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What is a hybrid GTM motion?

July 14, 2022
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Peter Zawistowicz
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What is a go-to-market motion?

The term “go-to-market” (often abbreviated GTM) is an umbrella term used to describe the combination of tactics a company uses to monetize their products or services.

In a B2B company, the go-to-market organization typically encompasses marketing, sales, product, and customer success.

A go-to-market motion describes the various ways that a company can attract, acquire, and grow customers. It’s the combination of all the different tactics go-to-market teams use to sell a product or service to customers and has a big impact on how a company distributes resources to different functional groups within the go-to-market organization. 

No two companies have the exact same combination of tactics. Broadly speaking, though, companies’ go-to-market motions can be described by looking at how sales, marketing, and product organizations interact in different ways to generate revenue.

Let’s take a look at three different GTM motions commonly used by B2B SaaS companies today: sales-led, product-led, and hybrid (a combination of both).

What is a sales-led go-to-market motion?

As the name implies, a direct sales GTM emphasizes the use of sales teams to guide prospective buyers to a purchase.

Sales-led models are ubiquitous and are well-suited for the following cases:

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The product is complex The product is expensive The product is purchased repeatedly or in large quantities
Sales teams are beneficial when a potential customer must be educated about the product to derive value from it. Products that sell for over five figures typically require a salesperson to clearly articulate the value that the product delivers in exchange for this high price. Sometimes called “relationship selling,” repeat purchases can benefit from sales teams as human interaction can build confidence and loyalty over the customer’s lifetime.

Sales teams are valuable in these situations because they can act as mediators between the customer and vendor teams while also orchestrating the various moving parts of a complex purchasing process.

Here’s how a sales-led growth approach typically works:

  1. A marketing team will generate interest, often through gated content, industry events, and advertising channels. In parallel, sales reps may also prospect into companies in an "outbound" fashion through LinkedIn, automated emails, and cold calling.
  2. From there, a sales development representative (SDR) will qualify the lead and connect the best leads with the sales team. 
  3. The sales team will then convert the lead into a customer. 

This method is effective, is well supported with sales and marketing tooling, and is, therefore, one of the fastest models to get going. 

However, let’s take a look at one of the advantages of a sales-led growth approach that is discussed less often: segmentation.

Advantage: Aligning sales teams to customers

In most B2B SaaS companies, sales organizations will be composed of smaller teams with different responsibilities and areas of focus. For example, companies that segment their sales teams based on the size of their customers may have both “field sales” and “inside sales” teams.

Field sales (sometimes called enterprise sales) focuses on selling to a smaller number of potential customers. Because of the low customer-to-sales ratio, field sales teams can focus more on building long-term relationships with customers and growing revenue by deepening usage (expansion) or selling a wider variety of product types (upsell) to existing customers.

By contrast, inside sales focus on selling to an ever-growing number of customers. Inside sales teams prioritize a higher volume of transactions over the development of long-term customer relationships. The high customer-to-sales ratio means that inside sales are better suited to transactions that require less time and effort on the part of the salesperson.

However, the size of the customer is just one way to segment sales teams. Many companies choose to align teams to different industry verticals or whether the company is an existing customer to be retained/expanded or a “greenfield” account where the focus is closing an initial agreement.

The ability to align specialized teams to different cohorts of customers is one of the benefits of a sales-led go-to-market strategy. Additionally, subdividing a sales team focuses individual sellers on building stronger relationships with their customers while maintaining full ownership of the entire sales process.

Alongside its benefits, traditional sales-led approaches have some significant drawbacks.

Disadvantage: Customer acquisition costs scale linearly

The primary critique of sales-led GTM motions is that a company must continuously grow sales capacity in order to acquire more customers. Even if teams become more efficient, an individual seller can only oversee so many transactions in a quarter. As a company grows, the costs of (and overhead associated with supporting) a large sales team only ever increase.

