Going, Going, Gone: Developing Sports GTM Strategies
Hoping for the best, ready for the worst, and prepared to pivot
If you are new around here, here’s why I started writing.
It’s nearly Major League Baseball Opening Day this Thursday, so why not a baseball reference? Let’s swing, strike out, and make something happen together. Bringing me to developing a go-to-market plan.
To capitalize on sports opportunities, you need to have a well-defined go-to-market strategy in place. A go-to-market strategy outlines how any product, offering, or organization will reach its target audience, promote its product or service, and generate revenue. Below, I will talk about how I approach analyzing key markets and developing strategies, including
Defining the target audience and understanding their needs
Setting clear objectives
Analyzing the financial impact of your strategy
Executing your strategy
There are of course other frameworks, but I find this to be the most helpful when it comes to getting started.
Define target audience and understanding the needs
Approaching the sports industry (or any industry, for that matter) requires a carefully crafted go-to-market strategy that capitalizes on emerging opportunities and secures a competitive edge. The cornerstone of this strategy lies in defining your target audience and gaining an intimate understanding of their needs, wants, and pain points. In-depth market research provides valuable insights into their demographics, psychographics, behaviors, and preferences, allowing you to tailor your offerings, messaging, and channels to resonate effectively with your audience.
My approach to market research consists of a mix of first and third party insights. For first party, I leverage personal connections to learn more about a specific space (especially if I’m not a SME), and analyze past approaches. For third party, I rely heavily on search engines and news articles. Typically, you can put together a solid understanding of an organization’s or leader’s approach to innovation through their own carefully crafted words. Third party research also allows you to analyze the competition landscape, understanding your competitors’ strengths, weaknesses, and strategies. This helps you identify potential areas of approach.
Your unique value proposition is the essence of your go-to-market strategy, encapsulating what sets your sports organization apart from the competition. It articulates the compelling benefits your offerings provide to your target audience, clearly and concisely communicating why customers should choose you over others. A well-defined value proposition is the driving force behind your marketing efforts and serves as a guiding principle for all your go-to-market activities.
Selecting the appropriate channels to reach your target audience is a critical decision that can significantly impact the success of your go-to-market strategy. Social media, email marketing, paid advertising, public relations, and partnerships are just a few of the channels at your disposal. Carefully evaluate each channel based on factors such as your audience's preferences, the nature of your offerings, and your budget to determine the most effective means of reaching and engaging your audience.
Finally, setting a realistic budget and timeline for your strategy is essential for effective planning and execution. The budget should encompass all necessary expenses, including market research, marketing campaigns, product development, and operational costs. The timeline should outline key milestones and deadlines, ensuring that your strategy is executed efficiently and within a reasonable timeframe. We all know that strategies are great written down on paper, but are rarely perfect. This makes it important to create lists of second and third order effects.
As a simple example, in the Army, I had four different radio systems to manage - one was always the primary, but from there we aligned on alternative, contingency, and emergency. This allowed us to be flexible as we entered austere environments and created alignment across the organization. If something went wrong with the primary system, we had a deliberate plan to step down to the next one on the list.
That’s how your strategy needs to be set up - allowing for freedom of decision making and alignment across the organization of the right / left limits of everyone’s actions. Just like a PACE plan.
Determine total and serviceable addressable market
Determining the total addressable market (TAM) and serviceable addressable market (SAM) is essential for gauging the potential of your endeavor. TAM represents the complete scope of possible customers within the sports industry, encompassing all individuals who could potentially benefit from your product or service. SAM, on the other hand, narrows down this broad spectrum to the segment that is both accessible and receptive to your offering.
Calculating TAM entails identifying the entire pool of potential customers within the sports industry. This involves segmenting the market based on relevant criteria such as demographics, psychographics, and geographic location. For instance, if your focus is on fitness enthusiasts who partake in marathons, your TAM would comprise all individuals who regularly engage in marathons worldwide.
The next step is assessing SAM. Here, you closely examine the TAM to pinpoint the segments that align most closely with your product or service, both in terms of interest and purchasing power. Key considerations include disposable income, accessibility, and competitive landscape. Continuing with our example, if your product is a premium sports watch, your SAM might be confined to affluent individuals with a strong passion for sports and a willingness to invest in high-end accessories.
Understanding TAM and SAM enables you to set realistic revenue targets and allocate resources judiciously. It also guides you in identifying the most promising market segments to concentrate your go-to-market efforts on, optimizing your strategy for efficiency and success. However, it's important to note that market conditions and customer preferences are in a constant state of flux. Therefore, regularly revisiting and updating your TAM and SAM is crucial to maintaining alignment with the evolving dynamics.
