If your organization is viewed as not having vertically connected experience and expertise it can be difficult to break through to C-level discussions and decisions. What is your strategy to change all that?
The Value of Verticals
Customers are looking for a trusted expert in their field — and they’re willing to pay extra for it. A recent McKinsey study of tech startups found that 38 percent of companies with a vertical-oriented value proposition had annual contract values (ACVs) of more than $100,000 per customer, whereas only 4 percent of companies with a horizontal focus reached that level of revenue per customer. And in a study of managed service providers, nearly three quarters of companies at the top of the ranking reported concentrating on clients in specific vertical industries.
Venturing into Vertical Marketing
More and more suppliers are finding success by specializing in one or more vertical markets. This focused approach helps direct product development and marketing efforts to target new clients, build reputation and increase account penetration. Marketing to a new vertical takes time, resources and dedication. But all the hard work and investment pay off as you go from being relatively unknown in a segment to the best-in-class solution.
Target a Niche
Adopting a vertical approach allows you to develop a “beachhead strategy” focused on winning a particular market first before moving into other, larger markets. A vertical approach is all about creating products intended for a specific industry demographic or market, or attempting to make your existing products appealing to those consumers in a specific way. This is in contrast with horizontal marketing, which attempts to appeal to as many different groups of people as possible.
Vertical Perspective and Expertise
It is important to have sufficient industry expertise at every level of the organization. This type of vertically connected perspective is usually found at the sales level and perhaps a few people within marketing who can write content to address unique industry challenges. That is a good start, but a vertical perspective must also be found in places like lead qualification teams, product development departments and customer support. If the whole idea of vertical marketing is to align to the niche, then it is often necessary for the organization to align its perspective as well.
Make a Plan
Vertical selling means tailoring your sales, product development and marketing efforts to a specific industry or sub-industry. This allows you to focus your efforts where they are likely to have the greatest impact. With better brand recognition, companies can use vertical marketing to establish their expertise in a particular field or industry, which in turn can boost the confidence of buyers looking for a new vendor.
How do you do it? Consider these five important steps to take.
1. Assess your current capabilities. Start first by identifying which vertical markets are right for your business. Focus your efforts on those vertical industries where you provide real value and where your products and services fit most effectively. Identify the best fit based on the value you bring to their business and capabilities that can make a difference to their organizational performance. Every industry has its own set of complexities, requirements, challenges and rewards. Which ones will be the most fruitful for you? Also, there may be geographic or economic reasons to favor one industry over another.
2. Be willing to invest. Establishing your organization as a trusted expert or resource in any particular vertical takes time, effort … and money; so you must be willing to invest. And perhaps more importantly, you must have a commitment to succeed. Take time to review your financials and talk with your employees to be sure you’re all in it together. If you don’t have a long-range strategic plan, a shared vision among your staff, and the necessary funding and commitment you’ll be much less likely to succeed as you drive into new markets. Make time to identify the what, why and how you are going to build for the future before moving forward.
3. Speak the language. One might sum up the idea of vertical marketing by saying that if you don’t speak their language, they won’t think you understand their business. Work to ensure that you truly understand the “ins and outs” of your targeted industry. From the pain points impacting growth to the jargon and buzz-terms used on the job and in the industry, you and your team must be able to converse with clients using their language. This is crucial to becoming a trusted advisor to your customers and, ultimately, winning their repeat business.
4. Identify your personas. Once you have a good understanding of the particular vertical you are targeting, take the next step by identifying specific buying personas in that niche and understand how they interact. Who are the decision-makers and influencers? What are their demographics and behaviors? How are they different from the personas in other segments? The ideal personas in certain industries may be different in other market segments. You may find the most success talking with sales or IT leaders in one niche, whereas in another you’ll find better traction with marketing leaders, or compliance officers or purchasing directors. And don’t forget about all the other folks who play a role in the purchase process, such as influencers or gatekeepers, who can often make or break your success.
5. Develop a content strategy. Once you’ve become familiar with your target vertical and you’ve identified specific buying personas, it is important to develop a content marketing strategy that supports your effort in ways that will resonate. It is important to be able to clearly and quickly articulate exactly what it is that you do, why it is important, what the results are, and what steps potential customers should take. Your efforts in vertical marketing will fall short without this clarity and ability. Communicate “your story” with a multichannel approach using social media, print advertising, video, trade media and so forth. The difference is that your message will be stronger and more credible as a result of your efforts to design an effective vertical marketing approach.
This article originally appeared in the March 2018 issue of Workflow.