Go-to-market (GTM) vs the Predictable Revenue Model (PRM)

Every revenue ops influencer is talking about GTM…:

But where has this obsession come from, and what does it mean for SaaS revenue ops?

At DataBees, our clients leverage our service to fuel their Go-to-market (GTM) motions with the best data possible. We’ve been discussing the PRM vs. GTM conversation internally, debating what it means for the industry and our vision. Here is our deep dive. 

What is GTM?

GTM, or go-to-market, is your specific game plan for getting your product into the hands of your customers. It’s a roadmap for your product’s path toward customer adoption. With a GTM-focused approach, you create a clear plan and direction, ensuring everyone – from marketing to sales, customer success, and even product – is on the same page.

GTM strategies can come in all shapes and sizes:

• Outbound: cold email, cold calling, ABM.  
• Inbound: Demand generation, SEO, PPC. 
• Product: Shareability, upsells, cross-sells, expansion revenue.  
• Event: Immersive in real-life experiences.
• Channel: Affiliates, resellers, agencies.
• Ecosystem: App exchanges, Integrations, Open-source code. 
• Community: Network fostering, founder-led thought leadership.  

There will be SaaS founders who build their entire business model of one GTM ‘play’ or ‘motion,’ whereas others will have many running in unison or deploy a blend of the different types.

With a GTM approach, each GTM motion will have consistent positioning, branding, messaging, outbound strategy, sales execution, service delivery, and product support across the entire customer journey.

What is the PRM? 

The PRM was the operational framework that drove growth for many of the world’s largest B2B SaaS companies in the last 15 years. The main feature of the PRM was that it divided the sales process into specialized roles, such as Sales Development Representatives (SDRs), who focussed on outbound prospecting and lead generation, and Account Executives (AEs), who were responsible for closing deals.

The PRM’s impact was systematizing lead generation and sales processes to achieve consistent and scalable growth. This growth signaled to investors that this company had a bright future and was winning market share, which meant it warranted further investment to fuel growth. This ‘hungry’ selling machine required large amounts of capital and large headcounts to maintain velocity, and it prioritized growth over anything else.

In this model, the core GTM was outbound, and if you wanted to grow, you simply hired more SDRs and upskilled the current SDRs into AEs.

How does GTM fit in with PRM?
A GTM-focused strategy has always been a feature of the PRM, but it wasn’t at the top of most revenue leaders’ minds. Instead, growth at any cost was the primary goal. If CROs could drive growth, they would be lauded and greatly rewarded; it didn’t matter how growth was achieved nor how efficient each GTM motion was.

Growth is still a vital feature of a GTM-led approach, but each GTM motion needs to achieve ROI and be sustainable. So, let’s look deeper at the differences between the Predictive Revenue Model and the GTM-led approach. 

Predictive Revenue Model:

• Focus on Forecasting: This model is all about using past data to guess what future growth will look like. It’s like trying to predict the weather based on last week’s patterns. Because the primary goal was securing more investment, strong growth forecasts were vital in persuading investors to pull out their checkbooks. 
• Rapid Growth: The aim here is to grow fast by making lots of sales at high velocity. The goal is to move deals through the pipeline quickly. This approach focuses on short-term wins rather than thinking about the long term. 
• ROI, profitability, or CAC payback optional: The most critical factor was getting the deal done and over the line. There was a willingness to sacrifice margins to close more booked revenue. This was again used to fuel rapid growth, capture more market share, and get a higher valuation to secure further investment. 

GTM-led approach:

• Sustainable Growth: Sustainable growth in go-to-market strategies is all about balancing profitability and efficiency, especially when resources are tight. There is a focus on attracting the right customers to avoid unnecessary support costs and maximize long-term revenue. This also means that GTM motions should be paying for themselves early doors, and not burning through cash without achieving ROI.
• Cross-departmental Team Collaboration: GTM-led approaches involve everyone. Starting from the CEO, marketing, sales, product, and customer success teams work together, sharing their insights and knowledge to maximize sales results, reduce service costs, and increase customer lifetime value.

Why is PRM outdated?

The Predictable Revenue Model was revolutionary in its time, but it doesn’t fit the needs of today’s market. Its scalability limitations, difficulty penetrating saturated markets, and inability to meet the needs of savvy, informed buyers make it less effective. 

Moving towards customer-centric, inbound marketing strategies offers modern SaaS companies a more sustainable and successful path. As the industry evolves, so must the strategy for capturing and retaining customers.

