Businesses love to say the customer is always right. (In fact, they’ve been saying it for well over a century.) The phrase implies that when you think in terms of what your customers want and will benefit from – instead of in terms of what benefits you – you’re more likely to succeed.
Yet, if you look at the way companies have traditionally approached go-to-market strategy, they have rarely put the customer at the center. They’ve thought instead of which outcomes they want to optimize for themselves – like how many subscriptions they want to sell, or how much revenue they want to generate per customer – and assumed that customers will fall in line.
I’m here to tell you that this is a flawed approach to GTM. The most successful sales, marketing and customer engagement teams are ones that structure GTM around customer outcomes.
Here’s a look at what that outcome-based GTM means, and a practical approach to implementing it.
Conventional GTM Strategy: The Subscription-Based Approach
When I say that traditional GTM strategies lack a true focus on the customer, I mean they reflect what the company wants, not necessarily what the customer wants.
As an example, consider the classic SaaS strategy of subscription-based sales. For years, SaaS vendors have typically charged based on simplistic factors, like customer headcount or usage time.
This makes sense from the vendor’s perspective. This data is easy to track. It also usually correlates nicely with cost: More users and usage means higher product delivery costs on the vendor’s end, so charging on this basis is an easy way to keep revenue and profit in neat alignment.
From the customer’s perspective, however, subscription-based GTM is rarely ideal, to put it mildly. The reason why is simple: Customers care about value, and value often does not map directly onto how many of a customer’s employees are using a product, or how many hours they spend per month logged into it.
Instead, customer value is shaped by how much revenue the product generates for the customer, or how much money it saves them by adding efficiency to their workflows.
Importantly, GTM strategies that don’t reflect customer outcomes aren’t just subpar from the customer’s perspective, they can also harm sellers because they make it harder to close and retain clients. When you tell prospects they have to pay a fixed price for every user or for every minute users spend in a product, it becomes harder for buyers to justify a purchase. It also becomes more challenging to justify renewals if customers aren’t sure how much value a product creates for them.
To illustrate this point, consider pricing for enterprise AI products. Per-user pricing has become a popular model for these offerings. But it has also raised more than a few concerns among some executives, who worry that just because a large number of employees are using AI capabilities doesn’t necessarily mean the capabilities are creating real value.
Alternatives to Subscription-Based GTM
If user- or usage-based GTM falls short, what alternative approaches are available to vendors? The answer is to focus on outcome-based GTM strategies – ones where pricing, sales and marketing strategies reflect the quantifiable value that an offering creates for customers.
Businesses can implement such a strategy using tactics like the following:
Outcome-based pricing, in which vendors charge based on how much revenue their products generate for customers or how many sales it helps to close.
Outcome-centric sales, meaning that sales teams focus on quantifying the value that a product is poised to create for each customer and centering sales conversations on that data.
Allowing customers to negotiate renewal contracts based on how much value newly released product features will create for them, instead of looking at simplistic metrics like how many active users the customer has.
Strategies like these are better for sellers because they tie product pricing to value. They also help companies get ahead of situations where customers expect pricing discounts at contract renewal because the total number of product users has decreased. This often happens after a product’s initial adoption period simply because after experimenting with a new offering, some employees will find the product useful and others won’t – even if the overall value that the product creates doesn’t change.
Customer-Centric Outcome Measurement
A seeming challenge to outcome-based GTM is that it requires the ability to track outcomes and value from the customer’s perspective. Historically, this wasn’t easy. Vendors didn’t have access to the data necessary to know, for example, how much revenue a product created for customers, or how many sales a customer closed by using the product.
But that’s no longer the case. Modern digital tools that integrate deeply into customer systems provide the visibility necessary to track outcomes – and, by extension, quantify those outcomes and demonstrate them to customers. This is true both for existing customers, as well as for prospective customers whose outcomes a vendor can model based on what it knows about similar clients.
Leveraging data about customer value in this way is not only possible, it’s imperative. For sellers, recentering GTM strategies around solving customer pain points is the key to winning deals and increasing revenue in a world where customers are constantly reevaluating their contracts, and where vendors typically face enormous competition.
In other words, an outcome-based strategy finally extends “customer is always right” thinking into GTM, which is precisely what businesses must do to stand apart from the crowd.
