Until recently, software companies have been taking the same antiquated go-to-market (GTM) approach that has traditionally worked well for mature markets, despite the variety of new GTM strategies that VCs and industry influencers have proposed.

This mature market GTM approach segments customers based on revenue size or number of employees and determines the best routes to market for each of those segments. For example, companies first draw a line at $1 billion in revenue. Then they assign any target accounts that are $1 billion and above to an enterprise field team and/or large systems integrators and everything below $1 billion to a less experienced and less expensive inside sales team or channel partners. Companies like ServiceNow and Workday have leveraged this approach very successfully in replacing HP, BMC, SAP, and Oracle HR respectively.

But emerging technology markets consistently tip by vertical before they tip by company or employee size. This is generally due to the broader disruption happening inside industry verticals. Retail for example, is considered a mature market and is generally one of the hardest for technology sales. However, every retail company — big or small — is innovating with emerging technologies because of the broad disruption in their industry, sparked by companies such as Amazon, Jet.com, and Etsy.

For example, a $300 million revenue company may spend $400,000 a year for an annual subscription as part of an initiative to bring its entire business onto a single technology platform because it is disrupting its industry; whereas a $2 billion revenue company may only spend $150,000 because it is only a small line-of-business (LOB) project within a bigger organization that is reacting to the larger industry disruption.

Of course, the Lifetime Value (LTV) of the $300 million revenue company is smaller than that of the $2 billion revenue company, but both sales motions are equally important and equally complex. Therefore, the routes to market have to be applied similarly. In a mature GTM approach, the rule is to apply your least experienced and least expensive routes to market to the smaller company. In addition, marketing spend in a mature GTM approach may have missed the $300 million company altogether. The combination of these two elements among many other mature GTM elements yield very poor results.

Therefore, building and executing an effective GTM approach for an emerging technology market requires a High Propensity Approach (HPA). What is an HPA, and how do you build an HPA model? The High Propensity Approach leverages three main elements:

  1. Customer benefit score
  2. Emerging technology score
  3. Disruption index

It starts with understanding what verticals can benefit the most from your technology, which helps you derive a “benefits score.” This is not about how much a customer will pay for your technology. Rather it is about the benefit they will receive from the outcomes your technology enables. This is a difficult exercise because most people generally believe their technology is great. However, each vertical, and potentially each use case, will perceive the benefit you enable differently. Understanding this and creating a weighted score is the first step in defining your GTM approach.

Once you’ve established the benefit score, the next step is to determine other emerging technologies the customer may use to identify where innovation is happening inside the prospective customer account. This is generally a good indicator to their openness to adopting new technologies, leading to the receptiveness for your offering. Several data services, such as RainKing and InsideView, provide this information. Similar to the weighted benefits score, you create a weighted “emerging technology score” that is relevant to your company.

Lastly, you have to consider what verticals are largely being disrupted. An independent source like Gartner or McKinsey is a good place to start. Create a weighted “disruption index” to be included in your HPA model.

You then build the HPA model by applying the benefits score, emerging technology score, and disruption index to your complete target prospect and customer list and determining an average HPA score for each. The higher the HPA score, the higher the propensity for your company’s technology. This HPA score model lets you design territories and routes to market that align with the prospects and customers that have the highest to lowest propensity to buy your technology by physical location. This lets you apply the right routes to market resources to the right prospects and customers in the right geographic locations.

The result is an efficient and impactful go-to-market approach that leverages capital investment effectively for an efficient model that builds a sustainable, high growth path for your company’s future.

I have seen many sales teams expend precious resources and energy going wide, without the necessary focus, resulting in many leads that either have extremely low deal value or just don’t come to closure. It is easy to have a very busy sales team that does not have the commensurate business impact to show for all the effort invested.

Steve Rowland is executive VP of Field Operations at database software provider DataStax.

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