Additionally, B2B buyers are more likely than ever to evaluate and purchase software without needing to work with a salesperson. As this preference becomes the norm, companies with a sales-led GTM will be increasingly misaligned with how their prospects want to buy. On top of that, software purchase decisions are being made by an ever-growing number of stakeholders, making the 1:1 approach of a sales-led motion more and more challenging.

What is a product-led go-to-market motion?

In contrast to a sales-led model, product-led growth acquires, retains, and expands customers primarily through direct interaction with the product itself.

The most common product-led GTM models allow prospective customers to use and interact with the product at no cost either for a limited period (free trial) or with limited functionality (freemium).

Rather than hearing about how a product solves a business problem from sales and marketing, prospective customers discover the value themselves as they interact with and evaluate the product directly.

When compared to a sales-led GTM, acquisition costs in a PLG motion do not scale proportionally with the number of new customers brought on. This means that a company is able to grow revenue faster than its costs. This efficiency is one of the reasons product-led growth has exploded in popularity over the past several years.

In parallel, B2B buyers are showing a strong preference for self-service or low-touch purchasing processes as it affords them more control over the evaluation and decision-making.

Product-led GTMs are well suited for the following scenarios:

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The product is straightforward The product is low risk The product can be used “off the shelf”
An individual can, within a few minutes, gain an understanding of how the product works and how it can be used. The tool can be set up and used by employees without significant technical expertise or high levels of approval authority. The product is unlikely to be customer-facing, support mission-critical tasks, or handle highly sensitive information. Once a customer decides to purchase the product, they don’t need to do a lot of extra work to customize or set it up to suit their specific needs.

It goes without saying, a product-led growth motion hinges on a strong product experience. Just as a sales-led motion would fail with an incompetent sales team, a product-led motion cannot succeed without product-market fit.

What is a hybrid go-to-market motion?

Pairing both sales-led and product-led strategies into a single go-to-market motion can unlock the benefits of each while mitigating the downsides. 

A hybrid go-to-market motion relies on product-led growth to efficiently acquire customers at scale while also overlaying a sales-led motion where complexity, risk, or customer preference requires it.
A hybrid go-to-market motion relies on product-led growth to efficiently acquire customers at scale while also overlaying a sales-led motion where complexity, risk, or customer preference requires it. When executed successfully, a hybrid GTM can keep customer acquisition costs (CAC) low while unlocking larger deals and higher customer lifetime value (LTV).

However, as with any hybrid, you may end up with the downsides of both with the benefits of neither. Let’s take a look at the advantages and pitfalls of a hybrid go-to-market strategy.

What are the benefits of a hybrid GTM?

In the previous sections, we discussed that the choice of go-to-market strategy depends heavily on the nature of the product a company sells. By extension, the complexity, price, or mission-criticality of a product determined how easy or difficult it is to acquire new customers and grow them into large sources of revenue. But what happens when the company behind a simple task management tool wants to sell enterprise contracts or conversely when an enterprise software company wants to acquire self-service customers at a lower price point?

Offering different products or pricing tiers to customers with different needs is a tried and true method of segmentation. However, you can differentiate the way you go to market to the same effect. 

Having both a self-service (or low-touch) go-to-market motion alongside a sales-led (or high-touch) motion not only allows prospective customers to self-select into their preferred buying motions, it also means vendors can increase the breadth of customers they’re able to sell to.

Think about your nearest coffee shop. Some customers prefer to walk up to the counter, order their coffee from the barista, and sit down at a table where they take their time enjoying their drink. Other customers order ahead on their phone, pick up their coffee (or go through a drive-thru) and take it with them. Having both delivery mechanisms means this coffee shop can sell to both customers in a hurry and customers who want to linger.

Similarly, B2B SaaS businesses can sell to prospective customers who prefer to evaluate and buy software on their own while also providing a level of consultation and support to buyers who are looking for additional, personalized assistance. 