Set clear objectives
Once you have defined your target audience and understood their needs, you need to set clear objectives for your go-to-market strategy. These objectives should be specific, measurable, achievable, relevant, and time-bound (SMART).
Some examples of SMART objectives for a go-to-market strategy in sports could include:
Increase brand awareness among sports fans by 20% within six months
Generate 1,000 new leads from sports events within one year
Increase website traffic from sports-related sources by 15% within three months
Secure partnerships with three major sports organizations within two years
Launch a new product or service that targets sports fans within six months
Your objectives should be aligned with your overall business goals and should be realistic and achievable. You should also have a plan in place for measuring your progress towards your objectives. This could involve tracking website traffic, leads generated, and sales closed. By setting clear objectives and tracking your progress, you can ensure that your go-to-market strategy is successful.
In addition to setting SMART objectives, you should also consider the following factors when developing your go-to-market strategy, as discussed in steps 1 and 2:
Budget
Timeline
Resources
Competition
By taking all of these factors into account, you can develop a go-to-market strategy that is tailored to your specific needs and goals.
Analyze financial impact
Analyzing the financial impact of your go-to-market strategy is a critical step in ensuring its success. By conducting a thorough financial analysis, you can make informed decisions about resource allocation, identify potential risks, and maximize your return on investment.
One key financial metric to consider is the net present value (NPV) of your strategy. NPV represents the sum of the discounted cash flows generated by your strategy over its lifetime. A positive NPV indicates that the strategy is expected to generate a positive return on investment, while a negative NPV suggests that it may not be financially viable. This concept initially was difficult for me to grasp, but the easiest way to think about it is the following:
NPV helps people decide if an investment or a project is worth doing. If the NPV is positive, it means the project is likely to make more money in the future than it costs now, like putting money in your piggy bank and getting more back later. But if the NPV is negative, it might not be a good idea because you might end up losing money in the long run.
To calculate NPV, you need to estimate the following:
Initial investment: This includes the costs associated with developing and implementing your go-to-market strategy, such as market research, product development, and marketing expenses.
Cash flows: These are the net cash inflows and outflows that will occur as a result of your strategy, such as revenue generated from sales, operating expenses, and capital expenditures.
Discount rate: This represents the cost of capital or the rate at which you expect to earn a return on your investment.
Once you have estimated these values, you can calculate NPV using the following formula:
NPV = -Initial investment + ∑ (Cash flows / (1 + Discount rate)^t)
Where:
- t represents the time period
NPV analysis allows you to compare different go-to-market strategies and make decisions based on their expected financial performance. It also enables you to identify the break-even point, which is the point at which the cumulative cash flows equal the initial investment.
In addition to NPV, there are other financial metrics that you should consider when analyzing the impact of your go-to-market strategy, such as:
Return on investment (ROI): This measures the amount of profit generated for each dollar invested in the strategy.
Payback period: This represents the time it takes to recover the initial investment.
Internal rate of return (IRR): This is the discount rate at which the NPV of the strategy is equal to zero.
By carefully analyzing these financial metrics, you can make informed decisions about your go-to-market strategy and increase the likelihood of its success. You will also make my finance professors proud by following what I say here - hopefully.
Go for it
At this point, you are walking up to the ‘plate’ ready to swing for the fences. As I mentioned above, every strategy has its flaws, assumptions, and external factors that may prevent it from happening as planned. In my opinion, that’s the fun part. At the end of this process, you should have a spray chart of hits and a few strike outs.
Execution
The first step is to execute your go-to-market strategy. This involves putting your plan into action and taking the necessary steps to achieve your objectives. This could involve launching a new product, entering a new market, or expanding your sales team.
Monitoring and Tracking
It is important to monitor your progress and track your results as you execute your go-to-market strategy. This will allow you to see what is working and what is not, and make adjustments as needed. You’ll use your KPIs that you’ve defined for this strategy to monitor and track progress, and add additional ones as they come to light.
Be Prepared to Pivot
It is important to be prepared to pivot if necessary. Things do not always go according to plan, and you may need to make changes to your strategy as you go.
For example, you may need to change your target audience, your objectives, or your marketing tactics. You may also need to adjust your budget or your timeline.
Learn from Each “Swing”
It is important to celebrate your wins as you execute your go-to-market strategy. You may hit a home run right away, land a massive customer, and invest a ton of resources. This may distract you from the next time in the line up - and you strike out. It’s important to celebrate your wins, but not lose sight of what the plan laid out and learn from your mistakes.
As always, thanks for reading - please like, share, and comment!