The opportunities today for resellers, channel partners and service providers in the Information Management space are found across all industry segments. No matter which business category or market vertical you focus on, you can bet that the fundamental activities of those organizations are reliant on information and technology to get the job done. And every company, regardless of size or type, must support common functions –like human resources or accounts payable – that are both content-driven and info-intense, making the need for methodologies and solutions to better manage information a common one for every organization.
But VARs and vendors 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 capabilities and opportunities in the information management space can be applied to all kinds of customers and companies, the fact is that decision-makers put more trust and investment behind suppliers that demonstrate expertise and understanding related to what they do. As a result, if your organization is viewed as not having this vertically- connected specialization it can be difficult to break through to executive decision-makers.
The Power of Specialization
More and more suppliers are finding success by specializing in one or two vertical markets. Customers are looking for a trusted expert in their field—and they’re willing to pay extra for it. The Technology Services Industry Association conducted research in order to understand whether companies with a vertical marketing approach grow faster than those who remain horizontal. The results were impressive; 67% of service providers with a vertical approach experienced year-over-year growth of 21% or greater. Conversely, 72% of providers with a horizontal marketing approach experienced either flat or declining sales growth.
The Value of Being Vertical
A vertically-focused approach helps direct product development and marketing efforts to target new clients, build reputation, and increase account penetration. As you are developing your next strategy, consider these benefits of being vertical.
More effective messaging. When you specialize in a specific vertical you develop a real-world message about the value provided within the nuances of the industry and/or the process. This can make the difference between being regarded as an “also-ran” vs. an “essential contender” in the eyes of executives and decision-makers. This also results in reality-based sales versus unrealistic expectations come quote time.
Better brand recognition. Becoming a trusted advisor in a specific vertical builds better brand recognition and increases the likelihood that you will be included in the customer evaluations. Focusing your marketing efforts on a select number of industries and demonstrating industry knowledge and understanding captures market attention and boosts the confidence customers and prospects have in your organization.
Better use of resources. Vertical marketing can make your sales team more efficient and effective. Rather than running down every lead and spending time on deals that have a low likelihood of success, your professionals engage in a higher value, higher-odds sales process. And it’s more likely that customers will return for more. Since it costs 6-7 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 marketing approach.
Developing new services. A specialized focus also provides the vision necessary to create new products and services that really drive results. Having a deep understanding of an industry provides the foundation to identify unmet needs and solve challenges that market participants may not realize they have. It helps make your existing products appealing to those consumers in a specific way.
Step Up Your Success
Vertical selling means tailoring your sales, product development and marketing efforts to a specific industry or sub-industry. How do you do it? Consider these five important steps.
Step 1 — Understand the Buyer’s Business.
A true strategic partner understands their customer’s business nearly as well as the customer does. To build this understanding requires both effort and commitment. One place to start might be a review of the regulations and compliance needs in that particular 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.
Step 2 —Speak the Language.
In any business, and within any work process, there is a “language” associated with the effort. Just as technologists have jargon like “IoT” or “Blockchain,” customers and process owners will have a language of their own. Financial analysts might be concerned with “float.” Healthcare clinicians may focus on “patient outcomes.” In shipping and logistics it could be all about “landed cost.” Whatever the case, speak the language by understanding these types of terms and concepts, and translate the value of your solutions and services in dialect your customer will understand.
Step 3 — Don’t Assume.
With all the tremendous technological capabilities and features available today, it’s easy to get excited about all the possibilities. But it can be a big mistake to assume you know what customers need. Instead, let them tell you. Process owners and front-line workers know only too well exactly where the gaps in process performance lie, and often what is needed to overcome those gaps. Asking the right questions — and listening — will either confirm your initial impression (great) or uncover new opportunities that you had not considered or understood before.
Step 4 — Focus on the Success of the Customer.
It can be tempting to focus on making the sale and not your customer. Can you authentically say that you put your customer first? Work to understand what motivates your buyer. Be clear about what their boss and their boss’ boss want. How can you make your customer a hero? By focusing on the success of your customer you increase and maximize the value of vertical marketing in your own success.
Step 5 — 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. 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 generalized business media and a generalized business discussion about what you do, consider reworking your value proposition and marketing message to one that is more specific to your chosen verticals.