Effective go‑to‑market programs revolve around two objectives: 1.) orchestrating customer engagement and 2.) driving (sustainable) lift to income.
When done correctly, go‑to‑market programs enable brand momentum and deliver long-term growth — maximizing customer lifetime value. “It’s not a purchase you’re after — it’s a lasting customer relationship,” explains Forrester analyst Craig Moore.
Thus, spending on go‑to‑market should be viewed as an investment — one with a longer-term, ongoing return — instead of a current-period, linear cost. The objective is to build a scalable engine, not simply to run a short-term ‘campaign.’
The Short-term Mindset
Yet for far too many organizations, there is not a clear, sustainable, longer-term vision for their go‑to‑market strategy. They associate go-to-market with short-term, transactional behavior — i.e., driving immediate sales — and they view marketing and sales spending as an expense, not as an investment.
These go‑to‑market leaders are looking for a quick win — for rapid growth — and this translates into an approach — and a mind-set — that is inherently short-term.
This “short-term mindset” leads to two negative behaviors:
- Random acts of sales and marketing: These organizations engage in “random acts” of sales and marketing — failing to build a sustainable program. And unfortunately, it is the accumulation of these random, disconnected acts that eventually ‘becomes’ their go‑to‑market program.
- Under-funding go‑to‑market: These organizations also fail to sufficiently fund their sales and marketing activities — starving their go-to-market programs of critical investments.
Short-term-minded CFOs and CMOs defend their short-sightedness by positioning their go‑to‑market organization as being “agile” or deploying programs designed to “fail fast.” And they proudly wear a “do more with less” badge of honor. They believe their approach makes sense – which amounts to essentially a ‘pay-as-you-go’ go-to-market. Yet this short-term mindset has an ultimate price, with both strategic and quantitative implications.
Strategic Challenges of a Short-term Mindset
The short-term mindset is problematic both for go‑to‑market teams and for their customers.
- Wasted customer interactions: The most precious commodity of go‑to‑market is customer interactions. They are the substrate of conversion. Unfortunately, the random acts of a short-term mindset result in multiple, repeated, wasted customer interactions. These include repeatedly hitting customers at the wrong stage, while failing to engage at the right stage; leading with broad, un-targeted offers; engaging, but failing to follow up and nurture the relationship. Non-substantive interruption is the hallmark of the short-term mindset, and it has diminishing returns on our customer relationships.
- GTM team burnout: Engaging one-off, without any sense of continuity or customer journey results in longer-term creative burn-out of go‑to‑market staff. Literally, the need for constant re-invention of campaigns eventually leads to running out of ideas for what to say and how to engage. This is not only a challenge for marketers, but also for sellers.
- Perpetual underperformance: By constantly re-inventing new campaigns, we introduce numerous variables into campaign elements — so much so that each net-new campaign is actually different from the previous one. The opportunity to optimize campaigns in this context is close to zero. The result is constantly mediocre performance with only slight improvement over time.
Quantitative Challenges of Short-term Mindset
The short-term mindset is problematic in its low return on investment. In many ways it operates like a treadmill with no significant ramp in go‑to‑market financial performance over time.
Below is a simple, three-year model for a B2B software company with a $125K ACV. On one hand it looks at the short-term mindset via a classic ‘campaign’ approach — deploying a net-new campaign each quarter of the year, together with all of the (never-ending) costs of content, creative, production and analysis to run these campaigns. On the other hand, it compares this to the performance of what we refer to at ANNUITAS as a Perpetual Growth Engine approach (explained further in the “Making the Shift to a ‘Long-term’ Go‑to‑market Mindset” section below). This approach invests in and builds an ‘engine’ up front, running and optimizing it over time — driving continuous improvement in performance.
This model holds most costs constant across the two approaches (e.g., it doesn’t analyze headcount costs), but it does compare ongoing program investment and engagement channel spend against performance. The difference in performance levels and ramp are based on benchmarks we typically see at ANNUITAS.
What becomes immediately clear is that the short-term mindset costs more and significantly limits the ROI of go‑to‑market programs longer-term.
Some key observations on this model:
- Costs to deploy a Perpetual Growth Engine are heavier in the first 6-12 months than for a typical quarterly campaign, but after the initial investment, the annual operating cost is lower than with periodic campaigns.
- The time and energy to build out the Perpetual Growth Engine requires a more robust up-front strategy phase (and often requires third-party support); however, this process identifies and leverages deeper insights about customer journey and segmentation that are critical to operationalizing go‑to‑market programs. By comparison, strategy for each quarterly campaign is much less rigorous and likely leaves fundamental gaps for the go-to-market organization around their understanding of customer journey and segmentation.