Using PLG methods to acquire and convert customers, but selectively deploying sales to reduce technical friction, mitigate risk, or manage complexity is sometimes called a “sales-assist” model. In some scenarios, the sales assist function is the only sales function at a company (for example, at PLG Natives like Zapier or Asana). In others, like at PLG Transformers including MongoDB and Confluent, they act as a lower-cost, front-line team that triages customers into high-touch and low-touch swimlanes (similar to how an SDR qualifies leads generated by “in” or “out” based on certain criteria).

What are the challenges of a hybrid GTM?

In our coffee shop example, both the customer who took their coffee to go and the customer who stayed to enjoy their drink payed the exact same amount for their purchase. However, the cost of serving each customer was very different. The customer who stayed in the shop required more of the barista’s time to generate the same amount of revenue. Additionally, the to-go customer didn’t take up a space at a table, flip through the newspaper the shop provides, or use the restrooms. 

For this to be viable, the coffee shop must charge enough for every coffee to cover the costs of a sit-in customer, even if a portion of the customers takes their coffees to go. However, this would likely drive customers to more affordable competitors. Alternatively, the coffee shop would drive more revenue from their sit-in customers than from their to-go customers to make the additional investment worthwhile.

In a hybrid GTM, there are similar hidden costs (both real and opportunity costs) in providing a high-touch buying experience to every prospect. When a hybrid GTM fails, we get the lower LTV of PLG with the high CAC of a sales-led approach. Just like the coffee shop in our example, SaaS businesses must align the cost of acquiring a new customer with the potential revenue that the customer will generate.

The most common method of predicting the LTV of a potential customer is to use the size of the company as a rough analog. However, sophisticated hybrid companies like MongoDB, Vidyard, and Amazon Web Services (AWS) will use dozens of other attributes to make an educated guess about what level of investment each prospect should receive.

With tools like Pace, you can define the profiles of companies that warrant a higher-touch motion and alert sellers when they should engage, leaving lower potential LTV customers to self-serve. In addition, if a self-service customer starts to demonstrate churn behavior or begins to show potential to become a high LTV customer, Pace will also flag these customers for sales’ attention.

Wrapping up: All roads lead to hybrid

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Sales-led
Product-led
Hybrid
Customer acquisition costs
High, scales proportionally with revenue
Low
Varies based on potential customer LTV
Advantages
  • Fewer product pre-requisites
  • Easier to offer more personalized/segmented buying experience
  • Able to navigagte/overcome technical or purchasing complexity
  • Highly scaleable and efficient
  • Aligns with buyer preferences for self-service
  • Aligns level of support/personalization with potential LTV
  • Increases range of addressable customers
  • Revenue scales faster than sales costs
Disadvantages
  • Costs increase as revenue increases
  • Misaligned with buyer preferences for self-service
  • Requires a lot of up-front product investment
  • Harder to acquire larger deals
  • Not compatible with every product
  • Introduces execution risk
  • Introduces organizational complexity

As sales-led companies reach the point where revenue growth no longer outpaces the cost of sales and marketing, they will turn to product-led growth strategies to improve the efficiency of their customer acquisition. In parallel, as product-led companies start to “move upmarket” and target larger deals with more complex buying cycles, they will borrow sales-led tactics to improve customer LTV.

This means that, regardless of the GTM motion you begin with, you’ll likely end up with a combination of both strategies—a hybrid. In fact, Gartner predicts that, by 2025, 85% of SaaS providers will employ a form of self-service product-led growth for new customer acquisition. In addition, 90% of these will also add an assisted/hybrid sales motion.

 Where are you on your journey to a hybrid GTM? 

Image credits

Complex by auttapol from NounProject.com

Expensive by Adrien Coquet from NounProject.com

Handshake by amy morgan from NounProject.com

Low by Srinivas Agra from NounProject.com

Plug by Jacob from NounProject.com

Box by Revival Icon Studio from NounProject.com

Barista by Made from NounProject.com

Barista by Achmad Subki Arinata from NounProject.com

Mobile Phone by Komkrit Noenpoempisut from NounProject.com