Crafting a successful go-to-market (GTM) strategy is essential for any company seeking to win in a rapidly changing marketplace, and cloud services can be described as exactly that. Demand for new cloud services, and the expertise to put them to use inside a business, is exploding. This is providing not only an opportunity for professional services firms looking to capitalize on customer demand, but a challenge when it comes to standing out and being seen as a partner of choice in an increasingly crowded market.
A strong GTM strategy is the answer. A great strategy, combined with execution, can mean the difference between a company growing 100% year over year, and one growing in the single digits. This element of a company’s corporate strategy has always been important, but when it comes to the third wave of the cloud, the rules of engagement have changed.
GTM – The Basics
The basic point of any effective GTM strategy is to put a plan and the necessary organizational pieces in place to deliver on a company’s unique value proposition to customers and partners in order to achieve competitive advantage and run a profitable business. While that may be a mouthful, it’s even more complicated than it sounds. Which is why only a handful of companies become true market leaders in their respective sectors.
Let’s start with the basics. A traditional GTM strategy usually starts with the four P’s of marketing:
1. Product – the good or service being produced and sold
2. Place – the target issue/market being addressed and served
3. Price – the packaging and pricing model being used to provide the solution
4. Promotion – the value position and differentiated messaging to stand out in the market
A GTM strategy establishes the objectives and tactics to put the four P’s into action.
Historically, many technology companies – especially product companies — tend to focus their GTM strategies around the product and pricing component, focusing primarily on the technical qualities of an offering and how it’s better than competitors. Those fundamentals are still important, but the emphasis over the last decade has shifted to the business value that those technical qualities provide (productivity, innovation, cost savings, agility, customer satisfaction, etc.), and almost as importantly, the experience that surrounds the product or service.
Too many companies make the mistake of believing that a successful GTM strategy starts with marketing and ends with sales.
Too many companies make the mistake of believing that a successful GTM strategy starts with marketing and ends with sales. However, cloud companies and a growing number of managed service providers that rely on a pay-as-you-go pricing model, understand that it doesn’t end with landing a customer. It’s about crafting a great customer experience and expanding their reliance on the solutions over time. Customer engagement and loyalty are the key to long-term growth and profitability.
GTM Strategies Have Shifted with Cloud Adoption
When you consider how much things have evolved over the last two decades, it’s not surprising that overall GTM strategies, and the market segmentation, pricing, channel programs, messaging and promotional techniques used within that strategy, would evolve as well.
In the first two stages of the cloud, customers were still getting comfortable with the cloud model. Cloud consultancies that wanted to gain a competitive advantage, aligned themselves with the leading cloud vendors – Salesforce in particular – and demonstrated their horizontal implementation and integration skills through customer success stories and thought-leadership promotions.
Strategic partnerships, customer success stories and thought-leadership campaigns are even more important in the third wave of the cloud. However, rising customer expectations, intensifying competition, maturing platforms, and the move to digital interactions have added another layer of GTM requirements to the mix.
GTM Strategies for Third Wave Cloud Consulting Leaders
Here are some of the most significant GTM changes the next generation of consulting leaders must address in the third wave of the cloud:
Marrying business and tech capabilities.
In the past, promoting a consultancy’s proficiency in a specific technical platform was the primary objective. As cloud vendors marketed the technical advantages of their on-demand solutions over traditional on-premise applications, their consulting partners rushed to show how they could help enterprises quickly swap out the old systems with these new cloud services.
Today enterprise customers are looking for more than implementation help or generic “lift and shift” projects. They want to create unique and seamless digital experiences that utilize an expanding set of cloud applications and platforms, which requires third wave consulting leaders to be as much business consultants as IT technicians.
When it comes to rethinking important business processes or customizing cloud solutions to meet specific corporate needs, consultancies need to demonstrate through their positioning, services and workforce that they offer far more value than just implementing another new application.
Leading with vertical market requirements and industry-specific expertise.
In the past, solving the generic needs of specific departments was the primary objective of most cloud consultancies. Today, addressing the business process challenges that cross enterprise boundaries requires a more intimate understanding of vertical market dynamics and industry-specific requirements. Cloud platform vendors are seeing this shift as well, and adjusting their own GTM accordingly.
