GTM Diagnosis: A simple guide

A quick start to root cause analysis

Jun 20, 2024

👋 Hey, Toni from Growblocks here! Welcome to another Revenue Letter! Every week, I share cases, personal stories and frameworks for GTM leaders and RevOps.

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It’s been a busy week! Not only have I just gotten back from London for a RevOps meetup, but we’ve also just announced that Growblocks is partnering with Winning by Design.

Want to see what the fuss is about? Get a demo here.

On the topic of this new relationship, I wanted to write this week’s Revenue Letter about something that both of us care about… GTM diagnosis.

Imagine going to the dentist for a toothache.

The dentist looks at you, gives you a shot to dull the pain, and calls it a day.

Sure, you might feel better right now. But you should be livid.

That’s a sign of a bad dentist.

They’ve addressed your symptoms, but what’s actually causing the toothache is still there underneath.

And eventually, the painkiller will wear off - and the toothache might feel even worse.

This method of jumping into solutions is something too many GTM leaders do today.

They immediately try to fix symptoms instead of digging into the problem.

Usually, this comes from them having seen “this before” in another company and not appreciating how different those two Revenue Engines might be. The same solution might not work in both cases.

For example, let’s say you’re seeing a massive drop in CVR from meeting to closed/won.

Well the painkiller approach is to increase marketing spend and launch more campaigns. Because if we’re not converting as well, we might as well get more meetings booked.

But if you dig into your funnel, you might find that the actual problem is that your CVR is down because the inbounds you’re bringing in are not a good fit. The reason for that might be that your targeting or messaging is off.

Now admittedly, differentiating symptoms and problems can be messy. Here’s how you should look at it.

Symptoms are the observable effects or manifestations of underlying issues.

They’re the immediate signs that something is wrong, but they don’t reveal the root cause of the issue.

In SaaS, symptoms can include declining sales, increasing customer churn, poor product adoption, or low user engagement.

These symptoms are often the first indicators that prompt a deeper investigation.

Problems, on the other hand, are the root causes that lead to the symptoms.

They might include poor product-market fit, inadequate customer support, lack of essential features, or ineffective onboarding processes.

They are the deeper, often hidden issues that need to be identified and resolved to achieve long-term improvement.

Which symptoms should you focus on, and which you shouldn’t

Let’s be clear: not every symptom and problem matters right now. So, if you have hundreds of symptoms, instead of treating them all, start with the problems based on your company’s needs right now.

For early-stage startups, you’re establishing product-market fit and establishing traction. Basically finding out what works.

Here, you’ll care more about symptoms around your initial customer base, value proposition, and establishing feedback loops to improve the product.

Once you move into the scaleup space and know what works, your main concern should be doing it effectively and efficiently.

You’ll laser-focus on churn, operational bottlenecks, and whether your current GTM strategies are scaleable.

In the grown-up stage, you’ve established the GTM motions that work, and you’re well on the way to scale. At this point, you’re now worried if you’re winning the right customers.

Major symptoms at this stage include slowing sales growth and market saturation.

Beyond that stage, you’re now worried about how you can expand the market and increase profitability.

That said, when you start digging up symptoms and problems, you should ask yourself where you are right now. There will always be problems in your GTM, but not every problem should be a priority.

Baseline your Metrics

Before we start diving into any sort of GTM analysis, baselining your metrics is always the biggest hurdle for revenue leaders. Why?

Because we run with different CRMs and dashboards that don’t talk to each other, making any processing metrics a pain to calculate and update

Siloing data means that different systems and departments use different ways to source and calculate the same metric.

And your RevOps person is the only one with any sense of data ownership and governance in the org (if at all).

So before you start the diagnosis, I recommend the following for different maturities of companies:

Low maturity

Create metrics from scratch for the analysis. You might have never measured CVR from MQL to SQL, but this project might create that need.
Don’t get stuck in debating definitions for weeks and months. You need that for steering later on, but in the beginning you can get right “directionally,” which is good enough
Be aware, when you present the work to a wider group, eyebrows will be raised - and you will need to work through it. But it’s a lot more damaging to not do the analysis in the first place

High Maturity

You want to have every metric in the bow-tie documented and cataloged.
You will want every stakeholder to actually know each of those metrics and have them understand them across the bowtie and be intimately involved in driving them for their own teams.
You want those metrics to be relevant for all stakeholdes of the GTM. And this is not just Marketing, Sales, and CS but also CEO and CEO. Meaning include CAC:Payback, LTV over CAC etc.
You want to be clear how each metric is calculated. Meaning both Logic and source of the data.
And ideally, you will have data trust in place through having monitored those metrics for a while already.

If you are 5M ARR or below, I think it’s perfectly fine to try and do this in Spreadsheets. What we have learned is that you need a Revenue Engine Management solution once you hit 5-10M ARR.

Complexity of the GTM increases to a level that doesn't work with spreadsheets
Data keeps exploding as you buy more tools and get more sophisticated
C-Level and the Board are demanding clearer insights the connect through the full funnel

Starting a GTM Diagnostic

Ok, now that you’ve followed all of the previous steps, it’s time to start putting it all together and diagnose what’s actually going on in your GTM.

Step 1: Identify the core problem

Just like earlier in the post, you start by clearly defining the problem you’re experiencing (and not just its symptoms).

Let’s take our earlier example:

CVRs to closed/won are down
The problem is that the wrong customers are inbounding

In Growblocks: split the funnel between ICP vs Non-ICP

Step 2: Map causes and threats

In this step, we list all potential causes and threats that contribute to the problem.

Depending on where the problem is in the funnel, you’ll have to gain insights from your internal data, GTM team members, and even customer calls.

In our case, we know the problem is on the inbound side. So we start to ask questions:

Are we targeting the right prospects?
Is messaging aligned with their needs?
Are we doing proper inbound routing?

Step 3: Analyze Consequences

Essentially, what will happen if we don’t fix this? Ideally in the form of money.

If things keep going like they are now, how much are we going to lose at the end of the Q? What about the end of the year?

This helps you find the severity of the problem. The more you can tie it to revenue leakage, the better.

With Growblocks, you could look at the revenue at risk for this measure to get an immediate understanding. Or you could run a What-if analysis to determine a more specific and deeper connection.

Step 4: Develop Control Measures

AKA fix the damn problem.

This is where you and your GTM leaders brainstorm and mitigate the problems.

In Growblocks, you would now create a custom dashboard without the help of your data teams to track some of your early signals that might not be part of your Revenue model but part of your plan for mitigating the issue:

% if ICP signups in general
% of ICP signups from Demo Request
CVR of ICP from MQL to Opp
CVR of ICP from Opp to close / won

Step 5: Monitor and adjust

Now that you have a fix in place, you move into monitoring mode to see if it’s actually fixing the problem.

I find that you rarely have a silver bullet solution out of the gate. So prepare to adjust until you’re comfortable that you’ve solved the biggest leakages in your engine.

This custom dashboard now should surface and re-surfece in every team meeting you have on that topic. Ideally you see those dials moving towards the goal you set. But if they don’t, you might need to reboot this GTM diagnosis and find a better way.

This level of clarity and insight is lacking in many Revenue Teams despite wanting to be data-driven.

This methodology, spearheaded by WbD, and tooling from Growblocks can help you fix that.

P.S. I’m obviously biased, so you want to hear more about Growblocks, not from me; GTM Partners recently wrote an in-depth report about our platform.

You can read their whole report here.

Want to see the product in action? Book a demo with us here.

The Revenue Letter