Resource Intensive:

The model relies heavily on specialized roles (such as Lead Generation Reps, Sales Development Reps, Account Executives, and Customer Success Managers). As the organization scales, the need for additional specialized personnel increases, leading to higher costs and complexity in managing these roles.

Market Saturation:

Over time, the market can become saturated with outbound efforts, making it increasingly difficult to achieve the same results from cold calling and emailing. Prospects may become desensitized or resistant to these approaches, reducing their effectiveness.

Quality Over Quantity:

The model emphasizes volume and predictability, sometimes at the expense of lead quality. As the volume of outreach increases, the quality of leads may remain high, leading to lower conversion rates and less effective sales efforts.

Dependence on Human Effort:

The model heavily depends on human effort and manual processes. Scaling these processes requires proportionally scaling the workforce, which can lead to inefficiencies and diminishing returns.

Changing Buyer Behavior:

Modern buyers are more informed and have different expectations. They often prefer to conduct their own research and are less responsive to traditional outbound tactics. This shift requires a more inbound-focused or hybrid approach.

Technological Advancements:

The model was designed in a different technological landscape. Advances in marketing automation, AI, and data analytics have significantly changed the sales process. Organizations not integrating these technologies into their sales processes may struggle to scale effectively.

Coordination Challenges:

As the sales team grows and specializes further, coordinating efforts between different roles and maintaining a seamless process becomes more challenging. Misalignment between marketing and sales or within different sales roles can lead to inefficiencies.

Overemphasis on Outbound:

The Predictable Revenue Model heavily relies on outbound sales efforts. While effective in certain contexts, it may not be sustainable as the primary growth strategy, especially when inbound marketing and other strategies offer more scalable and cost-effective growth opportunities.

Switch to Inbound Marketing

Inbound marketing, where customers come to you through content, SEO, and social media, is becoming the go-to strategy. According to the Demand Gen Report, 79% of B2B buyers say compelling content significantly influences their buying decisions. Inbound marketing aligns better with modern buyers’ operations, providing them with the information they need at their own pace and building trust over time.

Leaving the Predictable Revenue Model Behind 

For years, businesses have relied on this model for its promise of steady, reliable growth. With less money, resources, and VCs demanding near-profitability, this model is dead. We clearly need a fresh, more sustainable approach.

Adopting a GTM approach involves a few strategic steps:

• Think in Segments: Instead of viewing your market as a single entity, think of different customer segments with different needs.
• Focus on Use Cases: Tackle specific use cases and address universal pain points. Create narratives with case studies, testimonials, or use-case scenarios.
• Align the Organization: Make sure the entire organization is aligned with the GTM strategy. Everyone should understand their role and how it contributes to the overall goal.

GTM: An Uncomfortable but Essential Transition

The transition from a predictive revenue model to a GTM strategy can cause disruption. It’s usually something you have to do because the current model just isn’t working anymore. This move can be rough, often involving losing colleagues’ resources and realizing you’re finally doing what should’ve been done.

It forces businesses to rethink their strategies, realign their teams, and focus on what really matters—delivering genuine value to the RIGHT customers. Despite the initial challenges, embracing a GTM strategy opens up exciting opportunities for innovation and efficiency, making it a must for any company looking to stay ahead. 

What are the benefits of prioritizing GTM?

The most significant advantage of a GTM-led approach is its laser-focused strategy, which enhances efficiency and drives higher profits. By adopting this laser-focused GTM approach, your team can concentrate on the sales and marketing efforts that truly drive revenue.

Here’s why GTM is the right way to go for SaaS growth:

• Clarity and Alignment: With a GTM-led strategy, you clearly define the purpose and audience for your product. Everyone works from the same playbook, creating a consistent image and message.
• Efficiency: It focuses on customer acquisition strategies that achieve ROI early and can fuel more growth, decreasing the demands on cash reserves. 
• Reduced Risk: It lessens the financial risk of a failed launch by ensuring that all aspects of the launch are well-planned and executed.
• Customer Experience: It focuses on delivering the best experience to customers, ensuring they are satisfied and more likely to stay loyal.
• Direction for Teams: A clear GTM plan provides direction for teams, ensuring everyone knows what needs to be done and how to do it.

Conclusion

With GTM, you’re not just predicting growth but testing it. This means trying out new ideas, strategies, tactics, and product decisions and using the combined brainpower of your whole team. The key is ensuring everyone is on board and working towards the same goals.

To make the switch to a GTM strategy much smoother, get to know your audience, learn from past mistakes, and tweak your approach. Embrace the change, roll with the challenges, and your business will be set up for long-term success.

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