As such, third wave consultancies must go beyond application-specific skills to demonstrating true domain expertise in specific industries. They also need to attract professionals with the experience to fully understand the business objectives of their clients. This means cloud consultancies must position themselves as a vertical market specialist as well as a cloud solution expert, and create the culture, brand and marketing initiatives that will not only win new clients but also attract the talented people needed to deliver on those promises.
Tightening strategic partner relationships while adding multi-cloud capabilities.
In the past, only a handful of cloud consultancies were able to garner a lion’s share of the professional services opportunities being generated by cloud vendors. Today’s proliferation of cloud players – both vendors and services firms – has created a buyer’s market for customers that want to select the perfect solution and the perfect partner to transform their operations. While the larger addressable market means more opportunity for cloud consultancies, the growing number of consultancies vying for a piece of the action makes it far more difficult to win customers, and gain the attention and full support of the cloud vendors.
Third wave consulting leaders must now demonstrate their ability to add value to a cloud vendor’s functional capabilities, while also showing they can work well in an enterprise’s multi-cloud environment. This means working closely with the strategic vendor’s field sales team, as well as collaborating with its alliances, marketing and service delivery teams – investing in their partner’s success as well as the customers.
This can be a tricky balance for firms that want to be a long-term, trusted partner for customers. They can’t just operate in a vacuum, but must recognize the other cloud solutions that enable clients to achieve their corporate objectives and prevent unnecessary vendor lock-in.
Shifting from projects to ongoing customer relationships.
In the past, being adept at chasing immediate project opportunities was the key to quickly building a cloud consulting business. But, too often this approach led to pricing compromises and less than optimal outcomes, which in turn resulted in frustrated clients and consultants, as well as operating inefficiencies for the consultancy. In today’s highly competitive marketplace just winning project opportunities is no longer a sustainable business model.
To win in the third stage of the cloud, consulting firms must adopt new engagement models that create an ongoing business relationship with clients. In some cases, this will mean adding a set of ongoing, managed services to their portfolios. In other cases, it will mean broadening their service portfolios to add strategy consulting, change management, productized offerings, or other value-added capabilities to their toolkits to create a full lifecycle of services and establish tighter bonds with their clients.
Some of the more mature firms are also experimenting with outcome-based pricing, or establishing co-innovation centers to demonstrate they see themselves as an extension of the client team and are invested in the client’s long-term success.
Moving from physical to virtual engagement techniques.
With the ebb and flow of this pandemic, it isn’t likely that we’ll ever return to the old normal of relying heavily on face-to-face sales engagement. Some conferences will return and some on-site visits will be necessary, but many enterprise decision-makers will be happy to continue to rely on remote, virtual interactions going forward.
Getting the attention of these decision-makers will be increasingly difficult, and demonstrating a consultancy’s unique capabilities via virtual channels will be an escalating challenge. This will place even greater pressure on cloud consultancies to carefully craft (and test) their marketing messages, target their marketing campaigns, invest in tools to hone and support their sales efforts, and track their success to continually optimize their performance.
What worked in the first wave of the cloud simply isn’t sufficient in the third wave of the cloud.
The ideas we’ve presented here are just some of the ways that GTM strategies and tactics have to change in the third wave of the cloud. However, they are by no means the only ways. The rise of marketplaces and peer review sites, the growing importance of account-based marketing and content marketing, and newer mechanisms to drive customer loyalty and community engagement are just a few of the other GTM tactics we haven’t even touched on here.
I’ll close by saying the rapid adoption of cloud-based solutions accelerated by COVID has created unprecedented opportunities and challenges for a new generation of cloud consultancies, but capitalizing on those opportunities and overcoming those challenges will require an ever-evolving GTM strategy. What worked in the first wave of the cloud simply isn’t sufficient in the third-wave of the cloud. That statement applies to more than GTM as well. If you’d like to learn more, I’d encourage you to check out Tercera’s ebook on what it takes to be a services leader in the cloud’s third wave.