Best GTM Strategy For Insuretech Startup Companies
The insurance sector is being fundamentally changed by technology-driven innovation. Emerging technologies like telematics, machine learning, deep learning, and automation have completely changed the insurance supply chain and are still developing better omnichannel customer experiences.
Investors are noticing that this evolution is being driven by insurtechs. Investment in venture capital (VC) has increased more quickly than more established private equity or public markets financing. VC investments in insurtechs exceeded $11 billion in 2021 alone, more than doubling the amount made in 2020. Additionally, private equity investors are becoming more eager to make investments sooner, which boosts the amount of money entering the market.
As a result, insurtechs are under intense pressure to grow quickly. While some insurtechs may decide to merge with established players, others will concentrate on growing on their own. Depending on the insurtech player's type, different growth paths exist. In this post, we focus on GTM strategies that can be effective in helping scale and how you can build yours today.
What is a Go-To-Market Strategy (GTM)?
A detailed plan or playbook on how to introduce your product to the market is known as a go-to-market strategy. It covers a wide range of topics, including who your potential customers or target market are, where they are, the best marketing initiatives and sales strategies to reach them, your positioning strategies, pricing strategies, and more.
Product marketers and their teams use a go-to-market strategy to make sure they successfully launch their product to the right customers at the right time and stand out from the market's already-existing competition.
Why is a GTM Strategy Necessary?
You'll need a plan to help you quickly enter the market and attract the interest of your target audience when launching your new product or introducing your current product into a new market. A go-to-market strategy is useful in this situation. It is a thorough plan that aids in determining how to launch.
According to a Harvard Business School study, 95% of newly released products fail within the first year. Your chances of failing can be lowered with the aid of a GTM strategy because:
It aids in the mapping out of all significant touchpoints, including
your potential customers' problems, current competitors' strategies, and their business models. Additionally, it covers your brand positioning and the marketing techniques you use to differentiate yourself from the competition.
When you launch your product, GTM strategy makes sure it meets user
needs, resolving the issue of product-market fit.
You can use it to calculate the cost of customer acquisition and
select the best strategy for your SaaS business and product. You'll be able to make more informed decisions that won't harm you or your company rather than utilizing unnecessary discounts and other strategies that the majority of Insuretech SaaS companies employ.
A go-to-market strategy is helpful not only during the product launch phase, but it also aids in establishing product-market fit and laying the groundwork for future product operations.
What Separates a GTM Strategy from a Marketing Strategy?
A go-to-market strategy is a one-time plan that assists you in entering the market as your product is being released. On the other hand, a marketing strategy involves ongoing efforts you'll make to win customers and keep your market share after the initial product launch.
The primary distinction between a GTM strategy and a marketing strategy is that the former is product-specific. A marketing strategy, in contrast, concentrates on the actions, distribution methods, and target market of the value proposition.
Which Sales Technique is best for your GTM SaaS Strategy?
You must choose the appropriate sales strategy to use before releasing your product in order to attract customers. Two main categories of sales GTM strategies are used in to entice and convert potential customers.
Your product is the main objective and the focal point of all marketing and sales efforts in a product-led go-to-market strategy. In this tactic, your product serves as the engine that propels acquisition, activation, and retention. Here, a free trial or freemium version is available for all users to try out the product.
Users can convert without going through a sales funnel or a member of your sales team. It's simpler for them to convert to paying customers once they've used your product and found value. Many SaaS companies, like Dropbox and Slack, use this sales strategy. It is accomplished by creating a valuable user experience for the product that motivates users to stick around.
A sales-led growth strategy is advised for insuretech companies whose products require more hands-on assistance and have a longer sales cycle. This go-to-market strategy places a strong emphasis on your marketing campaigns' efforts to generate leads and your sales team's capacity to persuade and turn those leads into customers.
The success of a sales-led strategy depends on your marketing team's lead generation efforts and how effective your sales reps are at pitching your key benefits and persuading prospects to convert, unlike a product-led sales strategy where conversions are driven by your product experience. To make this strategy successful, you'll need to work in concert and alignment with the marketing and sales teams.
What Pricing Strategy Does GTM Employ?
One of the crucial components of your go-to-market strategy is selecting the right pricing strategy for your Insuretech company. How will you reach your intended market with your product? When selecting a pricing strategy, you must be careful because pricing is subscription-based and necessitates a lot more commitment over the customer's lifecycle. In general, most Insuretech SaaS companies employ the following pricing models:
Freemium SaaS pricing
This model is effective for SaaS companies whose products may take more time to comprehend or realize their value. To give users more time to explore the product and improve their likelihood of upgrading to a paid plan, you can use a free plan with fewer features.
Monthly Fee Pricing Model
Offering your product and all of its features to users at a set price per month is known as the flat rate SaaS pricing model. They pay one price and receive everything; there are no feature-based pricing plans.
