by Kevin Craine for Workflow
The opportunities today for developers, suppliers and service providers in the document management and enterprise content management (ECM) space are found across the board. No matter what category of business or which industry segment you focus on, you can bet that the fundamental activities of those organizations are reliant on documents, content and technology to get the job done.
Every organization, regardless of size or type, must support common functions – like human resources or accounts payable – that are both document-driven and info-intense, making the need for methodologies and solutions to better manage content a shared one across all industry verticals. But VARs and resellers are recognizing that it can be difficult to succeed if you are perceived as a “jack of all trades.” While it’s true that many of the challenges and opportunities in ECM are common across market segments, customers tend to put more trust and investment behind suppliers and partners with a demonstrated history of success within their industry. Customers are looking for a trusted expert in their field, and if your organization is viewed as not having this vertically connected experience and expertise it can be difficult to break through to C-level discussions and decisions.
Master the Market
As a result, more and more suppliers are finding success by specializing in one or more vertical markets. This focused approach helps direct development and marketing efforts to target new clients, build reputation, and increase account penetration. For developers, a strategy based on vertical markets helps organize product and service development. Resellers benefit from a more pointed marketing and sales strategy based on the industry and its specialized needs versus by product, technology or capabilities alone.
Focus your Efforts
Where can you begin? Start first by identifying which vertical markets make the most sense. Focus your efforts on those vertical industries where you provide real value and where your products and services fit most effectively. It’s not difficult to identify the numerous vertical markets in ECM: healthcare, insurance, financial services and manufacturing all come to mind, and there are others. The question is, which ones will be the most fruitful for you? Identify the best fit based on the value you bring to their business and capabilities that can make a difference to their organizational performance.
Once you identify your target verticals the next step is to develop and promote a specialized understanding and expertise in that market segment. This expertise must go beyond simply knowing about the technologies and products to include a deeper outlook on the specific opportunities and prevailing constraints that influence the way your clients do business. It is from this foundation that providers build trust with potential customers and find the most success in designing and offering solutions that make a real difference.
Understand the Industry
At the heart of a successful vertical alignment strategy is understanding; you need to not just know the products, you need to know the industry, the terminology and the practices. That may require some research. One place to start might be a review of the regulations and compliance needs in that industry. Also assess the company’s performance on Wall Street. Try a review of related news stories or events. Work to gain real business insight, not just lip service. And always be sure to work to understand the fundamental goals and objectives of the clients that you’re targeting and let that be your compass to point the way for your efforts.
Rinse and Repeat
Becoming a trusted advisor to your client pays more than with just the original sale because it is much more likely that your customer will reach out to you again and again as their business needs change. And since it costs six to seven times more to sell to a new customer than it does to sell again to an existing customer, it just makes good business sense to use a vertical-alignment approach to extend that relationship. Winning new deals is always important, but successful organizations recognize the need to go beyond the sale and penetrate each account more thoroughly.
Developing vertical industry expertise and promoting a profile as a knowledge leader bears fruit in terms of referrals as well. Let’s face it, customers talk – within the same vertical and with other people they know – and the old adage that word-of-mouth advertising is the best kind still holds true today. There is no more powerful benefit to your vertical marketing efforts than your extended profile as a trusted industry resource.
Develop a Profile of Success
Now that you’ve refined your vertical focus and developed an understanding and expertise in the specific industry, the next step is to make all of those efforts really work for you. One example of how to do that would be a software developer that creates multiple versions of their application to cater to different industries. The software may indeed utilize the same capabilities and techniques under the hood regardless of the industry, but the verticalized product is targeted and tailored for that particular market segment. And the terminology used to describe that product is adjusted to more pointedly address those specific users.
Getting the word out about your industry focus and expertise may require some changes in the way that you promote your business. For example, rather than focus on participating in events pertaining to the ECM industry in general, many VARs and providers find better success by being active in industry trade shows and professional organizations that are related to a given vertical, such as healthcare or education, instead. The idea is to establish a market presence within your chosen markets to inform potential clients of your offerings and, over time, establish a profile within that market vertical.
The Challenge of Change
There are some challenges to success in the vertical marketplace, however. One important one to consider is the fact that change is a constant factor for every segment of business today. Broad-based disruptors like digital transformation, cloud computing and globalization are all making a continuous impact, even to local businesses. No market vertical is static; technologies are advancing, requirements are evolving, and VARs specializing in any vertical need to be on top of what’s going on with new practices and techniques. Understanding the factors at play within the industry gives you insights that you can bring back to your clients to help them in ways that make a real difference.
Being profitable in vertical markets is an ongoing challenge, but it can be a lucrative place to find business. Vertical alignment brings more channel opportunity because the solutions developed are more repeatable and the professional services skills are honed to the point that the inherent risk is greatly reduced. But best of all, the likelihood of making the sale is increased. Customers feel more confident and more likely to buy because of the assured feeling that they are not the first company to deploy a one-off solution from the VAR/solution provider. But making a vertical alignment strategy really work requires an understanding of not just technology, but also of the role that the approach can play in affecting real world process improvements specific to the target industry.
This article originally appeared in the March 2017 issue of Workflow.