Strategy & Planning

How to use Ansoff’s Growth Matrix to guide your SaaS go-to-market strategy

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This is exercise 1 (of 7) in our go-to-market workshop deep-dive series. For more go-to-market workshop guides and frameworks like these, subscribe to the T2D3 Insights newsletter.

Overview: What is the Growth Matrix exercise?

This exercise forms the basis for your entire go-to-market strategy. The growth matrix exercise helps your team align on and prioritize your company’s most important initiatives, then gives you a framework to decide how to pursue each one.

The final result tells you which of the four key growth strategies you should pursue over the next 6–12 months—and how much effort you should put into each one.

What’s the intended outcome?

The growth matrix tells you what to build your OKRs around, provides a baseline for creating funnel projections, shows you where to focus your team’s time, and helps you create guardrails for saying ‘yes’ (and ‘no’) to new initiatives that support your company's ultimate goals.

After running this exercise (and applying some strategic thinking to the results), you should be able to say something like this:

“Our go-to-market strategy consists of two main efforts:
1) entering new markets with our current product and 2) taking more market share with our current products.

20% of our effort will be dedicated to entering new markets through [Growth lever 2], [Growth lever 2], and [Growth lever 3]"

The other 80% of our effort will be dedicated to taking more market share through [Growth lever 4], [Growth lever 5], and [Growth lever 6]."

Pitfalls of skipping the growth matrix

Convincing a large group of your highest-impact leaders to spend a few hours in a room together for an exercise can be difficult. But—speaking from experience—it’s well worth the effort.

Skipping over this exercise runs the risk of your leadership team prioritizing conflicting efforts because they have their own interpretation of where the company’s growth should come from—and the role their department should play in getting there. If you don’t have a clear big picture, you have an environment of unfocused work with your team doing random acts of marketing to hit short-term growth goals and forgetting the bigger picture.

A thoroughly completed growth matrix gives your team a north star to compare every effort against. For each new project or initiative, you can ask: “Does this fit into our overall growth plan?” If the answer is “no,” it's ok to deprioritize it.

When does the Growth Matrix exercise work best?

Chart - which growth stage should you try ansoffs growth matrix exercise atWithin the T2D3 growth stage framework, the Growth Matrix is most helpful once you've found some degree of product-market fit.

If customers aren’t paying to use your product yet (i.e., you're still in the MVP growth stage), it’s harder to get meaningful results from the Growth Matrix exercise. In the MVP stage, most of your results will land in the “product development” quadrant (bottom right). This only reinforces the goal we know you should be focused on at the MVP stage: building features that help you find your first paying customers. Of course, this isn't always the case—but a word of caution for very early-stage companies considering using this exercise.

How to facilitate the exercise

Step 1: Explain the exercise

Start by explaining the philosophy of the matrix to the workshop attendees. We often use the example of a winemaker to explain the premise of the Growth Matrix. Here's a snippet you can modify to get started

Imagine your company makes wine. You need to grow revenue by $1,000,000 dollars in the next 12 months. To do this, you could pursue four different strategies. Each strategy fits into a different quadrant on the matrix:

  1. Sell more of your existing wine to your current target market (Take more market share)
  2. Sell your existing wine to new target markets (Enter new markets)
  3. Develop new wine products to sell your current customer base (Bring new offerings to existing customers)
  4. Develop new products to sell to new target markets (Enter new markets)
Within each strategy, there are different growth levers (tactics) you can pull. For example: In the “Take more market share” list item (bullet #1), you could do one (or all) of the following:

  1. Run newsletter campaigns to your existing customer database
  2. Ask your happiest customers to refer you new business (incentivized with a discount)
  3. Run a lookalike Facebook ad campaign to people like those on your existing wine member list
  4. Create automations on the website to upsell big-spending customers
If you pretend our company is the winemaker, our time together aims to uncover all of the potential ways we can sell more of our wine (software). Once we have all of our ideas out on the table, we’ll decide which have the biggest impact potential and come up with clear priorities for our team to work on in the coming year.

It helps to show a visual of the matrix while you explain the winemaker example above. I find this helps workshop attendees connect the examples with each quadrant.

Ansoff Matrix - A framework for building your b2b saas go-to-market strategy

 

Step 2: Run the exercise

  1. Launch a Miro board (or equivalent whiteboarding tool) with four quadrants and X and Y labels from the diagram in the section above. If you’re facilitating the exercise in person, draw a 2x2 grid on a whiteboard or paper easel and grab some colorful sticky notes.

    Below is the Miro template we built for this exercise. To get this template, sign-up for early access to the Kalungi App. 

    Screenshot of Kalungis Ansoffs growth matrix exercise Miro template-min

  2. Before starting, define your company’s growth target with the group. Usually, the CEO can provide this number. This will frame the conversation and get your participants to think about how each tactic will tie back to revenue. Your growth target should have a dollar and time value. For example, it could be: “+$1 Million Annual Recurring Revenue in 12 months.” Write this number in the center of your matrix and circle it. Explain to your group that the rest of the exercise should be completed with this growth target in mind. 