User-Based SaaS Pricing Model
With this pricing strategy, you charge your clients according to the number of users they have or anticipate using the service. Because they can select the plan best suited to their business size and alter it if it grows or shrinks, it makes things much simpler for your clients.
Feature Based Pricing
The number of features your users will need will determine how much each subscription will cost them in the SaaS pricing model. Users can pay for only the services they actually use thanks to this fair pricing strategy. They can always upgrade if their use case changes or if they need new features.
Tiered SaaS Pricing Model
This pricing strategy is used by the majority of Insuretech businesses because it enables you to target various customer types since there is a plan for everyone. To draw in customers, several packages with different features and costs are used.
Pay-As-You-Go SaaS Pricing Model
This pricing strategy, which involves charging customers according to how they use the product, is most frequently employed by infrastructure software providers. Customers pay a higher subscription fee the longer they use your product.
How do you Create a Go-To-Market Plan?
You need to consider a number of factors when developing your go-to-market strategy. The steps you should think about when making one are as follows:
Choose the appropriate audience
Establish a value proposition and messaging.
Select your pricing and sales strategy.
Select a marketing and distribution plan.
Select a customer funnel and customer experience strategy.
Select the appropriate metrics to monitor.
1. Choose The Appropriate Audience
Finding the ideal target market or user persona should come first. Every other aspect of your go-to-market strategy will depend on your audience. Which demographic will gain the most from your product? When you launch it, who will you be aiming it at? How will you contact them, too? Now that you have determined the appropriate audience, you can structure your marketing strategy and campaigns around them. It is simpler to identify and monitor the appropriate metrics when you concentrate on one market at a time.
2. Establish a Value Proposition And Messaging
The next step after determining your target market is to create a value matrix that will aid in the development of your distinctive value proposition. This will draw attention to user issues and position your product as the ideal remedy.
List your buyer personas, their problems, and whether or not your product solves them in order to accomplish this. You can then develop a value proposition and marketing messages for your landing page and other channels that speak specifically to the customer's pain points after you've completed this.
3. Select Your Pricing And Sales Strategy
Different pricing strategies are used by SaaS companies, which we discussed in a previous section. The best model for both you and your customers must be chosen. Will you provide a free trial or perhaps a freemium product? Choosing a sales strategy will help you get your product in front of the customers.
Here are some of the most typical:
Self-service: This eliminates the need for a sales representative or team because customers can find your products and subscribe to them on their own with ease. To attract customers to your product, you will need a solid marketing team and a solid marketing strategy.
Inside Sales Model: This calls for inside sales representatives who are in charge of developing and closing inbound leads. Due to their longer sales cycles, B2B SaaS companies tend to experience this most frequently.
The Field Sales Model: involves hiring and educating outside sales representatives who will present your goods to potential customers. They must go out into the "field" to meet with potential customers and make an effort to persuade them.
The Channel Model: calls for you to collaborate with a company or third party to market and sell your goods. You don't need a sales team to do it. You only require a trustworthy business partner.
4. Select a Marketing And Distribution Plan
Your marketing plan should outline how you plan to connect with your target market. How will you raise consumer awareness of your brand, stimulate demand, and capture their interest? The channels you pick will depend on the audience you've identified and what will convert them the best.
However, the majority of SaaS companies use cold outreach, content marketing and SEO as a marketing distribution channel to increase their domain authority, benefit users, and also create demand.
5. Select a Customer Funnel And Customer Experience Strategy
You'll need a customer experience strategy if you opted for the product-led approach, in which your product serves as the primary driver of customer acquisition and retention. This will guarantee users a smooth experience with your product.
Their chances of switching from a free trial or freemium subscription to paying users are also increased. The customer lifecycle is covered in this strategy, along with suggestions for enhancing user experience and customer success at each stage.
6. Select The Appropriate Metrics To Monitor
Product teams in SaaS companies must constantly monitor a variety of growth metrics. You should concentrate only on a select few at this point because it could easily become overwhelming. Among the crucial metrics are: Customer acquisition cost (CAC) lifetime value of the client (LTV) spending and revenue by channel.
The key performance indicators of your CAC and LTV show how much you spend to acquire customers and how much value they add to your company. You will need to adjust your acquisition spend or improve your product to boost retention if your CAC is higher than the LTV.
For established businesses, the LTV: CAC ratio is typically 3:1, but since you're just getting started, 2:1 is a good ratio.
A crucial stage in the creation and introduction of a product is the go-to-market strategy. Without it, you'll be launching your product into the market without any thought as to how it will draw consumers, distinguish itself from the competition, or expand.
No matter how great you believe your product to be, it's always best to launch it in the proper manner, at the proper time, and with the appropriate audience. A go-to-market strategy accomplishes this by establishing your expectations and doing away with speculation or assumptions.
Want to use a sales-led approach and book meetings with ideal clients today? To get started, schedule a demo with our done-for-you team.