- Because it is a repeatable (and optimizable) process, the Perpetual Growth Engine is constantly (and significantly) improving over time, which enables reaching performance levels not possible in ‘hit-or-miss’ quarterly campaigning.
- One factor in the continuous improvement of the Perpetual Growth Engine is the development and growth of a ‘Nurture’ base — i.e., a base of contacts that are mid-journey, that you are actively Nurturing and developing — which results in less engagement waste. By comparison, quarterly campaigns — operating in a disconnected state — tend to either connect or not with prospects, but they carry limited prospect-interaction value into future campaigns.
- The quality of prospects that sellers engage with in the Perpetual Growth Engine is much higher — typically with sustained engagement and clear intent — whereas prospects from a quarterly campaign are too often merely ‘respondents,’ who may or may not have any real knowledge of the brand or true buying intent.
The net result?
- Significantly higher ROI for go‑to‑market of the Perpetual Growth Engine approach: After three years, the performance of the Perpetual Growth Engine is 4X that of traditional quarterly campaigning, which also means that the cost of acquisition is much lower — 3.88% of ACV vs. 10.63% of ACV (in the model). That is a significant difference in the ROI of the short-term vs. the long-term mindset.
- Higher Customer Lifetime Value via the Perpetual Growth Engine approach: This model does not illustrate this, but typically this result is accompanied by higher-quality customers, who have higher retention and more spend – resulting in higher Customer Lifetime Value.
Making the Shift to a ‘Long-term’ Go‑to‑market Mindset
It’s not that the inverse of a ‘short-term’ mindset is to think ‘long-term,’ per se; rather, it is that we need to think differently about our go‑to‑market — about its sustainability, about its optimization and about its ROI. This has implications for our fundamental approach to go-to-market and to how we fund go-to-market.
“A better approach is to embrace ‘full-funnel marketing,’ looking at marketing performance across the entirety of the funnel to capture existing demand and create new demand tied to both brand outcomes and commercial outcomes,” notes McKinsey.
- Shifting to a Perpetual Growth Engine approach: To get there we need to shift from a tactical to a strategic go‑to‑market frame; from short-term, periodic, interruptive campaigns to a model for continuously Engaging, Nurturing and Converting targeted customers; and from single-channel ‘growth hacking’ to multi-channel orchestration.The core of this approach it to operationalize go-to-market around customer journey — transforming your go-to-market tactics into what we refer to at ANNUITAS as true Perpetual Growth Engine.This is state of go-to-market programs, processes, technology and data in which companies are able to proactively and continuously orchestrate content and channels in a targeted way to Engage, Nurture and Convert prospective buyers into customers. It also a state in which the engine is able to predictably manage and respond to buyer state in real time — driving multi-channel dialogue while continuously qualifying and assessing intent.A Perpetual Growth Engine is always on and always engaging (in the right place, at the right time) — both online and offline. It unifies not only demand marketing, but also interactions of both sales and customer success. It also unifies formerly siloed go-to-market systems, such as CMS, Marketing Automation Platforms and CRM, and creates a basis for them to not only be integrated but also to work together. At ANNUITAS we have developed our ANNUITAS Demand Process model as the ‘operating system’ we leverage to help clients for designing and running their Perpetual Growth Engine. Taking such an approach is particularly important in go-to-market environments for considered purchases with long sales cycles. In these environments, one-off engagement and a lack of ‘connectedness’ in interactions results in rapidly losing the opportunity for go-to-market programs to stay in sync with a buyer’s process.A Perpetual Growth Engine approach also is optimizable – which shows in its multiple of performance vs. traditional campaigning. By operating continuously, we are able to continuously optimize — raising performance and better aligning on customer critical path over time. By comparison, optimization of classic ‘campaigns’ is limited because they are run for a short period of time (often not long enough to get a full read on performance) and are not repeated.
Taking such an approach is particularly important in go‑to‑market environments for considered purchases with long sales cycles. In these environments, one-off engagement and a lack of ‘connectedness’ in interactions results in rapidly losing the opportunity for go-to-market programs to stay in sync with a buyer’s process.
A Perpetual Growth Engine approach also is optimizable – which shows in its multiple of performance vs. traditional campaigning. By operating continuously, we are able to continuously optimize — raising performance and better aligning on customer critical path over time. By comparison, optimization of classic ‘campaigns’ is limited because they are run for a short period of time (often not long enough to get a full read on performance) and are not repeated. - Evaluating GTM success via ROI and lift to CLV: Our shift in strategic approach needs to be accompanied by a shift in our view of funding go‑to‑market. We need to focus on overall go-to-market ROI — treating our spend on go-to-market programs as an investment, not merely a discretionary cost. The investment is in our relationships with customers, and the goal is to maximize Customer Lifetime Value, not merely drive short-term sales.
