Your Go To Market Strategy Sucks! Use Market Mapping instead.

Let’s be honest, your GTM sucks! Or worse, you don’t have one. Many businesses today lack a well-defined go-to-market (GTM) strategy. Instead, they rely on what has worked in the past, often hiring an army of sales representatives who don’t know which leads to approach or how to engage them effectively. They use tools like LinkedIn and ZoomInfo to gather as many contact details as possible, feed this data into marketing automation platforms, create endless follow-ups, and start spamming the inboxes of people for whom their solution may be entirely irrelevant.

I receive unsolicited sales emails and random calls daily from people trying to sell me products simply because they found my information on ZoomInfo or LinkedIn. Most of the time, I don’t even read the emails; I just junk them straight away. This approach feels cheap, impersonal, unreliable, and often irrelevant. Even if the tool they’re selling might be useful, the volume of these emails is so overwhelming that I’m immediately turned off when I receive one.

I find this strategy a complete waste of valuable resources and highly expensive. Such methods significantly increase the customer acquisition cost (CAC) per lead, and they require an extensive team of business development representatives and costly tools (data sources, marketing automation, CRM, touchpoint tracking, etc.) just to convert a single lead. Sure, you may convert a few leads if you’re targeting thousands of people daily, but at what cost?

Why Market Mapping Matters: Advantages, Disadvantages, and a Practical Example

Before crafting or revisiting your GTM strategy, it’s essential to map out your TAM, SAM, and SOM. Before spending a single penny on marketing or sales, understanding the true scope of your market—what you can serve and realistically obtain—provides the foundation for reverse-engineering your budget allocations and structuring your business development approach. This enables you to optimise resource allocation and strategically guide your sales team, ultimately reducing your customer acquisition cost (CAC) by improving conversion rates through targeted messaging to the right companies.

Let’s use an example:

Initial Scenario

• Number of Clients: 100

• Annual Spend per Client: £10,000

• Current Conversion Rate (Lead to Client): 5%

• Current CAC: £5,000

1. TAM (Total Addressable Market)

The TAM represents the total market demand for your product if you were to capture 100% of the market without limitations. In reality, 100% market penetration is rare and would imply a monopoly.

• Assumption: There are 10,000 companies in the broad market that could benefit from your solution.

• Calculation: TAM = 10,000 companies × £10,000 = £100 million

• Potential Opportunity: £100 million in revenue, representing the theoretical maximum.

2. SAM (Serviceable Available Market)

The SAM is a subset of the TAM that your product can realistically serve, considering factors such as geography, industry, and specific client needs.

• Assumption: You’re targeting tech companies in London, reducing your TAM to 2,000 companies that fit these specific criteria.

• Calculation: SAM = 2,000 companies × £10,000 = £20 million

• Market Opportunity: £20 million, reflecting the segment in London’s tech sector.

3. SOM (Serviceable Obtainable Market)

The SOM is the portion of the SAM that you can realistically capture given your current resources, market conditions, and competitive landscape.

• Assumption:

  • Sales Team Capacity: 5 sales reps

  • Outreach Capacity per Rep: 200 companies annually

  • Total Targetable Companies: 5 sales reps × 200 companies = 1,000 companies

• Calculation: SOM = 1,000 companies × 5% conversion rate × £10,000 = £500,000

• Revenue Goal: With current resources, aiming for £500,000 in revenue is realistic, although this will also depend on market conditions, competition, and service quality.

A Strategy for Maximising Success: The Track Record Targeted Approach

To maximise success within your SOM, one effective strategy is the track record targeted approach. This involves focusing outreach efforts on leads that share characteristics with your best clients, allowing for a more tailored approach that leverages your past successes. By aligning with proven patterns, you can increase conversion rates and further reduce CAC.

4. Reverse-Engineering Budgeting and Business Development Allocation with Market Mapping Improvements

To optimise budgeting and business development (BD) allocations, reducing Customer Acquisition Cost (CAC) and improving conversion rates are essential. By implementing a market mapping solution, you can drive significant improvements in both areas.

Improving CAC and Conversion Rates

Research from Floresco.ai indicates that using a market mapping solution can reduce CAC by 25%. In our current scenario, this would mean lowering CAC from £5,000 to £3,750 per client. Additionally, personalised and targeted outreach strategies have been shown to improve conversion rates. A HubSpot study found that personalised emails can yield transaction rates six times higher. Building on this, Floresco.ai data shows that showcasing your track record and tailoring outbound outreach based on past successes can boost conversion rates by 5%, increasing from 5% to 10% in this example.

Outreach Through Track Record and Tailored Approach

A crucial element in improving conversion rates is effectively presenting a strong track record to targeted leads. By leveraging market mapping tools like Floresco.ai, businesses can focus on leads that resemble their most successful clients. This targeted approach not only increases the relevance of outreach but also builds trust with potential clients who see proven success with similar companies.

According to a Forrester study, 77% of B2B buyers consider a company’s past successes a vital factor in their purchasing decisions.

Market Mapping Scenario (With Defined TAM, SAM, and SOM)

After implementing a market mapping approach, the company is now able to structure its GTM efforts with a more targeted focus:

1. Defined TAM, SAM, and SOM

With a clear TAM of 10,000 potential companies, the company identifies a SAM of 2,000 companies within the London tech sector. By calculating SOM, the team targets 1,000 companies realistically reachable by the sales team.

• Revenue Goal (Based on SOM): £500,000

• Reduced CAC: With market mapping, Floresco.ai’s research data suggests a potential 25% reduction in CAC. Thus, CAC could drop from £5,000 to £3,750 per client.

2. Refined Budget Allocation and Spending

By focusing on a smaller, more relevant segment (1,000 companies within the SOM), marketing spend becomes more efficient. The reduced CAC of £3,750 means a lower total acquisition budget, saving £125,000 compared to the initial scenario.

• Total Marketing and Sales Spend: £375,000 (reduced CAC of £3,750 × 100 clients)

• Savings on Marketing and Sales Budget: £125,000

3. Workload Allocation and Sales Rep Efficiency

With a targeted SOM, each of the 5 sales reps is responsible for managing 200 high-potential leads annually. This targeted approach allows sales reps to focus on quality over quantity, improving their efficiency and potentially enhancing their conversion rate to 10%, based on personalised and relevant outreach.

Projected Outcome (Compared to Initial Scenario)

• Conversion Rate Improvement: From 5% to 10%

• Number of New Clients: 200

• Total Revenue: £2 million (200 clients × £10,000)

• Total CAC Savings: £125,000 (by reducing CAC from £5,000 to £3,750 per client)

• Increased Revenue with Improved Conversion: An additional £1 million

Implementing a market mapping approach enables the company to reduce its CAC, reallocate budget effectively, and target a defined SOM with focused messaging. By ensuring that each sales rep has a manageable and high-quality lead list, the company not only saves on acquisition costs but also boosts conversion rates and total revenue. This demonstrates how market mapping can streamline GTM strategy, leading to better financial outcomes and improved efficiency across the board.