The September 19th Telarus Tuesday call brought CompTIA Faculty Member, Kathryn Rose to talk about best practices for selecting a target vertical market, creating a profile for clients in that market, identifying key influencers in the market, and creating a positioning statement. The entire recording can be found here.
Benefits of Entering a Vertical Market
No matter what you think or what anyone’s told you, not everyone is your customer because your products and your services are not for everybody. The companies with the biggest success, in the beginning, have a niche business with a targeted audience. Providing a communication service or product may seem like a general enough blanket it could cover everyone. Realistically though companies that specialize in providing communication services to certain niche areas such as finance, energy, healthcare, and education are going to see their investments go farther and in a smaller amount of time. For example, a hospital would rather buy communication services from a company that has expertise in the common problems than to just trust a company that generalizes in telecom.
There are various vertical markets; a few of those vertical markets are retail, healthcare, legal, and education. These verticals can even break down into smaller subcategories such as hospitals, and insurance brokers. So what are the benefits of entering a vertical market?
As your sales teams become more educated and your marketing messages become more concise, your marketing costs go further. Instead of trying to be everything to everyone, you can target your sales and marketing efforts towards specific industry challenges and the solutions you provide. Once you immerse yourself in your chosen vertical market, you will become known as a trusted advisor and reliable service provider. Existing clients may begin to help you bring in new accounts; the more clients you bring in, the higher your revenues will become. By focusing on a specific vertical market, you open the door to faster and more profitable business growth. With a solid plan, you can become a dominant provider to your chosen vertical market. To make it easy, CompTIA has broken the process down into ten steps.
Step 1: Select a Target Vertical Market
Selecting your target vertical marker doesn’t have to be complicated. CompTIA has a few tips you can follow:
- Profile your existing customer base and look for patterns.
- Create a simple spreadsheet with columns for each sector, revenue numbers, appropriate solutions.
- Read and retain industry trends knowledge within your new vertical. CompTIA provides industry trends research you can tap into.
- Choose a viable market, one that is showing growth and opportunity.
To further help you get started here are six vertical markets and some information about the nuances of each and their predicted growth:
- Retail – The retail market is experiencing increased consumer knowledge of products and where to find them. Many retailers are shifting cashiers out from behind counters to the floor where they can provide better customer service. Therefore mobile POS systems like tablets are gaining popularity, and reliable wireless solutions can be critical.
- Healthcare – With baby boomers aging and a shortage in nurses, the healthcare market is in transition. Providers need wireless technology like tablets to allow nurses to be more productive and mobile when assisting patients. Also, secure storage systems are important to protect patients privacy. Communications can become critical and the difference between life and death.
- Banking – As one of the fastest growing markets out there, the financial institutions frequently require increased bandwidth and security in their technological infrastructure.
- Education – The education market is facing reduced funding, which means educators are looking for technological solutions to save money or grow enrollment. Things like online courses and wireless technologies are becoming very important.
- Government – Like the education market, the government market is primarily interested in cost-reducing solution but secure communications are critical.
- Manufacturing – The US manufacturing sector, in trying to compete with other regions, is primarily concerned with security systems to protect intellectual property from cyber-attacks.
When you’re thinking about getting into a new vertical, there are different considerations you may want to consider. The number one thing CompTIA always recommends when you’re looking to realign or more closely align your organization into one niche, is to think about how your organization operates. What is your value to that vertical? You then want to look at your organization as a whole and consider any specialized skills or expertise need to be successful in the vertical. Ask yourself if your current staff has that expertise or if you’ll have to hire more employees. If you do have to hire more employees, or simply have to get more training, you want to make sure you factor those costs into your revenue projections. Reviewing your customer base is very important; existing customers are typically the first source for determining that vertical market. Lastly, make sure that you are investigating the larger market opportunities within the vertical.
Once you have selected a vertical market to focus on, create a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). You will want to analyze the internal and external factors that can affect your organization’s ability to target that vertical. This will help you organize your team, your strategy, your target audience and set realistic predictions.
Step 2: Create a Client Profile
The second step to entering a new vertical is to profile your target customer. What do potential clients have in common? What are their pain points? How can you fix them? Take a look at your existing clients in the market and create an ideal client “persona.” Reach out to those customers who fit your ideal client profile and either formally or informally conduct a survey to find out about their specific pain points and challenges. This will become the basis of your sales, marketing, services training, and strategy. If you are just starting out, or decide that you don’t feel that any of your clients fit the vertical you’d like to target, do some online research. Industry publications will be a good source. If you attend live events, find a company that focuses on that niche in another non-competitive market to ask some questions, or go on LinkedIn and see if you are connected to people in that niche who can answer questions you might have. With a clear concept of your vertical market and potential clients in mind, you’ll be ready to determine what steps you need to take to focus on your chosen vertical.