  3. Give participants 5 minutes to create a small collection of 3–5 sticky notes. Each sticky note should include the following participant prompts
    1. Describe the growth lever
    2. Estimate the number of new customers this tactic will generate in the period you defined in your growth target
    3. Estimate the annual contract value (ACV) for each new customer
    4. Estimate the relative difficulty of implementing this growth lever within the company

      Here are some examples of what your participant’s stickies might look like. Note: it’s ok if not all stickies have values for “New customers” or “ACV.” Some tactics are hard to tie directly to revenue. These will be discussed with the group later. Your goal right now is to collect ideas.Ansoffs Growth Matrix sticky note examples for a go-to-market workshop


  4. Ask everyone to place their sticky notes in the best-suited quadrant of the Ansoff Matrix.
    Go through the notes together. Pick out a few strong standouts. Ask the creators to explain the tactic and the rationale behind it.

  5. Adjust sticky placement within the proper quadrants, if necessary—but don’t worry about perfection. You’ll be able to reorganize these and add additional details after the workshop.

  6. Ask each member to present 2–3 of their stickies to the group. As the facilitator, I recommend taking additional notes when each sticky is presented. Participants often write shorthand or abbreviate their ideas on the sticky note—but there's usually more complexity to the idea when it's described out loud. Some questions you can ask to facilitate this discussion:
    • Why did you choose to contribute this growth lever?
    • Can you explain the logic behind the opportunity size/new customer/ACV/effort value you wrote

  7. During step 6, it’s ok to challenge group members on the placement of stickies. Showing them the proper quadrant for their sticky is a good conversation starter and sometimes uncovers hidden meaning/intent in the sticky when the creator explains it.

  8. If you end up with multiple overlapping stickies, collect them into thematic groups on the whiteboard with other similar stickies.

  9. Collect feedback from the group on which growth levers they think are best to invest in by facilitating a vote. Have each member vote on the top 3–5 initiatives they believe will be most impactful across the 4 quadrants. You can use Miro's voting mechanic or, if you're in-person, have members place colored dots on the stickies they like best.

  10. Discuss the results with the group. You should be able to create a rough stack rank of the initiatives after this discussion.

Here are two examples of what your growth matrix board might look like after you run Step 2. Note: these screenshots were from growth matrix exercises run in Stormboard

Ansoff Growth Matrix - completed example in a go to market workshop (1)

Ansoff Growth Matrix - completed example in a go to market workshop (2)

50+ levers to include in your Ansoff growth matrix

If you need examples to generate ideas for your workshop members, share this list of growth lever examples with them.

READ ARTICLE

 

Step 3: Explore and interpret the results

After the exercise (and with some space to breathe & go deep), compile the results of your Growth Matrix in a growth priority spreadsheet like the one pictured below. 

This step lets you add detail and nuance to each lever that many of the workshop stickies won't have—since most workshop participants use short-hand to fit their ideas onto a single card. 

Here, you can parse out details from each sticky into different columns and use sorting mechanisms to look for patterns. For example, you might look first for growth levers with a low-cost rating and high potential for recurring revenue opportunities.

It’s important to note that not all of your growth levers will contribute to recurring revenue growth. Some might be one-time revenue generators that you may decide to ignore for now because it doesn’t support a growth target that focuses on recurring revenue.

Kalungi - B2B SaaS growth priority spreadsheet example - T2D3

Step 4 - Present your findings and get buy-in

Use your growth priority spreadsheet to select the growth levers you want to pursue based on their estimated ARR impact, priority from the group, and feasibility in the short to medium term.

Group the most impactful levers into overarching themes and present the collection to your leadership team. This exercise isn't complete until your department leaders arrive at a collective agreement that they will use this mix of growth priorities to inform their goals and decisions over the coming year.

Once you've received confirmation on the plan, formalize the growth priorities on a single slide in your go-to-market summary deck. I find the format below helpful for summarizing the key pillars without too much painstaking detail. This slide should strike a balance between strategic storytelling and tactical specificity so it can be useful for everyone from your board to your team.

Below is an example of what your output slide could look like from this exercise.

Complete example of Ansoffs growth matrix in a B2B SaaS go-to-market strategy - Kalungi (1)

What's next?

Now that you've set your company's growth priorities, you can start building your objectives and key results around them. By using the output of your Ansoff Matrix as the foundation for your OKRs , you're nearly guaranteeing that your team is creating key results that support your growth principles and moving in the same direction.

OKRs: how to drive transparency, accountability, and results

An in-depth guide on what OKRs are, why they’re important for B2B SaaS marketing teams, and how to create them.

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B2B SaaS Marketing OKRs (with template)

B2B SaaS marketing OKR examples and a template to help you balance driving demand, sustainable growth, and good ROI.

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