, etc. Generating quality leads and tracking them is particularly important at this stage.
Presales - is where we configure the system, respond to RFPs, handle demonstrations, trials, proof of concept, benchmarking.
Closing the deal - sellers receive the order, and sign contracts after completing final negotiations.
Deployment - process contracts, fulfill orders, deploy services and implement solution. This is the 'perform' stage which also includes education, training, integration, project management and business process reengineering.
Support - the last stage of the sales cycle is focused on post-sale technical and marketing support, customer care and building an ongoing relationship with the customer.

Workshop participants use the insights gathered in market assessment phase of the workshop to answer a series of questions about the marketplace, the offering and the solution. The tool then scores sales resources across the stages of the sales cycle in order to determine select optimal routes to market. A route consists of the most efficient mix of resources that can be deployed (across all parties) through the five stages of the sales cycle. Different resources engaged at various stages of the sales cycle work seamlessly to raise GTM efficiency and profitability.

IX. QUANTITATIVE RTM TOOL - FINANCIALS

Once the optimal path to market has been identified, the RTM workshop shifts to the financial tool in order to determine the viability and profitably of the selected routes. Inputs from each company should include:

Revenue goals
Targeted gross profit
Costs and productivity (quota) of our different resources
Expenses associated with various lead generation activities
Expenses pertaining to go-to-market partners
Average transaction size
Lead to close ratios

Based on these inputs, the financial tool then calculates how many resources are needed to meet revenue targets; what resource commitments are required from supporting partners and functions; and how much is needed to invest in lead generation activities. The tool also allows for 'what-if' analysis so that we can measure profit margins across all stakeholders against different scenarios.

X. ACTION

The outputs of the RTM tool-set help support a viable, executable plan that is agreed to by all stakeholders that support our go-to-market plans. A detailed action plan is created, line item ownership assigned and delivery dates specified. Supporting functions and joint go-to-market partners can be held accountable as expectations are clear and funding is linked to effectiveness. The RTM outputs should be revisited on a regular basis in order to determine divergence from plan and evaluate resource effectiveness according to agreed upon milestones. Often, this action list can become your management system to track progress.

XI. CONCLUSION

The Routes to Market methodology and tool-set assist you in developing robust joint go-to-market plans, while developing and managing the corresponding financial and business goals. RTM creates leverage for all parties by enabling joint partners to cover more opportunities faster, and generating more leads with greater profitably. Distributors, Solution Providers, System Integrators, ISV's, Resellers and Alliance Partners across the world have used the RTM tools better leverage joint resources when working with their partners.

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