Step 3: Estimate Localized Market Value
Once you have chosen a vertical market to focus your business in, and an ideal client profile of existing and potential customers you will need to determine the potential of your local market. Localized information will provide you with a basis for decision-making on whether this is truly an opportunity worth pursuing. Research doesn’t have to be expensive or overly time-consuming. Simple online searches and conference/event involvement that focus on your vertical can create a great pool of prospects and new customers. You’ll want to make sure you are networking with the main players in your vertical space, understand what got them ahead and most importantly stay connected. Every contact is a business opportunity, maybe not directly but through referrals or introductions.
Step 4: Commit to Vertical
Committing to a vertical goes beyond creating a business plan. You, your team, and your entire organization must be focused on becoming the dominant organization in your chosen vertical market. Explore the industry’s culture, learn about the different roles within a typical business, who the potential influencers are, and find out what it’s like to work in that environment. Most importantly, study the workflow or the processes and procedure used in generating revenue for the business. Understanding the workflow of your client’s business is crucial if you want to offer technology services that will make those workflows more efficient. Become an expert in ever-changing compliance and regulatory issues in the regions you serve. This will only make you sound more credible when trying to sell products that may be connected by your communication systems.
Step 5: Identify Key Industry Associations, Events, and Publications
In addition to immersing yourself in your chosen vertical markets’ day-to-day business, you’ll also need to immerse yourself in the industry as a whole.
Step 6: Develop Training Programs
To be successful in your vertical market, your team must stay current with that industry’s concerns. It is critical that your team from executive to intern, possess expertise within your chosen market. For example, if you claim expertise in healthcare yet you misspell HIPAA or fail to understand its importance to your solution your clients will interpret this as a lack of commitment to their industry. Get clear on the language of your market as well; each vertical has certain acronyms and phrases that you should familiarize yourself with to assimilate into the vertical. Make sure you are developing ongoing training programs for all of your employees to educate them in industry-specific jargon, trends, and challenges. Have your staff attend industry tradeshows and meetings to be seen and learn, and have them report back on their findings.Consider including your technical teams in some of the more critical training programs, even if the topics aren’t necessarily technical in nature.
Step 7: Identify Industry Influencers
Get to know the top consultants, lawyers, accountants and other service providers within your target vertical. One way to find them is to research who speaks regularly at industry events, another way is to read the industry publications and see who the experts that get interviewed, have popular blogs, or have a large social media following are. Once you develop a list of influencers follow and interact with their content regularly, develop a good relationship with them and then ask them for assistance. Your goal should be to build a mutually beneficial relationship.
Step 8: Get Your Market Plan Ready
As you learn more about your chosen vertical market and clarify your place in the industry, you’ll need to create a market plan.
- Develop your unique sales proposition (USP).
- Create a questionnaire for your sales team to use before pitching to a potential client.
- Identify the best way to reach your clients (text, email, phone).
- Establish project plans that spells out critical tasks, responsibilities, and deadlines. Distribute to the team, so everyone is in sync.
CompTIA offers members a free marketing toolkit, which includes templates for marketing plans, PR statements, agreements and so much more. You can access this is the resources and tools area of www.comptia.org.
Step 9: Identify Initial Sales Targets
Begin to develop a detailed database for your vertical market; including current and potential clients as well as industry leaders and influencers. Do not forget to include names of all potential decision makers and influencers. There are many list brokers out there that will have a lot of this information already done, consider buying a list of potential contacts. Use social media and your client’s websites to find out as much information as possible about each prospect. In addition to reaching out to prospective clients, make it easy for them to find you. Keep your website and your social media channels up to date.
Step 10: Explore Joint Venture
Just as you have identified potential clients, you must research and identify potential business partnerships. Look for other organizations in your vertical that are selling noncompetitive, but related products and services. As you immerse yourself in your vertical market, you will be able to find such connections through trade shows, associations, and on social media. The most successful joint ventures are based on mutually defined rules of engagement and often include a written list of actions both parties will take and ways to measure results. Defined goals and expectations are the keys to prevent misunderstandings or disagreements. The rules of engagement should also be results-oriented and can be used as a tool for regularly evaluating the success of the joint venture.
Moving to any vertical market means you will face established competitors and making your first sale can take longer, but once you do and establish a track record, sales will come more quickly. Follow the steps outlined below:
- Selecting your target vertical – Identify which vertical(s) you will focus on
- Creating a profile for clients within the verticals – take the time to profile your ideal clients within the niche.
- Estimate the market – whether you are local, national, or global, before you decide to enter a new vertical, you will want to estimate the financial return.
- Commit to the vertical – immerse your team into the chosen vertical as if you work in it yourself, identify the pain points and decide how you will solve them.
- Identify key industry associations, events, and publications – decide the best events for you and your team to attend and which publications may provide you with information on your vertical or publicity for your organization.
- Develop training programs – help get your staff up to speed on your chosen vertical.
- Identify industry influencers – who from outside your organization can help you get a foothold into your chosen niche?
- Get your market plan ready – develop your USP and work toward a comprehensive marketing plan with your messaging.
- Identify initial sales targets – get your sales team set up to have the initial sales conversations.
- Explore joint ventures – you don’t have to go it alone, there may be some complementary companies out there that you can tap into that will help you reach your goals.